A Simple Guide on the Most Common Types of
Loans
Did you know most Americans are currently in debt?
Almost 81% of baby boomers, 80% of Gen Xers, and 82% of millennials owe money in some
way. With so many people in debt, it's no wonder more people are looking into loans.
Curious about the different types of loans available to you? By exploring the different kinds
of loans available, you can make a plan for yourself moving forward.
Get started with this guide.
1. Payday Loans
About 60% of Americans have less than $1,000 saved in the bank. As a result, many people
have to turn toward different types of loans to pay their expenses.
One of the popular short-term loan types is a payday loan. Since they're short-term, payday
loans are high-interest. They're ideal for people who are living paycheck to paycheck.
You can learn more about payday loans from Captain Cash.
2. Personal Loans
As you explore the different types of loans available, consider why you need a loan. For
example, you can use personal loans to pay off any personal expenses. These loans are ideal
if you have outstanding debts.
For example, you can use a personal loan to pay off your credit card depth. Then, you can
reduce your interest rate by transferring balances.
However, it's important to note that these loans depend on your credit history. You're more
likely to receive a substantial loan if your credit score is higher.
3. Auto Loans
Auto loans are connected to your property. While an auto loan is ideal if you want to buy a
car, you could risk losing that car if you're late on payments.
Auto loans are often distributed by car dealerships or banks. Usually, loans directly from the
auto dealership are more convenient. However, these loans are usually more costly,
especially if the interest rate is higher.
Make sure to explore the different types of loans available before you choose one. Compare
their interest rates as well to determine which is best in the long-term.
4. Mortgages
Like auto loans, mortgages are tied to what you own. With mortgages, you risk foreclosure if
you miss payments. However, mortgages are very popular because they help people buy
homes they otherwise can't immediately afford.
Of all the different kinds of loans we're reviewing, mortgages usually have the lowest interest
rate.
5. Debt Consolidation Loans
If you need to simplify your finances, consider looking into a consolidation loan.
Debt consolidation loans can help you pay off several outstanding debts. For example, you
might use this type of loan if you have credit card and student debts. By choosing this loan,
you can reduce your monthly payments.
Student loans are another common type of loan that can help students afford to cost of higher
education. These loans are available as private or federal student loans. These loans are
usually converted into personal loans or second mortgages.
Need Money Now?: 5 Types of Loans to Consider
Need money fast? Start reviewing these different types of loans today. Make sure to consider
your long-term financial goals first.
Searching for more helpful resources? Keep tabs on our blog.