Understanding Your Loan Options

Posted on: 14 December 2015

If you need some money, then you have a lot of different options out there, as far as loans go. However, this can make it pretty difficult to determine which option is best for you. To help you out, here is an overview of some of the most popular loan types and the situations in which they are effective:

Installment Loans

Installment loans are usually very easy to access and even easier to pay back. The main reason for this is that installment loans don't need to be paid back in a single lump, like other options. Instead, you pay back an installment loan over a set period, usually in the months or years range. This can greatly reduce the financial burden that the loan places on you and allows you to spread out your payments in a way that fits in your budget and lifestyle. For more information on this option, contact a company like Las Vegas Finance.

Signature Loans

Going by the name alone, you might guess that a signature loan requires nothing more than your signature. In a sense, this is true. Signature loans don't require any collateral beyond your signature, but they certainly do require a great deal of information on your behalf. The lender will look into evidence of identity, residency, possibly employment, and credit score in order to determine whether you are a suitable candidate for a signature loan. Since they have no collateral as leverage in the event that you fail to pay the loan back, there is relatively high risk to the lender. This can lead to higher-than-average interest rates, but if you don't have any collateral available, then a signature loan can be a very appealing option.

Payday Loans

Payday loans tend to have high interest, but they are also one of the fastest ways of getting a loan if you have a poor credit rating or can't wait for a lengthy verification process. A payday loan is usually for relatively small amounts compared to other loans such as mortgages, but this can work in your favor. As long as you only use payday loans for a few hundred dollars, then the interest won't be quite so prohibitive. One of the unique elements of payday loans is that they usually involve writing a check to the lender when you get your money. This check is to be cashed on your next payday, which ensures that you don't forget to pay your loan back.