There are a lot of things that happen in life that require money that some may not have. Whether it’s something short-term like a higher than normal energy bill or something costlier like the need to purchase a new car, knowing where to go to get the cash you need is important. Though there are a lot of loans out there, each of them serves a different purpose. Below, are some of the most commonly used loans and circumstances in which they might come in handy.
- Pay an Unexpected Bill (Short-term)
Though some bills like a streaming service membership cost the same amount each month, others like the electric or water bill will fluctuate depending on your use. One month of over usage and the bill could come in unexpectedly high. If you just need a few hundred dollars to cover the bill until you get paid, then a payday loan may be an option for you. Ideal for those with bad credit or no credit, payday loans can be applied for online and deposited into your account within 24-48 hours.
Payday loans are high-risk loans that come with high interest rates and other associated fees. If you’ll need longer than a pay cycle to repay the loan in full it is best to look for another option with more flexibility.
- Cover Emergencies
You never know when an emergency could arise that could require more money than you have to spare. A leaky pipe in the house, for instance, could require the services of a plumber costing hundreds of dollars. A car repair estimate for transmission work could be thousands of dollars. When you have emergencies such as these that cost hundreds or thousands of dollars, you’ll need more time to repay the loan. Installment loans are payday loan alternatives that work for situations like these. They too can be applied for online and can be beneficial for those with bad or no credit.
Unlike payday loans, installment loans provide more flexible repayment terms that can fit your budget. Instead of having to pay high-interest rates and extension fees, you’ll be able to break your loan up into smaller monthly payments. Every payment you make goes towards the principal balance allowing you to pay the loan off faster.
- Start a Business
The internet and modern technology have made it easy for everyone to start a business. Though starting a business is easier than in times past, one thing remains constant – the need to have cash. Raising capital for a business startup can prove difficult when you’re just starting out. Small business loans are designed to provide startups and established businesses with the cash they need to operate. Like a personal loan, you will be required to submit financial statements and a review of your credit history will be done. Business loans will vary in amounts, loan terms, and interest rates, but can often be paid back over the course of a few years.
- Personal Interests and Growth
Everyone has personal goals and interests that they’d like to pursue. Unfortunately, not everyone has the funds necessary to pursue them. Personal loans can provide an avenue for you to complete things like planning a wedding, paying down debt, taking a vacation, starting a home improvement project, and whatever else you might want to do with extra money. Offered by traditional banks and private lenders, most personal loans require you to have good credit as well as collateral. These loans can be paid back over the course of a few years to fit in your budget.
So, whether you want to fund that vacation you’ve been dying to go on or you need an installment loan to cover the car repair, there are financial products out there you can take advantage of. As you’re reviewing various loan options, be sure to review their purpose, the interest rates, terms of the loan, and associated fees to ensure that it’s the best type of loan for your current circumstances and budget.