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Thursday October 1, 2020

updated - October 1, 2020 Thursday EDT

Getting Approved: What Are the Different Types of Loan?

Feb 03, 2020 01:54 PM EST | By Ernest Hamilton
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Getting Approved: What Are the Different Types of Loan?
(Photo : Getting Approved: What Are the Different Types of Loan?)

The average American has right around $9,000 in their bank account at any given moment. And while that might seem like a lot of money, it's not that much in the grand scheme of things.

It's often not enough to cover the cost of expensive medical bills. It's also not enough to cover the cost of a new car. And it's definitely not enough to purchase a home.

To cover these kinds of costs, Americans usually have to take out loans. There are different types of loans that people can apply for to pay for the things they need in their lives.

Let's take a look at a few types of loans to see if they might be a good fit for you.

Personal Loans

Personal loans have turned into some of the most popular types of loans in recent years. More than 30% of people take one out every year.

It's pretty easy to see why. As long as you have decent credit, you shouldn't have too much trouble securing a personal loan from a bank or an online lender. And you can use a personal loan for almost anything.

Some people choose to use personal loans to consolidate credit card debt. Others do it to catch up on overdue bills.

Whatever the case, this is one of the first types of loans you should turn to when you're in need of money fast.

Title Loans

Do you own a car outright? If so, you may want to think about going with a title loan as opposed to a personal loan the next time you need cash.

A title loan allows you to use the title for your car to get access to the money you're looking for. You can apply for one in a matter of minutes online and get approved for it in no time.

You will have to hand over the title for your car to your lender to obtain the money you're searching for. But once you've paid your loan off, you'll get it back again.

A title loan is a great way to use your car to your advantage when you're in a bind.

Payday Loans

If you only need to borrow a few bucks until the next time you get paid, a payday loan might not be a bad option for you.

You don't want to get into the habit of taking payday loans out too often since they come with high-interest rates that make it hard to pay some of them off. But if you're in a real pinch and don't know where else to go for money, a payday loan could be the answer to your prayers.

Which of These Types of Loans Would Be a Good Fit for You?

Each of these types of loans has its own pros and cons. It's your job to look at each of them and carefully consider which would be the best fit for you.

You can then apply for the loan of your choice and get the money you need immediately. Just make sure you have a plan in place for paying your loan back in a timely fashion.

Learn more about specific types of loans by poking around on our blog.

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