4 Common Types of Personal Loans

CashThere are different types of loans, and personal loans are one of them. It is a kind of loan where you can pull out some cash for you to use during an emergency, planning a wedding, going on a vacation or for your home renovation, among others.

Such cash loans are highly accessible in Salt Lake City and come in different types. These can all be applied for and given by appropriate banks and lending institutions. Knowing the different types of personal loan can help you choose which type is the best for you.

Types of personal loans

  1. Secured loan

This kind of loan is called as such because a “security” is offered to the lender. This can be in the form of a car or property that serves as your collateral. Failure to pay the amount you borrowed and its interest means your lender can claim your assets.

  1. Unsecured loan

The opposite of secured loans as there is nothing that serves as collateral to the lender. Due to your high credit ratings, your signature is enough security. However, this means higher interest rates and stricter approval processes.

  1. Line of credit

One of the best loan types to use during emergencies. A line of credit loans allows you to overdraw your credit to an amount fixed by the bank and you only pay the interest on the amount that you used.

  1. Payday loan

Known as cash advances, payday loans are one of the most expensive, but common loan types. This uses your next paycheck as a security topped with high-interest rates plus fees. This short term loan is best used for extreme emergencies.

Not satisfied with the types of loans presented? There are tons of other loan types you can choose from. Talk with your lender and see which loan type fits you and your financial capability.