Have you been thinking about getting a loan to finance your next big purchase, but don’t know where to go? Although loans are similar in that they all involve borrowing money from someone and having to pay it back, they can differ drastically in terms of the amount of money available, the interest rate charged, the length of repayment and much more. If you’re looking for an all-encompassing loan guide, we’ve got you covered right here with this comprehensive guide to the different types of loans you can get in the United States! The Different Types of Loans You Can Get in the United States
Personal Loan
A personal loan is a type of loan where you borrow money from a bank, or other lender to use for any personal reason. Personal loans are usually unsecured meaning that you don’t need to provide collateral to get one. The Different Types of Loans You Can Get in the United States
Mortgage
A mortgage is a loan that you use to buy a house. It is usually taken out over 20-30 years, and you make monthly payments until it’s paid off. The interest rates are typically lower than other loans because this type of loan is secured by your home and backed by the U.S. government through Fannie Mae or Freddie Mac.
Auto Loan
An auto loan is a type of secured loan that you can use to buy or lease a car. Secured loans are backed by collateral and often lower your interest rate. When you apply for an auto loan, the lender will look at your credit history, current income and your down payment before approving or denying your application.
Credit Cards
A credit card is a loan that you can use to purchase goods or services. When you make a purchase using your credit card, you are spending money that you don’t have. That’s where the interest rate comes into play because it allows the credit card company to earn interest on your balance.
Unsecured Loan
An unsecured loan is a type of personal loan that doesn’t require collateral. Unsecured loans are often used by consumers to consolidate debts, make home improvement purchases, or pay for unexpected expenses. A credit score typically isn’t necessary to qualify for an unsecured loan, but lenders will want to review your income and past credit history before approving your application.