These days, there are many options for securing personal loans for a car, your home or education, but the process can sometimes be overwhelming. Because of the credit crunch, many people assume that they're not eligible for loans, but most money lenders are willing to work with you to find a solution.
The first step in securing a home loan, personal loan or auto loan is to understand your credit history. A good credit history, meaning you've paid back your previous borrowings on time, increases your chances of being approved dramatically. Bad credit history, meaning you defaulted on payments or were late making your payments, can hamper your ability to get a loan because it shows that you were not reliably able to pay back the money you borrowed. Another circumstance is lack of credit, or no credit history altogether. This means that you have no history of borrowing money and paying it back regularly, and while it's not bad that you've never borrowed money before, lenders won't be able to gauge the likelihood that you'll pay back the loan you take out if they don't have a record of your borrowing history. If you do not know your credit history, get a credit report online at one of the many credit report services. For a small fee, you can find out where you stand.
There are private and federal student loans available for those wishing to invest in their education, and getting them can be easier than getting home loans or auto loans. An eligible student studying full or part time at an accepted institution can secure a loan for the cost of tuition and living expenses through federal Stafford loan programs that include good interest rates and flexibility in terms of repayment. To qualify, you must typically show financial need, you must be enrolled at least half-time at your learning institution, and you must not be in default on any other education loans or grants. Often, if you are default on other loans, you can still receive a student loan if you've made arrangements to repay the amount owing.
Pay day loans are short-term, usually small amount cash loans ($50 to $500) that typically carry high interest rates, but are ideal for those who need quick cash for emergencies and do not have credit cards or have maxed out their cards. There is no credit check, you can apply online, by phone or in person, and the entire process can be carried out in about 20 minutes. But, pay day cash loans do come with their downsides.
While you can cover your unforeseen expenses quickly, the high interest rates mean that you will end up paying back far more than you borrowed, and the repayment period is usually very short. If you cannot pay back the amount within the agreed period, you can "rollover" your payment, but you will end up paying in interest almost the amount you borrowed. High interest rates are often what keep people from using pay day loan services.