All about Personal Loan, its type and uses

Money is never enough! Juggling expenses can be stressful once they exceed your income, and when so, personal loans are lifesavers. When you need to finance your dream or a well-earned vacation, getting a personal loan is a good idea. It is an even better idea when the need is more demanding, like a medical bill.

Most personal loans are small four to five-figure amounts. They are relatively easy to access and cheap to service. Personal loans come in handy when you need to meet a financial obligation, and you do not have enough money. 

Apply for a personal loan when you feel the need is worthwhile. Discussed below are four different types of personal loans that you can get. Find out which one best suits your needs.

Cash loan

Cash loans seem outdated, considering a world trend towards electronic transfers. However, due to processing fees and transfer costs, cash loans are a good option. You can also consider a cash loan when the purpose offers a discount on cash payments.

When you desperately need to pay a bill and quickly dissolve a worrying debt, this is definitely the best option. Cash is quick to access and convenient to use. Unlike other loans, cash loans do not detect how you use your money.

Even though cash loans are useful, there are times when financing your financial goal is cheaper than a loan. They usually have higher interest rates than other loan types.

Business loans

In order to keep up in today’s tense corporate world, business owners need financial backup. An economic crisis or a temporary downturn in the business cycle or may leave your business financially crippled. Therefore, when a business needs to source capital or meet pressing financial obligations, a business loan is necessary. 

Business loans are essential for the growth and survival of a business. Businesses obtain loans as capital to finance profitable projects and investments. Depending on the amount your business needs, the loan can be a short or long term financial obligation. 

There are two different types of business loans, a secured loan, and an unsecured loan. The former secures your loan against your property and generally has lower interest rates. However, the latter requires no collateral, is easier to obtain, but has higher interest rates. 

Payday loan

As the name suggests, a payday loan gives you your salary in advance. It gives you cash to cover your immediate financial obligations before your next paycheck. Sometimes penalties make paying off debt now cheaper than the cost of paying it off later. In such instances, it is essential to acquire a payday loan.

Payday loans are straightforward to access, requiring a simple online application. They are essential to use when you need a small investment for just a short time. Access to the money is granted almost instantly with only a short processing period.

Despite being short term these loans have exorbitant interest rates. Payday loans, commonly known as small-dollar high-cost loans, may trap you in a debt cycle hard to break.

Debt consolidation loan

Juggling many monthly bills is financially draining. Therefore, the need to consolidate your arrears arises when you have numerous debts with high-interest rates. A debt consolidation loan converts all your debts into one loan with affordable monthly payment.

It converts many short-term debts into one long-term financial obligation. Debt consolidation loans help lower interest rates and allow you to have a fixed repayment schedule. This makes credit management and budgeting easier for you. However, this does not nullify your debt. You still need to pay up.

Debt consolidation can leave you tempted to rebound your credit cards and other credit platforms. Therefore requires a lot of discipline to maintain a single consolidated debt.

In Short

The demand for personal loans is skyrocketing every day as people struggle to keep up with expenses. Personal loans are required to meet either planned or unplanned financial obligations. However, note that the requirement to repay a loan is equally essential as the need to access it. 

When you find yourself strapped for cash, in dire need, log onto, and access your loan today!

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