Types of Loans

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While it’s always a great idea to only buy things you can pay cash for, that might not always be feasible. If you’re looking to get a loan, or just interested in learning about some of the various types of loans available, check out the following. Keep in mind that these are just a few of the myriad possibilities!

Student Loans

One of the most common loans available is a student loan. As may be obvious from its name, this type of loan is for those who are interested in financing their education. Typically available for undergraduate, graduate, or doctoral studies, student loans usually have a low interest rate. You can use your student loan money to pay for tuition or any other school expense. There are several types of student loans available, including privately funded loans and those funded by the government.

Mortgage Loans

Part of the American dream is to buy a home, but most people can’t afford to buy one outright. A mortgage helps make this dream a reality! Mortgage loans are usually offered in either 15- or 30-year plans, with payment due monthly. Unfortunately, it can be difficult to get a mortgage loan with bad credit, so if this is something that’s of interest to you, make raising your credit score a priority. There can be ways around your bad credit, though, if you do your research!

Car Loans

Many people desire a car but cannot afford a big lump sum. As a result, many people opt to buy a car using a car loan. Most, if not all, car dealerships provide buyers with the option to pay little to nothing down before taking home their shiny new car. You can also get a car loan through your bank, instead of through the dealership. It’s a good idea to look at interest rates provided by your bank and compare them to those at the dealership to see which is a better choice for you. You can also look to see whether you’ll get a better rate if you choose to buy a new car versus a used one.

Pawn Shop Loans

Typically offered as a much smaller loan than the others on this list, a pawn shop loan is often no more than several hundred dollars. To get a loan from a pawn shop, you must bring in an item of value to them, then they will hold the item in exchange for a small loan. If you don’t pay them back within an agreed upon amount of time, the pawn shop gains ownership of your item and is allowed to sell it for profit. This is one of the few loans you don’t necessarily have to pay back, although you will technically pay for it with the item you gave up.

There are many loans available for all sorts of purchases, ranging from small loans like those offered by pawn shops to large loans offered to help you further your education or buy a home or car. These loans can have different interest rates depending on what provider or type you choose, though, so be careful to do your research.

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