Personal loans are a common go-to option for anyone who has a financial crisis. However, it is not the only option offered by many financial institutions. Some other assistance that these companies offer include credit cards, car loans as well as title loans and cash loans for people with bad credit. Here is a guideline of how to get a loan with bad credit, and differences of personal loans to other types of credit lines and loans.
Car Loans Can Be More Affordable Than Personal Loans
Both personal and car loans are in essence the same, but their purpose varies greatly. Personal loans can be used for a wide variety of purposes. Car loans, on the other hand, are designed especially for aiding in the purchase of a car or any other vehicle. Another thing that sets them apart is that car loans offer more security for the lender than personal loans. This is because the lender has a financial stake in the vehicle that will be bought. So, if the borrower will not be able to pay for the vehicle in accordance to the terms set in the agreement of the loan, the lending company will have the right to seize the car for themselves. A personal loan, however, does not present that security, which is one of the reasons why it is more difficult to apply for a personal loan. In a lot of cases, applying for a car loan is usually a bit cheaper than personal loans when it comes to interest.
Credit Cards – A Line of Credit with Many Incentives
The main difference between credit cards and personal loans is the fact that personal loans are supposed to be paid in a certain amount of time. Credit cards work within a revolving line of credit, which means that there is a credit limit and there must be frequent payments for the account that you have with the financial institution in order to remain in good standing. Another difference that makes credit cards preferable to a lot of people are the incentives. While the only incentive you really get with personal loans is getting the whole amount in one go, credit card companies have rewards, interest-free days and balance transfers. Credit cards can be used for small purchases such as groceries, beauty products and the like. Just make sure that your purchases will not exceed the credit limit. Credit cards can also be a wise option for people trying to rebuild credit as well.
So, next time you consider applying for personal loans online, remember the information above so you would know which would fit the purpose. Personal loans will be beneficial for you if you need big amounts that may be used for a lot of things. Title loans and cash loans are general use loans that you can be approved for even with the worst of credit. Although the interest rates are higher, these loans can be worth it if you are in an emergency situation with little or no credit. If you have good credit, a credit card can be actually be more affordable than a personal loan if you consider the low interest rates and incentives offered. However, for some consumers, credit cards many not be the smartest loan option, especially for those that face credit issues.
Cash Loans & Title Loans – Easy Cash for People with Bad Credit
Generally speaking, cash loans are a lot smaller than personal loans. This is because cash loans are just short-term band aid solutions to a financial crisis that may come up for a person struggling with poor credit. The processing time for the loan is quick and application process usually is a bit relaxed compared to other personal unsecured loans. However, while the amount is usually small, the interest rates applied to the amount borrowed are usually high. Thankfully, most cash loans are settled either or the next pay day or the next two pay days. Another viable option for people with credit issues, is a title loan. If a person has a clear title to a car, truck, motorcycle, or even RV, title loan lenders will loan money to an individual based on the value of the vehicle instead of on their credit score. Compared to cash loan interest rates, car title loans are much less expensive.