Loan proceeds can be an excellent way to achieve personal and business goals.
They can also get borrowers into trouble if they do not get the best that suits their income patterns leaving them bankrupt.
They might not be a good Idea if you do not have stable income inflows.
Based on the intended use, one can choose from the following:
Personal loans:
Available in most financial institutions, personal loans provide flexibility regarding spending.
Most of them are unsecured are given based on the credit history and hence easy to secure.
There is no limit to what the borrower can do with the money, as the lending institution does not monitor the users.
However, they attract higher interest rates than secured loans and are best for small amounts.
Cash advance:
When it comes emergencies, cash advances allow one to access funds quickly.
They are easy to secure but often comes with high interest rates and in small amounts.
They are best when there is no other alternative form of funding.
Student loan:
Amid rising costs of educations, different states provide students loans that help finance college students.
The loans bear lower interests rates and are payable once the students graduate from college.
Nonetheless, the can accumulate to higher amounts burdening the graduates at the start of their careers.
Small business loans:
Most local banks and the SBA provide small business loans to entities with viable business plans.
The applicant needs to provide collateral for the loan to cushion the debt in case of business failure.
The amount can be from thousands to millions of dollars depending on the scope of the firm.
Home equity loans:
The loan applies to those that own the house more than they owe on the property.
The homeowner takes a loan against home equity to consolidate credit card debt, pay off student loans, renovate the house and fund other projects.
The line of credit allows borrowers to get loans before paying the full amount.
Mortgage loans:
They are loans given by financial institutions to enable consumers to buy homes.
Mortgage Loans offer longer repayment period, lower interest rates and higher amounts than conventional loans.
They are tied to the property hence risks foreclosure if the borrower falls behind on installments.
