Sometimes, it’s difficult to take time and understand the fine prints when you are already in need of money. Also, knowing the different types of loans and which one fits you the best can get confusing at first but don’t worry because we got the basics sorted out for you. In fact, these loans are actually like real people – a comparison which can help you understand them better!
Ready to meet them?
Secured Loan: “Better safe than sorry!”
They are your skeptic and doubtful friends who always want to make sure that you pay back your dues. With secured loans, you have to put up collaterals (such as a car, house, or land) upon applying so that your lender can have something to hold on to. And if you are unable to pay, then they have the authority to take these properties.
This type often applies to house and car loans and is recommended for those who have a stable income so as to not risk your assets. Secured loans are also for those who just need a big, immediate funding for a major purchase instead of saving up for it.
Unsecured Loan: “Sure, if you’re cool enough.”
Slightly more trusting, unsecured loans are like your friends who will willingly lend you something – but only if you pass their standards. Unlike secured loans, you don’t have to present any valuable properties when you apply but you still have to undergo series of processes and submit requirements that might have high eligibility criteria.
This loan is best used for smaller-scale expenses which you can easily return over time. However, even though it does not have any collateral requirements, failing to do so will result to higher interests which might make paying back more difficult.
Online Loan: “Deal! Done and done.”
Lastly is the most laidback one of all. Most online loans neither require any collaterals nor implement strict guidelines when applying. As long as you submit the necessary requirements and pass their basic qualifications, you’re good to go!
Online loans (such as Cashwagon) are perfect for emergencies when you need instant cash since the processes are quick, easy, and simple. Also, most of the time, you can still apply even with a bad credit score!
Before taking on a loan, it is important to know and understand what you are getting yourself into. Take time to analyze which works best for you because like people, there are loans which can easily fit into your lifestyle while there are others that aren’t just meant to be. Choose wisely!