As you are probably aware, there are many different types of loans available today, and for some people, it can be a challenge to decide which one suits their needs the best. In this article, we will take a look at the more common forms of loans and give some information to help you make the right choices when you are looking to borrow money.
- Unsecured Personal Loan – The term ‘unsecured’ means that the loan is not guaranteed by any assets, such as land or property, and should the borrower default on the loan, none of their assets can be confiscated. There are online lenders that specialise in short-term personal loans and you can apply and receive approval within minutes, which is very convenient. It is usual for the lender to verify that the borrower has a regular income and can afford to meet the repayment schedule, plus they may also check the borrower’s credit score.
- Secured Personal Loan – This is similar to an unsecured loan, with the exception that assets would be used to secure the loan, and the duration could be anything from a few months to as long as 5 years.
- Caveat Loan – This is a loan that is secured by property, and if a person has equity in their home, for example, they can apply for a caveat loan, which is usually approved very quickly, plus the lender is not interested in checking the borrower’s income. The lender does not stipulate what the loan must be used for; it might be for home improvements, a holiday or even purchasing a new car, and the big advantage of a caveat loan is the low rate of interest when compared to other types of loans.
- Business Loan – This might be to fund a new business or to support an existing enterprise, and the loan could either be secured or unsecured, depending on the terms required by the lender. When a person applies for a business loan via a traditional lender such as a bank or finance company, usually require a lot of paperwork, such as the business plan and the borrower’s credit score and banking history.
If you are in need of some extra cash for any reason, search online for an Australian reputable lender and they can usually help you to obtain the right loan within a matter of hours, and the rates of interest would vary from lender to lender.