Because of the competitiveness in the current lending marketplace, lenders are offering hyper-competitive rates for loans online. Traditional lenders, such as loans from banks or credit unions, are no longer always the cheapest place to get a loan.
You can now apply for loans online from the comfort of their own homes without having to ever step foot in a store.
Consumers can now apply for loans online and get approved without setting foot inside a brick-and-mortar bank. Knowing the different types of loans available allows you to better understand all your options and choose the loan that’s best suited for your situation
A secured loan is one that you take out against something you own, generally a vehicle or a home. The asset is considered collateral. If you default on the loan, the lender will seize the collateral to help pay off the loan.
Generally, the interest rate on a secured loan is lower than an unsecured loan, because the risk is lower. In fact, you may even be able to negotiate a lower interest rate on a secured loan.
Consumers with better credit ratings tend to get better terms and interest rates on secured loans, as the risk to the lender is lower. Furthermore, a secured loan may also have more flexible repayment terms.
Examples of secured loans include:
An unsecured loan does not involve any type of collateral. With this type of loan, the only recourse the lender has on your default is to freeze your account.
They can then attempt to collect your debt using a debt collection service. This will cause damage to your credit report and possibly prevent you from taking out any other loans or getting a mortgage for a long time after you resolve the issue.
The lender generally ties the amount of money you can borrow using an unsecured loan to your debt-to-income ratio, assets, and credit history. Because the lender is taking on more risk, an unsecured loan usually carries a higher interest rate.
Begin the application process.
Fill out the online form. If you have selected a legitimate lender, you should not feel insecure about providing the sensitive information that will be required.