Whether you are looking to make a large purchase, remodel your house, or simply have a financial emergency, you will one day face the decision of taking a loan. There are several types of loans out there that may be beneficial for you. It is best to do your diligence and equip yourself with knowledge of how the different types of loans function and how each can be beneficial for you, depending on your financial goals. A few different types of loans that can help you with your needs are conventional loans, open ended loans, and car title loans.
Conventional loans are loans that are typically loans that you will use to secure a home mortgage. Conventional loans are typically the most conservative types of loans. These loans adhere to stricter conventional lending guidelines based on your credit score and your debt to income ratio.
Conventional loans are a great alternative when you are looking to make a large purchase such as buying a house. These types of loans are going to be a good choice if you are not in a rush to secure your loan, you have good credit score, and you don’t mind stricter and more conservative lending guidelines.
Open Ended Loans
An open ended loan is basically a loan that does not contain a set date for repayment of the loan. A couple of examples of open ended loans would be your credit card that has a line of credit or even your home HELOC would be considered an open ended loan.
An open ended loan typically limits the amount of funds you have access to, while not specifying a payoff date. For example, if you have a HELOC and you have $30,000 equity in your home, you typically will have a line of credit for $30,000 and no more. The advantage to this type of loan is that open ended loans provide easy access to money and if you end up repaying the whole amount, in this example you pay off the $30,000, then you can tap into the line of credit again without having to reapply for another loan.
Car Title Loan
Auto title loans are basically loans which allow you to tap into existing equity in your vehicle to access quick cash. These types of loans are beneficial because you don’t need a good credit score and you can have your cash in less than 24 hours.
If you are facing an emergency or unexpected financial circumstance, then a car title loan may be best for you. Depending on the age and mileage of your vehicle, you may be able to have a check in your bank account for $10,000 or more. These loans are generally short term loans which mean you can keep the fees low if you pay the loan back quickly.
For more information or to apply for a car title loan, apply here on this site or give us a call for a free quote today.