Payday Loans
Payday loans, or cash advance loans, are another form of small loan that can be obtained regardless of credit history. Such loans are granted by small franchise businesses and online to give borrowers enough money to hold them over until their next payday. You probably drive by payday lenders quite often.
These loans are very small and the repayment periods are very short – about two to four weeks. Literally, they become do on your next payday. Upon obtaining your loan in cash, you must submit a post-dated check for your lender to cash when the loan becomes due. If you cannot afford it at this time, then you will be encouraged to roll your loan into another loan.
While payday loans may work in theory, they should be considered only with great caution. The fees attached are astronomical and cover only a couple of weeks at a time.
Learn more about payday loans.
“Secured” is not a Bad Word
Whether you have poor credit or a clean slate of history, do not automatically avoid secured loans if you have a home or other valuable property. While it might seem like an unsecured loan could provide you with more peace of mind, in reality one could make a convincing case for both types.
While you may be uneasy using your home as collateral, remember that your house will be in jeopardy only if you fail to repay your loan as expected. If you are unsure of your ability to pay, however, then an unsecured loan will not keep you safe from collectors anyway.
Instead of automatically seizing your property, the lender of an unsecured loan can take legal action against you for payment – which they very likely will do. Is this really any better for you?? If you do not think that you will be able to make payments on a secured loan, then you really cannot afford to get a similar unsecured loan either.
In addition, a secured loan will provide you with a lower interest rate than an unsecured loan, no matter what your credit status. You also may be able to take out a larger loan if it is secured.
In other words, while unsecured loans are a very attractive option for many borrowers, do not automatically disregard secured loans until you compare your options. It is possible that a secured loan is better for your situation after all.
Conclusion
Small unsecured loans can be great options for individuals who do not want a loan that is secured against collateral, or do not own valuable property. Even borrowers with bad credit can obtain such loans, and they can be used for any purpose deemed necessary.
Before deciding on your best course of action, however, compare all of your options to see which fits best with your financial situation and goals. As always, check all lenders of interest with the Better Business Bureau before making your decision.
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