When you are in desperate need of money quickly, there are several different methods that you could use to get your hands on the cash. Borrowing the money could work, but you have to decide what type of loan you actually want to use. In this situation, here are a few of the different loan types that you could explore.
Secured vs. Unsecured
When choosing a loan, one of the factors that you’ll have to evaluate is whether you want a secured or an unsecured loan. With a secured loan, the debt is secured with some kind of collateral that you offer to the lender. For example, you may use your house or your car as collateral. If you don’t pay the loan back, they’ll take possession of the collateral and sell it to get the money they need. With an unsecured loan, they do not have any specific form of collateral attached to the loan. These loans typically come with higher interest rates, but there is less risk involved for you.
Open vs. Closed-End Loans
In this situation, you also have to look at whether you want an open or closed-end loan. With an open-ended loan, there isn’t a specific date in which the loan will be closed out. You just have the loan until you pay it off. With a closed-end loan, you pay for a specific amount of time and then at the end of the loan, it is completed.
Advance Fee and Payday Loans
You may also choose between an advance fee and a payday loan in this situation. With an advance fee loan, you typically have to pay for the fees associated with the loan before you can get the money that you need to borrow. With a payday loan, you don’t pay anything upfront. You just borrow the money that you need, and then you pay back the money with fees and interest after that – see here. If you don’t have any money, a payday loan is definitely the way to go between these two. Advance fee loans can eat up the available money that you have, before even taking out the loan.
Before agreeing to any loans, it is important to make sure that you review all of the terms and conditions. This way, you’re not caught off-guard at any point throughout the process. You’ll be able to pick the loan that is most appropriate for your situation.