Don’t be afraid of the world of personal loans, but don’t walk around in that world blindly, either. There are scams out there, but there are also many legitimate financial institutions that can help you get that much closer to your dreams with a boost of a personal loan. You can keep away from scams easily if you keep one piece of advice in mind if it sounds too good to be true, it is!
There are many inhabitants in the alien world of personal loans. Here’s a basic identification guide. One family is called “payday loans” and there are many members in this family.
This is a quick way to get a small loan, even a loan of just $1000. It’s called an online fax loan because you usually get everything done by fax machine instead of having to show up to a bank in person. You usually avoid a credit check by showing your last two pay stubs.
Payday advance loans can be done with or without a fax machine, as long as you are employed and have a verifiable bank account. Keep in mind that their interest rates are going to be very high, even higher than most credit cards. So, you might wind up paying $1000 for a $500 loanor more.
Cash Advance Loans
This is another type of online fax loans, usually applied for online rather than in an office. Depending on the company, you need to show more proof that you are financially stable than for other online payday loans. You often need to prove that you make a certain amount of money per month.
When looking for payday loans, you will see them under a variety of names in the internet or in print advertising. One of the names they are known as is “cash advances”, despite the fact that money is put into your back account electronically, not by putting cash into your hand.
Cash Advance Payday Loans
This is yet another term for a payday loan that delivers money electronically to your bank account or your credit card and not as cash in your hand. Years ago, services like credit unions did provide small personal loans as bills in your hand, but not any more. However, the term has stuck.
Another prominent family in the world of personal loans is called “factoring loans”. They are for small businesses only and therefore tend to have lower interest rates than payday loans.
If you need a personal loan for your business (not just for yourself), then you need the help of a factoring service. They give you a small loan so you can keep your employees and venders paid, while waiting for your customers to pay you.
This is another name for factoring services, but you can get invoice factoring to help get a loan for your small or home-based business. These usually can be for very small amounts (as compared to a regular business loan) with lower interest rates than credit cards.
The way factoring works is that you sell what you expect to get from your customers to the factoring service. This is called selling your invoices. This shows the service you have money due. It is technically not a loan, but works like one.
The final prominent family in the personal loan world that we will look at is called “home equity”.
Equity Home Loan Texas
In Texas, you can only borrow up to 80% of your equity, unlike in some other states. That’s still a big chunk of change. However, if you can’t pay back a home equity loan in Texas, you will loose your house.
No matter what state you live in, you can usually be eligible for a home equity loan. This kind of loan is as large as a mortgage, but tends to have low interest rates and a long time in order to pay back.