Four common types of loans include personal loans, auto loans, home equity loans, mortgages and more. Each of these loans is used for a different purpose and has different loan amounts, APRs, payoff periods and fees. But one thing most loan types have in common is that the borrower gets a lump sum of money up front and pays it off over time.
The easiest loan to get approved for is a no credit check loan from OppLoans. In order to get approved, you'll just need to have a steady income and be at least 18 years old and a U.S. citizen or permanent resident with a Social Security number.
Among lenders that do a credit check, the easiest loans to get approved for are from LendingPoint. This online lender requires a credit score of 580 or higher for approval. LendingPoint loans also range from $2,000 - $30,000 for 24 - 72 months, and they have an APR range of 7.99% - 35.99%.
There are other easy-to-get loans available besides no credit check loans, as well. Some examples include unsecured personal loans, secured personal loans and payday loans, among others.
Types of Loans That Are Easy to Get
No Credit Check Loans
A no credit check loan is the easiest type of loan to get approved for, though it isn't necessarily the best choice for everyone. No credit check loans are usually quite a bit more expensive than loans from lenders that check your credit.
Unsecured Personal Loans
Many unsecured personal loans may be easy for people with bad credit to get approved for since they typically have a credit score requirement of 580 or higher. However, these loans are risky for lenders to offer since you do not have to put up collateral.
Secured Personal Loan
The reason secured personal loans are easy to get approved for is that you will have to put up collateral that the lender can keep if you don't pay the loan back. This minimizes the lender's risk, so the approval criteria are relatively easy to meet.
A payday loan is a small, short-term loan that you pay back with your next paycheck. But payday loans are incredibly expensive compared to normal personal loans, so they are not worth pursuing except as a last resort.
Emergency loans are personal loans that you can get within a few business days to pay for unexpected expenses such as hospital bills, auto repairs or fixing storm damage. They can offer up to $100,000 in funding, low minimum APRs and long repayment periods.
Hardship Loans from Local Government
All states offer hardship or disaster loans, whether it’s to help pay rent or to keep a small business afloat. These loans typically have eligibility requirements that are different from state to state.
Hardship Distribution from Your 401(k)
You can withdraw money from your 401(k) because of an important, immediate financial need. However, you cannot take out more than necessary to satisfy the need and you cannot repay the withdrawal.
A 401(k) loan lets you borrow money from your retirement account. You will need to repay the loan, along with interest, within 5 years of taking it out, or else there are taxes and penalties, in most cases.
A paycheck advance is a way to get a portion of your next paycheck from your employer earlier than scheduled. Not all employers offer this service, though.
The main types of installment loans are personal loans, mortgages, home equity loans, car loans, student loans and credit-builder loans. Each type of installment loan has different requirements, APRs, fees, payoff periods, and amounts of funding. Some are also used for specific purposes.
Personal loans are installment loans that can be used for nearly anything. They typically range from … read full answer$1,000 to $100,000, with payoff periods of 12 to 84+ months, depending on the lender. Personal loan APRs are usually between 4% and 36%.
The credit score requirement for a personal loan is usually between 585 and 700. You can see if you are pre-qualified without hurting your credit score using WalletHub's free pre-qualification tool.
Mortgages, or home loans, allow people to finance a house without having all of the money up front. The issuer of the mortgage continues to partially own the house until the borrower pays the mortgage off fully. If you can't pay the mortgage off, you risk foreclosure.
Mortgages typically last for 10 to 30 years, and the average APR is around 2% to 4%. Mortgages usually require a credit score of around 620 if they're private or 580 if they're government-insured.
Home equity loans allow people to borrow a portion of the difference between the value of their home and the amount left to pay on the mortgage. The loan is secured by the house, however, so there's a risk of foreclosure if you can't pay what you owe.
Home equity loans usually last for 5 to 30 years, have APRs of around 2% to 6%, and tend to require a credit score of at least 680.
Auto loans help you finance the purchase of a new or used car. They usually last anywhere from 24 to 72 months and have APRs of around 2% to 6%. While there isn't a minimum credit score to get an auto loan, the higher your score is, the better your terms are likely to be.
The big downside to auto loans is that since they are usually secured by the car, your vehicle could get repossessed if you can't pay back what you owe. There are also loans for other types of vehicles, such as motorcycles and boats, that function the same way.
Student loans are loans for the purpose of paying for education and related costs like housing and food. Some are federally backed, while others are private. Federal student loans tend to have interest rates around 2% to 5%, while private loans have rates around 1% to 12%.
Student loans usually last around 10 years, but some can last for up to 30 years. You can use WalletHub's student loan calculator to help you calculate how much your monthly and total payments will be.
Credit-builder loans are probably the most unique type of installment loan. They work the opposite way of a normal loan. You make monthly payments to a lender, which puts the money (minus the interest charged) in a savings account. Once you have finished your required payments, you get access to the money in the account. The purpose of a credit-builder loan is to have positive payment information reported to the credit bureaus each month and to establish or improve your credit history.
Ultimately, choosing which type of loan to get is up to you depending on what you qualify for, what your financial standing is and what you need the loan for. You can visit WalletHub's best installment loans page to see the top ranked offers.
The biggest difference between a home equity loan and a personal loan is that a home equity loan is secured by a house while a personal loan has no collateral in most cases. Home equity loans and personal loans also differ in terms of their repayment period, interest rates and the amount available to borrow. A home equity loan’s repayment period lasts 5 - 30 years, according to Experian, while a personal loan usually lasts 1 - 7 years. Interest rates on home equity loans typically range from 4% to 8%, while personal loans typically charge 6% - 36%.… read full answer
Personal loan amounts range from $1,000 to $100,000. Home equity loans, on the other hand, don’t really have an upper limit. That’s because home equity loans allow you to borrow against the value of your home, minus the amount you have left to pay on the mortgage, otherwise known as your “equity.” So the more valuable your house is and the more money you’ve paid on your mortgage, the higher your equity is and the more you can borrow.
Your home serves as collateral with a home equity loan. So if you default, the lender may be able to foreclose on your house to ensure they get paid. Most personal loans are unsecured, meaning the lender doesn’t have any collateral to take possession of if you default. But there are some personal loans that are secured, using things like auto titles, stocks or your next paycheck as collateral.
Both home equity loans and personal loans offer you a lump sum of money which you pay back over time along with interest charges. And when you apply for both, lenders will consider your credit score, income and other debts, among various other factors.
Home Equity Loans vs Personal Loans:
Home Equity Loan
5 - 30 years
1 - 7 years
4% - 8%
6% - 36%
Based on your home equity
$1,000 - $100,000
Yes, by your home
Sometimes, mainly for bad credit
Typical credit score needed
(660+ for no origination fee)
Top 10 banks
Conclusions: When to Get Home Equity vs Personal Loans
Home equity loans are better if you want more time to pay the loan off, lower interest rates and potentially larger loan amounts.
Personal loans are better if you don’t want to (or can’t) use your home as collateral, especially if you would like a larger variety of lenders to choose from. They’re also ideal if you want the opportunity to pre-qualify before applying.
Top Alternatives to Consider
It’s useful to note that there are several alternatives to using either a home equity loan or a personal loan. One alternative is a “home equity line of credit.” Unlike a home equity loan, which offers a lump sum of money, a home equity line of credit lets you borrow money whenever you need it during a set period of time. But there’s no obligation to borrow. You can think of it as a giant credit card that’s secured by your house.
For smaller borrowing amounts, credit cards are also an option, though their APRs tend to be more expensive than those of home equity loans and personal loans. However, there are some credit cards that offer an introductory 0% APR for a certain number of months.
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