Five 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 loans to get approved for are payday loans, car title loans, pawnshop loans and personal loans with no credit check. These types of loans offer quick funding and have minimal requirements, so they’re available to people with bad credit. They’re also very expensive in most cases.
Below, you can compare some of the easiest-to-get personal loans available right now.… read full answer
A personal loan from OppLoans is one of the easiest loans you can get approved for because there’s no credit check when you apply. All you’ll need is to be at least 18 years old, have U.S. citizenship or permanent residency, and have enough income to make your payments each month. Integra Credit and 60MonthLoans are two similar options.
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, require repayment in 24 - 72 months, and have an APR range of 7.99% - 35.99%.
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.
Car Title Loans
Car title loans usually allow you to borrow anywhere from 25% to 50% of the value of your vehicle in exchange for the car’s title, which serves as collateral for the loan. This type of loan typically comes with a monthly finance fee of 25% and a short payoff term of 15-30 days, so be cautious.
A pawnshop will evaluate a personal item that you bring in as collateral and loan you a percentage of its value. Pawnshop loans offer instant cash but can sell your property if you fail to repay the loan.
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 best type of loan for home improvements is either a personal loan or a home equity loan, depending on things like the amount of funding you need and whether you’re willing to risk your home as collateral. Both of these types of loans allow you to use the money for nearly any expense, including home improvements.… read full answer
Best Types of Loans for Home Improvements
Type of Loan
Home Equity Loan
Amount of funding
$1,000 - $100,000
Depends on your equity (could be more than $100k)
Yes, your house
1 - 7 years
5 - 30 years
4% - 36%
4% - 12%
Credit score requirement
585+ (660+ for no origination fee)
Usually within 7 business days
2 - 6 weeks
The most important distinction between using personal loans and home equity loans for home improvement is the presence or absence of collateral. Personal loans are unsecured loans that allow you to borrow based on your credit, income and other factors. Home equity loans let you borrow based on the difference between your home’s value and the remaining mortgage balance, using your house as collateral if you default. Home equity loans will still consider your credit and income, too.
If you want a lower APR and a longer payoff period, and you don’t mind using your house as collateral, you should use a home equity loan for home improvements. If you prefer having an unsecured loan with less stringent credit score requirements and faster funding, a personal loan is the better choice.
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