Knowing the Various Types of Personal Loans

People may be surprised to know that there are different types of personal loan that is being made available by most traditional and alternative MONEY LENDER. It is necessary you get to know some of these types from money lender review so you can correctly select the type of personal loan that would suit your financial needs. The following are a brief description of these different types of personal loan and perhaps after understanding the basic principle on how they work, you will be able to select the right option for you.

 

Convertible loans; Fixed Rate Loans & Installment loans

 

Convertible loans are more adapted to businesses because this type of loan gives the lender a different kind of payment option. Under the agreement the lender can convert the loan amount into equity into the borrower’s company. This means that they can be part owner of the business if they choose to convert the loan into equity. Fixed rate loans are loans whose interest rate will remain the same all throughout the life of the loan. This type is usually preferred by people who are purchasing properties. Installment loan on the other hand is when the borrowed money is required to be paid at regular intervals usually monthly and with a fixed amount of amortization.

 

Payday loan, Signature Loan & Single Payment Loans

 

Payday loan also known as cash advance loan is a short term loan usually provided by PAYDAY LENDER. The problem with this kind of loan is it charges a very high rate of interest. Signature loan on the other hand is a type of a loan whose only guarantee of payment is your signature. The lender however will only allow this kind of loan if your credit score is way above average. Also this type of loan demands a very high interest rate. Finally, we have the single payment loans. Also known as bridge or interim loan, this loan is short term and the usual demand for repayment is lump sum at the maturity date of the loan. The lump sum amount is the principle loan plus interest. A PAYDAY LOAN can also be considered as single payment loans.