There are all kinds of popular loan styles that have some similarities, but are still very different and especially in their reasons for having the loan. Here are some points that will illuminate the three different types less well known:

 

Car Title Loans

Car Title Loans

These are supposed to be the loans that require the least background check and are usually quite easy to acquire. Loans are granted on the basis of the lower value of the vehicle title paid. This means that the loan amount would probably be only 60% or 70% maximum of the actual value of the vehicle at that time.

The interest charged is usually quite high and the repayment period is very short. Overall, this type of loan is usually only contracted in very desperate circumstances or when the necessary funds are low and obtaining a real loan from the banks would not be feasible or easy.

 

Payday loans 

Payday loans 

this is also another type of very expensive loan as the interest rates required are comparatively high. Basically, the borrower will write a series of checks to repay the amount borrowed with the agreed interest added and these checks must be held by the lender up to the date agreed upon to cash in the amounts indicated.

This is a quick and seemingly easy way to get money when needed, but the interest charged is often the reason why people end up being caught in a vicious circle of endless borrowing scenarios.

 

High Interest Rate Loans

High Interest Rate Loans

These are usually loans that are given to people who have difficulty getting loans through the best loan acquisition channels. Because of the design of these loans, which can be rather intimidating, it is generally sought after by people who already have very low credit ratings. This will allow the lender to guarantee payments in full, including the high interest charged.

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