Personal loans,Personal lines of credit, Student loans ,Credit cards/department store cards
Personal loans • Personal lines of credit • Student loans • Credit cards/department store cards Payday Loans Payday loans are relatively new on the loan scene. They are short-term loans borrowed using the borrower’s next paycheck as guarantee for the loan so, in a way, they are secured. However, payday loans have notoriously high annual percentage rates (APRs) and can be difficult to pay off. Banks do not generally offer Payday loans. Most establishments offering them are private companies with separate storefronts. Title Loans A title loan, also fairly new, is a type of secured loan where the borrower can use their vehicle title as collateral. Borrowers who get title loans must allow a lender to place a lien on their car title, and temporarily surrender the hard copy of their vehicle title, in exchange for a loan amount. When the loan is repaid, the lien is removed and the car title is returned to its owner. If the borrower defaults on their payments then the lender can repossess the vehicle and sell it to repay the borrowers’ outstanding debt. Typically, the same companies that offer Payday loans will also offer title loans. Student Loans Student loans are, of course, used to get a person through college or other educational institution. There are many different types of student loans including: Stafford loans, the most common federal education loans students receive. They can be either subsidized or unsubsidized. Perkins loans, low-interest federal loans, administered by the school, for students who demonstrate exceptional financial need. PLUS loans, usually used to cover expenses not met by other federal financial aid. These can be taken out by dependent students’ parents or by graduate students. Institutional loans, non-federal aid that schools loan their students. Private loans, usually sought by parents of students ineligible for other aid or those who do not receive enough aid to cover the cost of attendance. In many cases, these must be secured by some form of collateral.