Are you new to the lending industry? Do you need a loan (or some sort of financial assistance) and aren’t sure what sort of loan is best for you? Well, you are in luck! We have put together this blog piece for you so that you can learn all about the different types of loan. We’ll be giving you an overview of the most popular loan products – including of course the payday loan! So without further ado, let’s get into it!
The Personal Loan
A personal loan is perfect for any person who needs to borrow between £1,000 and £20,000 for personal reasons. There are usually no restrictions attached to a personal loan so if you are accepted you can spend the loan amount on pretty much anything you like. Common reasons for getting a personal loan are to buy a new car, to renovate or extend your home, or to pay for a large expense. Personal loans are also, more often than not, an unsecured loan. This means that you do not need to offer any security against the loan, such as your home or car. As may well be obvious, this is a loan offered to an individual, not a business. The interest rates on this type of loan can vary massively between 3% and 20%-30% and your personal circumstances and credit score will be a factor in which interest rate you are offered.
The Secured Loan
This is a loan type that dictates you offer up an asset or item (i.e. your house) as a means of financial security. This means that if you do not pay back your loan in full, or if you fall far behind on your payments then the lender has the right to claim the item offered as security as payment in lieu of money. The benefit of the secured loan is that you are able to borrow much larger sums, between £3,000 and £100,000. Interest rates are also generally lower, at around 5% to 10%. Also, you will have longer to repay the loan amount, with some lenders offering repayment durations of 25 years. This is a riskier loan to acquire as the amounts are much higher – make sure you do your research before putting your house up as an asset against any sort of loan!
The Payday Loan
The payday loan is our speciality here at LoanPig. We are a trusted and an ethical provider of payday loan products and are used by a huge number of diverse clients on a daily basis! So, what is a payday loan? It is a simple loan in essence (far simpler than the above 2 other types of loan) and with LoanPig, all you need to do is enter in the amount you want to borrow, and how long you want to borrow it for, and our handy loan calculator will tell you exactly how much you will be required to repay. Get your application started and see just how much you can borrow! Once you have completed our application form all you need to do is hit submit, and we will do the rest – and will get back to you as soon as we can with our decision. The chances are high that you will be accepted for a loan, as we have a very good acceptance rate. If we are not able to provide you with a payday or a short-term loan then as a broker and a direct lender we should be able to connect you to a different UK based lender who should be able to help you.
The Debt Consolidation Loan
This is a loan type that is used often by people with multiple debts across multiple different lenders. A debt consolidation loan is (more often than not) just a personal loan with a different branding and interest rates etc. Essentially, with this type of loan, you use it to pay all of your loans off and consolidate all external debts into one lump sum of debt with just one provider. This is a popular means of debt management but is not without its negatives. You could end up paying less off each month (as this is indeed the goal) but when you factor into interest payments, as well as the length of time that debt consolidation loans are offered (often considerable) then you could end up paying off more in total in the long-run.
The Bad Credit Loan
This is a type of loan that is marketed and designed specifically for people with bad credit or a less than perfect credit score. This would be perfect for you if you have in the past or are currently struggling to secure yourself a typical type of loan from a traditional lender, bank or building society. You will end up paying a higher rate of interest as the lender in question will deem you at a high risk of defaulting on your loan or failing to meet your repayment obligations.
The Guarantor Loan
The guarantor loan is another such example of a loan product that is marketed towards those people with poor credit. A guarantor is somebody who will be responsible for your loan if you are unable to repay it yourself. You will have to elect this person and they will have to agree to be your guarantor. Typically, these people are a parent, a family member or a close personal friend. Bear in mind, the interest rates on this type of loan are often huge. Around 40%.
Get In Touch With LoanPig
If you would like to discuss a payday loan with us here at LoanPig, or if you want to ask any questions regarding our short-term loan products then please do not hesitate to contact us. If you would like to email us directly you can use our email email@example.com. We are a fully FCA authorised and ethical lender, and we are here for you when you need a quick injection of cash in a financial emergency.