Understanding the Sources of Consumer Loans

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    It’s important to consider the state of your credit history before applying for a loan. This is because most lenders need a perfect credit score to grant you a consumer loan. But if your credit score is good, you can have hope knowing that many lenders are there willing to offer you a consumer loan with competitive interest rates. Before you consider taking either a long-term or a short-term loan, you may need to familiarize yourself with the various loan sources. This post will reveal some of the places where you can get a consumer loan. 

    Commercial banks

    Commercial banks are perhaps one of the good sources to get consumer credit. You see, banks are always on the lookout for people who can get loans and have the capacity to make repayments. While it’s easy to secure a loan, you should remember that you need to pay interest for it. Use Instabank for the various types of loans, such as consumer loans and credit card loans.

    Consumer loans are regarded as loans that you can use for installment purchases and you repay them with interest monthly. Most of the consumer loans are for boats, cars, furniture, etc. On the other hand, credit card loans can be available as cash advances within specified credit limits.

    Consumer finance companies

    Consumer finance companies also offer personal installment loans, especially to people without a good credit history. This means people who have poor credit scores can have access to these loans and might not need collateral. These finance companies target people who fail to get credit from traditional banks. But the interest is usually high because the risk is also high. 

    When it comes to the interest rate, it usually varies depending on the repayment schedule and size of the loan. The good news is that finance companies can process these loans pretty quickly, meaning you can access the loan often on the same day that you submit your application. 

    Other lenders

    Recently, pawnbrokers are providing secure loans, though they are considered as unconventional. So to get a loan from the pawnbrokers, they usually hold your property and give you a part of its value. If you pay back the loan with its interest on time, you can reclaim your property. However, if you fail to do this, the pawnbroker can sell it, though you can make an extension arrangement. 

    The good part about this type of loan is that you don’t need to apply and wait for the loan approval. But most pawnbrokers might charge you a higher interest rate than other lenders. 

    Some people go for the loan sharks to get a loan. Because these lenders don’t have state licenses to do their lending businesses, they charge excessive rates. Worse still, the repayment for these loans is generally a very short time. They are also infamous for their unorthodox collection ways which can sometimes involve violence. As you can see, you have to stay clear of these types of lenders.

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