Your 101 Guide to Consumer Loans

August 14, 2019 by Susan Paige

The topic of loans is a dicey one and has been debated over for a long time now. Some finance experts would say that loans can help overcome an adverse monetary situation if managed well, while the others would inform you of the complications that loans have the potential to spin. The subject continues to spark heated arguments every other day, but the utility of loans in easing human lives cannot be refuted.

Several types of loans have been doing the rounds in the financial market since the very inception of its concept. One of those loans that we shall attempt to shed light on in this article is consumer loans. Consumer loans itself is an umbrella term and should be treated as such. Placing it into any one watertight compartment of definition would be unjust to its nature. There are several types of consumer loans- personal loans, student loans, mortgages, auto loans, home equity loans etc. Each of these loans has specific roles and purposes of their own. They differ from one another in their structure yet fall under the umbrella term of consumer loans. That being said, we shall now inspect each of these consumer loans in greater details to get an understanding of what they are and how they help individuals realise and materialise their dreams. You can also look up the site instabank.se to find more metrics that will help you analyse your situation and therefore, apply for an appropriate loan.

Personal Loans:

One of the most applied for and sanctioned loans, personal loans have become increasingly easy to access at this day and age, given the improved job and living conditions of people. Most people have a job that pays them handsome figures at the end of each month which makes it easier for them to pay off the monthly instalments of loans, no matter how large the principal amount and rate of interest might be. Making responsible payments and other transactions also lead to a decent credit score, which further makes them eligible for such loans. It is more like a cycle if you put it under microscopic scrutiny.

Personal loans can be applied to meet various financial affairs. For instance, you can apply for a personal loan if you need to sponsor the cost of your child’s college education, wedding or if you want to buy a car. However, when the matters of the purchase of a vehicle, house or paying for education are on the table, it is always advisable to opt for the loans specifically designed for them (about which we shall discuss in the sections that shall follow). Loans which cater to education, housing and vehicles have perks of their own, something that a personal loan shall not be able to render.

Personal loans have fixed interest rates, fixed monthly payment plans and can dramatically improve your credit score among other benefits, which make it a favourite and lucrative deal with individuals. Also, the other added perk of personal loan is that it does not demand any collateral backup like many of the different loans on the block.

Student Loans:

Sometimes all you life’s savings might not be enough to do justice to the immense potential and talent your child carries. Your daughter might make it to an Ivy League college on her own merits, but the scholarship that she gets might not be enough to sustain life overseas. This is when the concept of student loans comes into the picture. Student loans are those kinds of consumer loans that help students gather the cash required to pursue their education.

Student loans are designed in a way that a student has enough time after the completion of his/her education to pay off the loan amount. The interest rates on student loans are usually set at an amicable rate so that the student does not have to worry much about how much she/he needs to pay. However, always make sure that you do your research well before applying for the loan since different banks have different interest rates. Thorough research can help you decide on the loan that works the best for you.

Auto Loans:

Applying for an auto loan can be quite a tricky deal if you are doing it for the first time. Auto dealers have several tie-ups with banks that offer auto loans, but it is the best if you compare and contrast the loans that they have to offer before settling on one. Auto loans can be a saviour for you if you know how to manage it well and be responsible for your payments. We have all had our minds set on a dream car, at least at some point in our lives. With quick and easy auto loans at human disposal, getting behind that steering wheel is no longer a pipe dream.

Wrapping It Up:

Consumer loans help individuals live their life the way they want to, without the issue of their income being a barrier. It ensures that people do not miss out on some of life’s greatest moments or settle on their aspirations without allowing them to see the light of the day. However, it is crucial that loans are handled with utmost caution because it does not take much of a time for a situation to spiral out of control and give rise to unnecessary complications. A little bit of awareness and maturity can help one manage loans and live a fruitful life.

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