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How to Tell Which Loan is Best For You

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How to Tell Which Loan is Best For You

Determining what type of loan you need and how much you need can be a complicated process if you don’t know all the details yet. However, there are a few ways you can predict what loan would be best, what rate to look for, and what amount you should think about taking out.

What Loan is Best?

There are hundreds of types of loans (far too many to go into in one blog.) However, there are a few basics that answer most people’s questions when deciding which type of loan is best for their circumstances.

Mortgage Loans

These loans are large loans taken out over homes, vacation homes, or other properties. They often have a low-interest rate and can span an upwards of 30 years. They can only be obtained with a decent credit score and significant downpayment.
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Automotive Loans

Much like a mortgage, an automotive loan is something that you take out when buying a car, truck, or another automobile. They usually span from three to five years. In addition, they can have varying interest rates depending on credit, downpayment, and total loan size.

Personal Loan

A personal loan is a loan for money that doesn’t fall into a regular category. Usually, this type of loan is taken out for things like a new playground for a child, a hot tub, or even a tiny home build. In short, large gifts and purchases.
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Payday Loan

A payday loan is a small loan usually taken out when an emergency comes up. Things like a brokedown car, emergency bill, sickness, or other unexpected costs. It’s almost like getting your paycheck earlier. However, it comes with interest as any other loan.

What Rate is Best?

In general, the lower the rate, the better for you. However, what interest rate you can obtain depends mainly on the type of loan, lending institution, and your personal history (credit included.) In addition, each type of loan will have average ranges. For example, a payday loan with a 10% interest rate would be very high for a mortgage but not so bad for a payday loan.

How Much Do I Need?

Many people think taking out as much money as possible is the best option. However, this could not be further from the truth. When you take out a loan, you should take out just what you need, nothing more. This is especially true if you have lower credit or financial issues.

Think about what exatly you need the loan for. If you need a small loan to pay for an engine repair, then get a quote from the mechanic and get a loan for just that amount. If you need a home, think about what you can comfortably afford and go from there.

iCASH Can Help

iCASH offers small loans for all types of needs and lower than standard interest rates with a fast approval process. Whether you need a small payday loan or a small personal loan, we can help. All you need to do is enter your information online, get approved, sign a contract, and money will be on the way - all in less than one hour!

Ramona Glanville

Ramona has been a regular contributor to some of Canada's top wealth-management editorials for over 30 years. She strongly believes in good saving habits, reducing financial clutter, and red wine.