Learning about the different types of loan terms Superior Financial Services offers could help you make the right decision to finance a new car or home improvement project. Here are six common loan terms and what they mean:
1. Secured Loans
These kinds of loans require you to provide some form of collateral for your loan to be approved. Lenders typically request collateral for large loans that are used to purchase assets like vehicles or homes. What’s used as collateral can vary—for a car loan, for instance, it is the car itself. You could also need to present collateral in case you have a low credit score. The fact that you have provided collateral means that you are at a lower risk of default, which is why secured loans tend to have a lower interest rate than unsecured loans.
2. Unsecured Loans
Unlike secured loans, these types of loans don’t require collateral. A successful application for such a loan is contingent on the applicant’s creditworthiness, which can be determined through their credit score. You might only qualify for some specific unsecured loans if you have a high credit score.
3. Signature Loans
A signature loan is a form of an unsecured personal loan. You can apply for it by simply providing the lender with your signature, credit history, and documents that showcase your income. If you have a good credit score and an income that is healthy enough to support repayment, it can be easy to get approved for this loan. However, since there isn’t any collateral involved, the loan amount tends to be smaller than most secured loans.
4. Installment Loans
With installment loans, you get to borrow a specific amount of money and repay it in phases or a series of regular payments. Most of these loans will require you to make payments monthly. Some of the best examples of these types of loans include student loans, mortgages, and auto loans.
5. Short-term Loans
Short-term loans are unsecured loans you can borrow and pay back within one year. The repayment period typically varies from a few weeks to a whole year. In most cases, getting approved for short-term loans will depend on your credit score, though this can vary with regard to the loan type and vendor.
6. Long-term Loans
Long-term loans are loans whose repayment tends to stretch over several years, mostly more than three years. Some long-term loans, like mortgages, can mature in more than 30 years. At Superior Financial Services, we offer 72-month long-term loans.
You can find all these types of loan terms at Superior Financial Services. From personal loans to recreational loans, if you are in need of financial assistance, apply now. We typically make decisions the same day, which will allow you to get your loan completed quickly.