A loan can be defined as property, money, or other material commodities that is offered to another person/business in exchange for repayment of the principal loan amount along with fees, interest, and other charges in the future. A loan can be for a one-time, definite amount or it may be provided as an undefined line of credit limited to a ceiling/specified amount.
Loans can be used for many different purposes. Easy loans are most popular among consumers. Presented below are some of the easy loans along with their features and their value in meeting the financial needs of consumers.
- Credit Cards Credit cards come with a line of credit and when consumers use them they are using that line of credit. Thus, it quintessentially means that consumers are taking out a loan on the card. Credit cards are widely accepted by all merchants and at different places and they can be used for virtually any purpose, from buying a drink at a pub to paying tuition for college. Hence, they are a very attractive source of easy loans for consumers as well as companies. Most credit cards come with a line of credit worth between $5,000 and $10,000. The process of reviewing the application is simple and there is quick approval. Credit cards usually get approved in 7 to 14 days. Credit card easy loans have a few cons. Most credit card providers charge an annual interest rate of nearly 25 percent. Additionally, since we are psychologically bent towards charging on card instead of using cash to pay for items, we may end up racking a huge debt on credit cards.
- Personal Loans Personal loans are offered by banks and varied financial institutions. This kind of easy loan can also be used for any purpose and the lenders do not impose any restrictions on the usage of the loan. Personal loans are unsecured and can amount from $300 to around $5,000. The lenders usually verify varied assets and/or income sources of the burrower before they approve the loan. Personal loans are usually approved in a few days. Personal loans also have a high-interest rate of around 10 percent. Also, such loans have to be repaid within two years, thereby making it an impractical choice for people looking for long-term easy loans.
- Home-Equity Loans A home equity loan is an easy loan that a homeowner takes out against the worth of her/his house. The loan can be used for varied purposes, but are generally used for debt consolidation or construction of additions to the house. The interest rates on these loans are reasonable and they come with terms ranging between 15 and 20 years. The interest on such loans is typically tax-deductible. It is a good option for individuals who want to borrow a large sum of money that has to be repaid over several years.
Home equity loans come with the downside that homeowners can excessively mortgage their residences and face difficulties in repayments. It is especially harmful in homes where only one family member is the breadwinner. Thus, if that member dies or becomes disabled, then foreclosure is imminent.