Are There Different Kinds Of Unsecured Loans?
In addition to many advantages and disadvantages of unsecured loans, you should also know about the various kinds of unsecured loans that are available to you.
There are personal lines of credit, which are loans that are open-ended. You can withdraw the funds you need as you need them over a specific period of time. Also, you can access the loans through a bank transfer or with a check. You are given a certain amount that you can borrow. They range anywhere from $1,000 up to $100,000. Interest only accrues when you withdraw the money and it only accrues on the amount of money that you withdraw. It only accrues until you pay back the money.
There are debt consolidation loans that can be unsecured as long as you have good credit. This type of loan allows you to combine all of your debts into one. You only have one payment instead of multiple different payments across many bills. And you may be able to get a lower interest rate with a debt consolidation loan than the high interest you pay on your other bills.
You can find loans to finance your wedding or a vacation. The interest rates may be higher on these types of loans, but they help you pay for something specific. You are able to reduce your stress by paying the money upfront for a trip or wedding and then make regular monthly payments.
You may also be able to get a loan to pay for a specific medical expense or need. Sometimes, these loans are harder to get and may have a higher interest rate. You may be able to get these loans from a medical provider or someone who only provides loans for medical purposes.