How To Determine the Best Type of Loan For You

At some point in life, a typical person encounters a situation where he or she needs to borrow money. In some cases, the need for money is short-term and a relatively small loan can bridge the gap between paychecks. In other cases, the need to borrow money is for larger amounts or a longer duration. Your situation will determine which type of institution to contact.

Paayday Loans

Some financial service companies specialize in short-term payday loans. If searching check advance Mississippi, you would find many such companies. These companies are specific to short term money needs. They can often provide cash quickly and without traditional loan credit checks. The requirements vary based on the company, but they typically need proof of your income. Otherwise, there are usually identification requirements but not much other needed documentation.

Title Loans

Several of the short-term loan financial service companies offer an alternative to the typical payday loan by providing title loans. These are generally used when a person needs more money than can be repaid by one paycheck. If borrowing in this situation, you would bring in the title to your car. The title would be kept by the company until the loan is repaid. Companies also usually require a car inspection prior to issuing the loan.

Long-Term Loans

Other types of long-term loans for larger amounts are typically funded by banks or credit unions. In addition to the loan duration, a major difference between this and a payday loan is the amount of time it takes to receive funding. Traditional banks have longer application periods with more required documentation. The Consumer Financial Protection Bureau states that there are six pieces of information required before receiving a loan estimate from a bank. The bank will then check a person’s credit history, all other debt obligations, and income.

Different situations require different types of loans. Be sure to research any financial institution before contacting them for a loan. Payday or title loans are effective when the money can be repaid quickly, while banks can be helpful when larger amounts or longer-term loans are needed.