When it comes to getting a loan there are a few things you should know. Here are the basics details about the most common loans; Mortgage, auto, personal and payday loans.
For understanding loans, there may be some terms that need to be covered. Lets start with APR. APR stands for annual percentage rate and shows you the cost of borrowing on a yearly basis.
Mortgages– Mortgages or home loans normally have an average APR that ranges between 3-4.5%. The APR depends on your credit score, the amount of the down payment as well as the length of the term. Mortgages are typically 15-30 years long.
Auto loans– The average APR for a car loan is typically 2.49-5% depending on your credit score, length of term as well as down payment. Car loans typically go from 5-8 years. If you are getting a loan from a bank, a down payment of 10% is usually required.
Personal Loans– Personal loans can be used for car repairs, consolidating debt, helping family, or any other unexpected expenses. The amount of personal loans can range from $100-$10,000, depending on the lender. The qualifications for these types of loans also depends on the lender. If you are looking to get a personal loan from a bank, credit score and income will be taken into account. If your credit score isn’t up to par with banks standards there are other lenders, including us at Lift Credit, where you can get a personal installment loan.
Payday loans– These loans are designed to be very short term. Typically, they are set up for two weeks to a month, but the average APR is very high. Last year the average APR in Utah was 473%. Another disadvantage of payday loaning is that the entire loan and interest is due on the due date.
There are many more other loans and information that can be found for lending. Be sure to do your research and understand the terms for every loan you get!