Types of Credits Available to Consumers

By: Bryan Burbank

Types of Credits Available
If you're looking for money to pay bills or to buy something, there are a myriad of loans you can take out to meet your goal. Read on to see what types of loans would work for you.

Types of Credits Available to Consumers

  • Credit Cards
    A.k.A Revolving Credit. Most of us don't think of credit cards as being a type of loan, but that's exactly what they are. You are normally given a 30 day interest free period to pay off your debt. Once the loan is due and you pay the credit card off, there's no interest charge. But if you only pay some of the bill, the credit card company will charge you a high interest rate.

    Interest rates range from 5% to 15%. 
  • Government Grants
  • Personal Loans
    A personal loan is often from another person, maybe a friend or relative. These can be the easiest loans to get because the money comes from someone who trusts us. These loans can ruin a relationship if they're not paid back in time. Best to write the personal loan out as a formal document so there won't be misunderstandings later.
  • Bank Overdrafts
    Banks sometimes allow customers to overdraw their account, so if you write a check and your account balance is zero, it still gets paid. Set up your account for bank overdraft protection. This isn't a long term loan, since you'll need to pay back often within a month, and interest charges apply.
  • Lines of Credit
    Your bank can provide a line of credit, which you only use when you need it, and for the amount you need. You're charged interest.
  • Secured and Unsecured Loans
    For a secured loan, you put up something valuable the lender can keep if you don't repay your loan. An unsecured loan has nothing backing it up if you fail to pay up.

Credit Loans
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