Everyone runs into financial hardships from time to time, and if you don’t have money saved up or the credit to cover your expenses, you may find yourself in need of a loan. Whether you’re dealing with a job loss, medical expenses, car repairs, or another financial emergency, there are plenty of loan options available.
1. Loans Through a Bank or Credit Union
Most people think of the bank first when they’re considering where to go for a loan. Both banks and credit unions issue personal loans, but whether you qualify and the interest rate you get depends quite a bit on your credit score. Although you can apply for a loan at any bank or credit union, you’re more likely to get approved if you go to one where you’re already a member, as you’ve established a history with them.
If you’re looking for a bank in Chicago, the Federal Reserve Bank of Chicago, the BMO Harris Bank, and the MB Financial Bank are among its largest. All the large national banks have locations in Chicago. Credit unions in Chicago include United Credit Union, U.S. Employees Credit Union, and First Financial Credit Union. If you belong to the group that a credit union represents, you may have better luck with your loan application there.
2. Home Equity Loans
It’s easier to get a secured loan than an unsecured loan, so if you have equity in your home, a home equity loan is a good option. Since you’re using your home as collateral for the loan, you can also obtain a lower interest rate than you would with other types of personal loans. Of course, this also means your home is on the line, so make sure that you don’t miss any payments.
In many ways, a home equity loan is like taking out another mortgage on your house, and this is one personal loan option that you can repay over the long term. If you’d prefer, you can open a home equity line of credit, which functions similarly to a credit card – you have a credit limit, and you’re able to spend up to that limit. You pay the credit line back with your monthly payments.
If you’re going to take out a home equity loan, start by checking with the bank that issued your mortgage. However, keep in mind that there are a wide range of home equity loan services available, so you can also shop around to look for the best deal.
3. Title Loans
If you don’t have home equity and you’re having trouble finding a lender who will approve your loan application, then you may want to consider a title loan. These loans use your car as collateral, which means your car needs to be paid off in full. The amount you can obtain through one of these loans is dependent on the value of your car, and lenders usually will loan you about 50 percent of the vehicle’s trade-in value.
Title loans are a popular option because of how easy they are to get and their speed. All you have to do is go to the lender, let them inspect your vehicle, and provide them with your car title. Chicago has lenders available all over, including Chicago Title Loans, AAA1 Auto Title Loans, and Online Car Title Loans.
Once you get your loan, the repayment period begins. The amount of time varies depending on the loan, but a standard time period is 30 days, so these are short-term loans. If you aren’t able to repay the loan within the repayment period, the loan is rolled over and renews with higher fees and interest charges.
The easy approval process of title loans comes at a price, which in this case is the interest and fees you have to pay. Title loans are typically more expensive than most other loan options to begin with, and if you can’t pay yours back within that repayment period, rolling it over is going to be very costly.
A big part of choosing a loan is finding a willing lender who will approve your application. If you’re able to draw on your home equity, or you have a high credit score, then home equity loans or personal loans through banks are likely to be your best options. That’s especially true if you’re looking for a long-term loan. If you need quick cash and don’t have the best credit, title loans are a good short-term solution, provided you pay yours back in time.