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5 Types Of Loans To Help You Get Ahead

Whenever one finds themselves in a financial conundrum, one viable way out is by searching for a loan. Currently, there are numerous loans on offer in various financial institutions. Below are some guidelines on common loans.

Tax Refund Anticipation Loan

A Refund Anticipation Loan (RAL) is a type of loan that allows you to take an advance on your anticipated federal income tax refund. You are essentially borrowing against the amount you think you'll get back when you do file your tax return. You can use a program like TurboTax to accurately figure out your refund and file your taxes, then use a RAL to get the refund amount now, rather than having to wait several weeks for your tax return to be accepted and processed.

Bridging Loan

Just as the name suggests, bridging loans are issued for the sole purpose of literally bridging the gap between the amounts of cash required to complete a new property prior to selling your current property. Such loans are arranged in situations whereby one needs to buy new property but is unable to come up with the mortgage. The most common reason is failure to sell off your existing property in good time. Consequently, bridging loans are short-term in nature. Though very convenient in nature, such loans have very high interest rates.

Bad Credit Personal Loan

This loan is specifically designed to serve anyone with a bad credit rating. In most cases, bad credit rating haunts individuals in that they deny them proper access to financial services. A bad credit personal loan is meant to aid such individuals get back to financial normality. If you own a home and have equity in the house, you can get a loan against the home. In other words, the house can act as security for the loan. The basic limit for such a loan is 125% of the home's value.

Debt Consolidation Loan

A debt consolidation loan allows you to bring together all of your other loans, and consolidate them into one. This way, it will be easier for one to manage the payment process. As a matter of fact, the interest rates are lower compared to the previous loans. Such a loan will clear all credit card repayments, hire purchase and all sorts of loans, leaving you with one loan.

Payday Loan

Also referred to as cash loans, payday loans are aimed at helping individuals that are in need of immediate cash. These loans are always a small amount and are strictly given to salaried individuals. Amounts issued as payday loans are to be paid on or before the next payday, which is most a month from the date of issue.

Other popular kinds of loans include secured loans, unsecured loans, home loans, car loans, personal loans, home improvement loans, home owner loans and remortgage loans.

All in all, the best cure is always prevention. Avoiding loans is the most prudent way to go about your finances. Stick to your budget the best way possible and always keep your tax records in good condition. Research the various TurboTax versions, choose one that best fits you and always be a step ahead of tax deadlines. At the end of the day, you will be less likely to seek for too many loans.

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