In 2021, global debt reached a record high of $226 trillion.
The media loves to spread doom and gloom about debt and all the problems it causes. But on a personal level, debt can be a good thing.
Debt can enable you to invest in property. Over time, that good debt allows you to grow your wealth.
Debt can also be a quick solution to a seemingly insurmountable problem. Sudden unexpected vehicle or healthcare bills can be paid by going into debt, which you pay off at your own pace.
The question is: which is the best loan lender?
That depends on how much you want to loan, for how long, and how quickly. In this brief guide, we’ll go over your options for taking out a loan. And we’ll explain the pros and cons of each lender, so you can find the best option for you.
Financial Institutions
When most people think of taking out a loan, the financial industry comes to mind. Despite the awful reputation banks earned in the ’07-08 financial crash, they’re still the go-to lender for many. Here are two financial institutions you can approach for a loan.
Banks
Banks are likely the most popular lender for large, long-term loans.
What people like about bank loans is the feeling of stability. The in-depth research on the bank’s part reassures people that they’re taking out a loan they can afford. And the complex paperwork helps people feel secure.
The catch is, as secure and managed as these huge bank loans feel, they’re still subject to change. Most mortgages, for example, have variable interest rates. It’s not possible to predict exactly what your loan will look like in 10 years’ time.
Their thorough nature also requires work on your part. If you want to take out a loan, you have to present detailed financial plans and statements. This can take months of preparation.
This culminates in the final point: a banking institution loan is slow. From the paperwork to the consultation and evaluations, no bank loan is speedy. That means they can’t be used to save the day in an emergency.
That being said, there are few other ways to loan such large amounts of money. Banks can choose to lend millions of dollars if they believe you are able to pay it back. No wonder approval takes so long!
Credit Unions
Depending on who you ask, credit unions are sometimes viewed as more reliable than banks. They are non-profit organizations focused on the greater good of sharing wealth. For that reason, their interest rates are often lower and more stable than banks.
Though they still take some work!
First of all, you have to become a member. There are various ways of doing so, such as through your employer or a community organization. Unless you are a member already, a credit union can’t help you with an unexpected expense.
But if you can prepare in advance, this is a viable option for small and large loans.
Loan Sharks
What about when a bank or credit union is going to take too long or requires too much financial evidence? Many people turn to the opposite end of the spectrum.
These are loan sharks. They prey on people in desperate situations. Their deals include extortionate interest rates, variable payment dates, and other shady practices.
Sadly, these loanees usually feel like they don’t have a choice. If they don’t have the credit score or financial history to support a legitimate loan, they think it’s the only way.
But that’s not true!
There is a third option that is just as fast as this, but safe too. These are the emerging companies called online lenders.
Verified Online Lenders
Online lenders exist to fill a niche in the market that loan sharks were exploiting. They offer short-term loans that pay out almost instantaneously. But they’re a legitimate business that is safe to use.
For example, imagine you received an unexpected vet bill for your pet. On a bad day, that could be thousands of dollars. You want to help your furry friend, but simply don’t have the cash.
Banks take too long, and may not even consider a loan so small. Loan sharks on the other hand cannot be trusted, and only lead to more problems down the line.
That’s where online lenders come in.
Many lenders will send up to $15,000 at a time, within the day. In fact, some are as fast as 15 minutes!
You can do the whole application process online – check it out! That means you can apply for the loan on your phone, not even having to leave the vet’s office to receive your payout.
Despite their incredible ease and speed, online lenders are safe to use. They clearly state their interest rates and expected payment dates.
Therefore, when you apply for a loan, you know exactly what type of debt you are signing up for. You can decide on the spot whether you can afford it, without having to wait months for a bank to sign off on it.
Stay Up to Date With the Best Loan Lender Advice
The best loan lender for you totally depends on your situation.
If you can prepare for the loan in advance, banks and credit unions are both popular options. They allow you to borrow large amounts of money for long-term investments.
But to cope with unexpected expenses, online lenders are faster and simpler. They need very little information and are the most convenient way to loan a few thousand in an emergency.
As always though, the world will keep changing! Stay up to date with our articles to hear about the latest developments in the best personal loans.
