The two main types of consumer loans are personal and business. Personal consumer loans can be very handy when it comes to debt consolidation. These types of loans disburse funds directly to a lender, usually in one lump sum and then paid back over the course of what typically are monthly repayments. The most popular consumer personal loan products are personal loans, mortgages, auto loans, student loans and home equity loans. Business consumer loans can also be very useful when it comes to debt consolidation. These types of loans can either be secured or unsecured.
Secured consumer loans are made against an asset, such as a home or car. In order to receive a secured loan, the borrower must already own the asset that the lender is going to use as collateral. The major advantage to securing an unsecured loan for a consumer is that there is generally a lower interest rate than with secured loans. However, unsecured loans generally have shorter repayment periods because the borrower does not need to provide collateral to the lender in order to obtain the money. The advantage to unsecured loans is that there is usually no credit check and there are generally no prepayment penalties involved.
Private consumer loans are generally easier to obtain and qualify for than federal loans because they do not require a credit check or any sort of collateral. In many cases, these types of loan products can also be more flexible, especially for people with bad credit. For private loans, the most important thing to do is to shop around among lenders in order to find the best interest rates. People can also take the help of various debt relief companies to find the best deal on their own. No matter what your financial situation is, you should be able to find a suitable loan with the right interest rates and terms.