There are two main types of personal loans, secured and unsecured. Most personal loans average from one to five years in term. Some can be as short as 30 days or up to 10 years. Before you look for a loan, identify your needs and your abilities.
Secured loans, as the name implies, involves putting up collateral to secure the loan. The type of collateral depends on the loan and the lending institution. Common secured loans are mobile/manufactured homes, RVs, boats, negotiable security (such as stocks or bonds), and other miscellaneous loans, which often uses your purchase as collateral. Secured loans offer a lower interest rate in comparison to unsecured loans.
Unsecured loans are a higher risk for the lending institution because, should you default, they would have to undergo a lengthy legal process to try to gain compensation. The terms of approval on these types of loans are more dependent on your credit report. There is a greater chance of being denied if your credit has blemishes.
Other personal loans fall within the two above categories. These include military loans, payday loans, fast cash loans, debt consolidation, line of credit, etc. These specific loans can be secured or unsecured depending on the terms of agreement.