Choose the Right Consumer Credit or Loan

Whether you need some extra money for something essential or just to help you over a rough patch, getting clued up on the different kinds of consumer credit and loans available is a great idea. Even if you are doing okay right now, brushing up on your general knowledge of what's on offer may come in handy in the future since you'll know exactly what you need.

It's a good idea to funnel any extra money you have coming in towards your loan repayment if you can, so budget carefully every month to see where you can save. Maybe you received a bonus from work, a tax refund, or got lucky playing a slots game at one of the great online pokies has to offer? Use it wisely!

Cash Advances
You take a cash advance against your credit card. Instead of using your credit card to buy what you need or pay for a service, you'd bring it your bank or take it to an ATM and get the cash you need. You may also be able to write a cheque to payday lenders for a cash advance.

Debt Consolidation Loans
These loans are meant to simplify your finances. They can be used to pay off all, or several, of your debts, particularly credit card debt, lowering interest rates and allowing for smaller monthly payments. These usually take the form of second mortgages or personal loans, and although there are many myths about them, they can be your best option if you are heavily indebted.

Mortgages
These get distributed by banks and allow you to purchase a home when you can't pay the full amount upfront. It's tied to your house, however, so you'll risk foreclosure if you fail to meet your payments. They have the lowest interest rates of all the consumer credit options.

Payday Loans
Payday loans are short-term offers that carry high interest rates but can be perfect for when you need to bridge the gap in an emergency. Try not to overuse this option because it carries very high costs, but it's good to know that it's there if you ever need one.

Personal Loans
This is a great idea for a personal expense with no designated purpose. You could use it to pay your outstanding debt, like your credit card, and reduce your interest rates in this way by transferring the balance. Whether or not you'll be able to get one will depend on your credit history.

Small Business Loans
This type of consumer credit is given to entrepreneurs and aspiring enterprisers to help them either start a business or expand one. You will need to be prepared when it comes to applying for this loan, so make sure you've got a business plan ready that outlines your goals clearly.

Student Loans
Student loans are available to scholars and their families to help cover study costs. There are two main types, federal and private, but it's generally better to go for the federally funded option. They usually have lower interest rates and their repayment terms are easier.