If you are seeking a perfect answer to this question, you have come to the wrong place. That is because there is no such thing. It is all a contextual game and what is suitable for Jake is unsuitable for his brother Jack (just saying by way of example). Every situation has its action plan that in turn, is dependent upon the individual borrower and lender.
In the capacity of rational consumers, we all want to make the best bargain. Consumer durables from flashy cars to washing machines that turn out the cleanest clothes are in high demand these days. Nobody wants to be left behind in a game of economics where the stakes are high. The thing to be careful about is thinking twice before putting your signature on the piece of paper. You don’t want to be handed a raw deal.
Whether you want to borrow a loan on a house, car, scooter or motorbike, the strategy you will adopt needs forethought. It requires an intelligent and wise mind that can read the fine print. The loan types at your disposal are quite a few. We start with the basic ones, and they are the unsecured and secured loans. The former has monthly payments, and there is the absence of collateral. The loan can range from a grand to fifty grand depending on your credit score. The interest rate varies from the single to the double digits in this case. The second one comprises of instalments, and unfortunately, there is collateral. You may lose your car or home if you give it up as collateral. However, you may keep the car or scooter you are making repayments on as collateral.
If an extended family is buying a mansion or villa, they may prefer a cosigned loan. Here a partner or partners sign the dotted line alongside you (the borrower). That way, many people share the process of default payment in case one member fails to make a payment on time. There is thus a safety net. If you are buying an expensive home, a debt consolidation loan may be apt too. Several accumulated debts are paid off in the form of one monthly reimbursement.
Your credit card is undoubtedly, and an option since this involves an individual route of smart money. A lump sum repayment in 30-day instalments is the optimal choice here. Your credit score and past timeline need to be adequate for this line of action. Moving on, there are static rate loans and dynamic rate loans. The former have rigid payments spread evenly over the twelve months of the year. The latter have ups and downs in rate payments. A few other loans are paycheque loans, money on advance loans and pawnbroker loans. The first one is paid on the second day the salary arrives in the borrower’s bank account. The second type is all about an established bank or automated teller machine. As for the last one, you deposit a piece of property with a pawnshop owner. If you fail to repay the debt, you lose the property and otherwise go scot-free.
So, there you have it. If the car you buy is too expensive, a loan which is meant for an average home may be more suitable for it. Conversely, if the home is a cottage, a fancy car’s loan may be just the thing for this small house. It all depends on the sort of scenario you find yourself in. Do your math work, and when you feel sure of yourself, go ahead and make the desired deal.