If you are looking for a quick answer to this question, then it’s No. Continue reading and get to know both loan terms. A consumer loan is a broad term that covers four different kinds of loans, such as personal loans, auto loans, home loans, and student loans. A personal loan is a type of consumer loan. Check the consumer loans guide to understand better such a loan and how it can benefit you.
What is a Consumer Loan?
It is a loan either secured or unsecured that a person to finance specific types of expenses. The most common loan types are mortgage, auto loans, student loans, and personal loans. Let’s explore more about each category of loan one by one.
Mortgage – Many of you already know about this term as you take a loan to buy a home. Many people buy houses by paying the full amount in cash, while others rely on mortgage lenders. This secure loan lets you borrow money up to $400,000 for conforming loans and above $400,000 for jumbo loans. The term length of a mortgage is 15 to 30 years.
Student Loans – When you borrow money to pay your study fee and expenses, it’s known as a student loan. You can get this loan from private lenders and the government. This type of loan allows you to borrow money up to $12,500 annually for federal undergrad loans. However, you can borrow more or less from a private lender.
Auto Loan – You can borrow money to buy a new or used car. In this secured loan type, you can expect to borrow up to $100,000 that you need to pay back within two to seven years.
What is Personal Loan?
A personal loan is a money you borrow for a particular expense. It’s a versatile kind of loan which is either secured or unsecured. When you put something as collateral, you can borrow more than $250,000. However, an unsecured personal loan lets you borrow $25,000 to $50,000.
Why You need to Get a Personal Loan?
Unlike mortgage and auto loans, which are specific kinds of loans, a personal loan is less specific. You can apply for it when you need cash for any significant expense in your life. The term of this loan is usually under ten years. Commonly, people get this loan to consolidate their credit card loans. As credit card advances have a high-interest rate, therefore you lock into a non-ending debt cycle. The only way to get out of it is to apply for a personal loan and pay back all your pending loan amount. As a personal loan comes with a low-interest rate, you use it to pay back a high-interest loan, and it’s how you manage your finance in the best manner.Know everything about personal loans.
Should I go for Online Consumer Loans?
These days, you don’t need to go through a traditional lending process as a super-convenient online lending option is there. You can arrange funds quickly and in a stress-free manner through it. Make sure you read the complete guide on getting consumer loans online, so you won’t end up making a deal with scammers. You will get an idea about types of loans and how you can get them quickly.