INFOGRAPHIC: Which Type of Personal Loan Should You Get?

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Running low on cash? Dream of buying a car, owning a house, or starting a business, but don’t have enough cash in your deposit account? You may not realise it, but you have plenty of perfectly legal options you can turn to for emergency funding or financing your life goals.

Perhaps you need the money to cover hospital bills, or pay for your child’s tuition, or fund your dream beach wedding. Whatever you need money for, chances are that your local bank will have a financial product that fits the bill.

Now comes the tricky question: What should you get? Should you go for an instalment loan? Or should you pick a revolving line of credit, like a credit card? Do you need a large sum of money you can use for anything? Or do your have a specific goal in mind?

Signing up for any kind of financial service isn’t as simple as going for the cheapest prices or the most tempting welcome offers. What you intend to use the product for will play a huge role in your decision. The process of taking out a bank loan, for example, can vary depending on whether you are using the money for commercial or personal use.

Choosing the wrong product can have disastrous effects on your personal finances. Since there are no one-size-fits-all solutions, you need to get a good grasp of your financial situation and spending behaviors before you commit to any type of loan. A product that’s ideal for funding home repairs may not be as effective for funding your family vacation to Europe.

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