Human needs are insatiable but unfortunately, resources are limited. This is the major reason why there are institutions that are vested with the responsibility to legally bridge the gap between these needs and the resources needed to meet them.
One of the ways through which people get money to fund some of the expenditures that their incomes cannot carry is by taking out loans. Loans are financial products put out by banks and other financial institutions through which people can fund living expenses or projects.
One of the most common categories of these financial products is consumer loans. In this article, we will look at consumer loans in general with a focus on loan for Jet Ski or billige forbrukslån – vannscooterlån in Norwegian and how to access the cheapest ones available.
Understanding Consumer Loans
Consumer loans as we have mentioned are financial products that are offered by banks and financial institution that enable consumers to take care of expenses that their income cannot cater for. There are different types of this kind of financial product. Each type has its purpose and terms and conditions.
Let’s briefly discuss the different types of Consumer loans and their purposes.
Types of Consumer Loans
These financial tools are delineated mainly by the purpose for which they are approved. They can either be secured or unsecured. The secured ones are the ones that are backed by collateral. Collateral is an asset of equal or higher value than the sum approved which is put down as security for a loan.
Unsecured loans on the other hand are those that are not backed by collateral. These classes of credit portend more risk for the lender and that is why they most often come with higher interest than secured loans.
Below are some of the types of consumer loans and their purposes:-
Personal Loans
These are credit facilities given to individuals and they fall under the unsecured categories because they are not backed by collateral. This type of loan can be used for any purpose the borrower deems fit. From funding a dream wedding or exotic vacation to paying for home décor and furnishings; all fall under the purpose for which this credit can be used.
Mortgage
This is a credit facility that is given specifically for the purchase of real estate. It can be used only for the building or purchase of a home or real estate or renovation of the same. These credit facilities have repayment duration of between 15 to 30 years.
The interest rate depends on a number of factors which include the amount, down payment, market forces and the lender involved. Mortgages are secured loans which mean that they are usually backed by collaterals. The asset that serves as collateral is most often the property in question. This therefore means that in the event that the borrower defaults on the loan, the property will be repossessed to recover the debt.
Auto Loan
Just as the name implies, this credit is advanced for the purchase of an automobile. Some lenders will extend this facility for the purchase of any type of vehicle while others have specific types of automobile that they sponsor.
These credits come with repayment durations of up to 7 years depending on the lender and their terms and conditions. This is a secured loan and the asset that serves as collateral is usually the vehicle purchased. What this therefore means in essence is that in the event of a default in repayment, the vehicle will be repossessed.
The above are the most popular types of consumer loans but they are not the only types. Other types include students and medical loans and credit cards.
How to Access Cheap Consumer Loan for a Jet Ski
Jet Ski can be classified as a luxury item and most often do not have provision made for it in regular loan categories. There are financial institutions that have specialized products for this type of items and they are under the category of sports, leisure or specialty vehicles.
There are many way of financing this personal water craft and they include manufacturer financing, credit card or personal watercraft loan. Each of these methods has their advantages and disadvantages. However, the way to get the best out of whatever financing method you choose is to look out for the cheapest.
We will therefore briefly examine how to access loans for this item and how to get the cheapest ones available.
Check the Annual Percentage Rate (APR)
When you decide to take out a loan from a financial institution under their specialized loan categories, you can expect that the interest rate will most likely be higher than that of manufacturer financing. However, it will be lower than that of a personal loan; remember that a personal loan can be used for any purpose.
When comparing the rates of different financing options, bear in mind that the rate that a manufacturer will offer can increase with time. Therefore, it is important that you find out the total interest you will pay over the repayment period of the credit. This will help you determine which option is the cheapest.
Ensure that your Credit History is Solid
A borrower’s credit history consists of their credit score and history of financial transactions. This includes how they handle credit and repayments. So borrowers who have solid credit histories often stand greater chance of getting favourable loan terms and conditions.
If you have a solid credit history, you will be able to access personal loans for the purchase of your Jet Ski. This will in turn help you get credit facility with cheap rates.
Additionally, bear in mind that financing a Jet Ski is not the same as auto loans so you have to pay extra attention to the tiniest details of any loan offer. If possible, you can look out for professionals who know how to broker such deals.
Conclusion
Everyone has that one thing that gives them great pleasure and affords them quality leisure time. A Jet Ski is one luxury item that makes summer expedition memorable. Although you can use your credit card to finance the purchase of this personal watercraft, it is not advisable to do so.
We have therefore shared some tips that can help you get the cheapest financing option available. Bear them in mind so that you can make an informed decision when the need arises.
