Loans have become quite common in the US. The rise in costs and expenses have burdened people. While saving money is encouraged and many do tend to do it, most have trouble saving a good amount of money. This means that they are often out of money when unexpected expenses arise. These could include car repair, relocation, home improvement, etc. To meet such expenses, people take out personal loans. On the other hand, many take out mortgages so they can either buy their first home or a better one.
No matter what kind of loan you are seeking, you obviously need a lender in the US. Over the years, varying types of lenders have established, which has been convenient for the borrowers. In the following post, we discuss the various types of lenders available in the US:
When it comes to reliability and authenticity, banks are the lenders you need. Being the primary money institutions, they offer a variety of loan offers including personal loans and mortgages. They are reputable but are also known for strict rules and regulations. The approval processes can be long and complicated too. Perhaps, this is the reason why many seek alternative lender options.
Loan brokers are good options when you don’t want to put in the effort of finding a lender on your own. You can apply to the broker with the type of loan you seek; your situation and requirement. The broker then finds you a lender that is most suitable.
Secondary Market Lenders
These lenders facilitate loans nationwide ensuring that money can move around easily from state to state. Examples of secondary market lenders include Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Government National Mortgage Association.
When you want quick loans or fast approval despite having a poor credit history, then direct lenders are the best options. These typically work online; the entire approval process is completed online and there are no third-parties involved. Once the borrower has an approval, the funds are directly transferred to their provided account. Online loans are preferred for their convenience by many in the US.
Credit unions are local loan providers. They can act as mortgage and portfolio lenders but are more typically found in the role of correspondents to larger institutions. Many people who suffer from bad credit are advised to consult their nearest credit union to take out a loan and timely pay it back to improve the score.
Banks and other large institutions have their own loans and can approve or reject applications according to self-created policies. These loans are not available on the secondary market. When the loans are being paid back by the borrowers for a period of time, they become ready for sale on the secondary market. Portfolio lenders may decide to sell the loan so they can use the money to fund other loans.
Loans can be borrowed from one of these lenders depending on what kind of loan is required and the situation of the borrowers.