Types of Consumer Credit & Loans In Florida

In this article, we will discuss the different types of consumer credit loans in Florida, we will let you know what you can expect from each type of consumer loan.

Banks, credit unions, private finance companies, and online lenders are the top providers of consumer credit and loans in Florida. Consumer loans and credit make it possible to get the financing to purchase high-priced items that you need to finance.

Student loans, Mortgages, and credit cards are forms of loans and credit, some are simple and some are more complicated for individuals to get.

All types of loans, no matter what type of loan it is, will have their own terms and conditions, and all consumer loans are regulated by the CFPB.

The CFPB protects consumers from unsavory practices, like charging excessive interest. all of the plan details, such as length, and default terms, need to be clearly disclosed to avoid any confusion and potential legal action.

All of the disclosures need to be clearly disclosed so, in the case of default, terms of collection, or the outstanding debt, all of the costs need to be disclosed.

Secured and Unsecured Consumer Loans In Florida

There are two types of consumer loans in Florida, secured, and unsecured, different lenders will offer either one, depending on the risk level they are willing to take.

A secured loan is when collateral is pledged to secure the loan in case of default. If the borrower defaults on the loan, they may lose the collateral that they have pledged.

With secured loans, lenders will typically offer lower interest rates, as they have the security of the collateral if the borrower defaults on their loan.

Unsecured loans have no collateral to secure them. The lender will have nothing to repossess if the borrower defaults on the loan. As the loan is riskier, the lender will charge a higher interest rate.

Information on consumer finance loans in Florida

Types of Credit Options in Florida

There are open-ended and closed-ended consumer loans in Florida. Open-ended or revolving credits are usually used for purchasing and are paid back monthly.

The most common form of revolving credit is credit cards, but home equity lines of credit (HELOCs) also fall in this category, they can both be paid off monthly but they do not have to, but higher interest costs will incur if is not fully repaid monthly.

With credit cards, interest charges are incurred when the monthly balance is not paid in full every month. interest rates on credit cards can vary from 16% and can be as high as 30%.

Closed-ended consumer loans in Florida, are also called installment loans, because the consumer is required to follow a regular monthly payment plan, with interest and principal being paid every month.

The interest rates that are charged, are tied to the client’s credit score, the better the credit score, the lower the interest, and people with bad credit should expect to pay higher rates.

Types of Loans In Florida

Florida consumers can get a loan for just about anything they want to purchase, which tells you approximately how many consumer loan types there are available.

Here is a list of some of the most popular consumer loans in Florida:

• Debt consolidation
• Student
• Mortgages
• Auto
• Veterans
• Title Loans
• Small business
• Payday
• Cash advances
• Home equity

Each type of consumer loan in Florida is designed for different things, it is not one size fits all, so do your homework to find out what would be the best consumer loan for you in Florida.

Debt Consolidation Loans in Florida

A debt consolidation loan in Florida is to help you to simplify your finances by combining multiple loans that you have into a single debt, repaid with one monthly payment. This means fewer payments each month and lowers interest rates.

Consolidation loans are also called unsecured personal loans.

Personal Loans In Florida

Personal loans can be used for anything you want, they can be unsecured or secured, and they are usually used for people with high credit card debt.

With personal loans in Florida, you can transfer your outstanding balances from other loans and credit cards, to have a lower interest rate and only one payment.

Here is a look at some facts you should know about personal loans:

• Common personal loan term: 12-60 months
• APR interest range: 6% to 36%
• Minimum loan: $1,000-$3,000, based on the lender
• Maximum loan: $25,000-$100,000 based on lender
• Required credit score: Above 660, but some lenders allow it as low as 610
• Collateral requirements: Required for a secured loan; not required for an unsecured loan

Auto Loans In Florida

Auto loans are secured loans tied to the equity in your vehicle. They can help you afford to buy a vehicle, but you may lose the car if you miss your monthly payments.

This auto loan in Florida may be distributed by a bank, credit union, online lender, or car dealership but you should understand that while loans from the dealership may be more convenient, they often have higher interest rates and ultimately cost more.

• Common loan term: 12-84 months
• APR interest range: 1.04%-25.97%
• Required credit score: 780 or above to get the very best interest rate; 600 or higher for average rate; under 600 gets the double-digit interest rate

Learn more about auto loans here.

Student Loans in Florida

Student loans in Florida are offered to college students and their families to help cover the cost of higher education. There are two types of student loans: federal student loans and private student loans. Federally funded student loans are better, as they have lower interest rates and more borrower-friendly repayment plans.

• Common student loan terms: 10 years to 25 years
• APR interest range for federal loans during the COVID-19 crisis: 0%
• APR interest range on undergraduate federal loans when COVID-19 rules are removed: 2.75%; on graduate loans 4.3%; on PLUS loans 5.3%
• APR interest range for private loans: is 2.8%-14.5%
• Loan forgiveness is possible with federal loans, but it is not available for private loans.

Get the best consumer finance loans in Florida

Mortgages Loans in Florida

Mortgage loans are most commonly distributed by banks, credit unions, and online lenders to allow qualifying consumers to buy a home.

The mortgage loan is tied to your home, so you risk foreclosure if you fall behind on monthly payments. Mortgage loans have among the lowest interest rates of all loans because they are considered secured loans, as your home will secure the loan.

Mortgage loans have variable-rate loans, but most homebuyers prefer fixed-rate mortgages.

• Common loan terms: 15 and 30 years
• APR interest range: As low as 2.8 % and high as 5.6%
• Credit score requirements: The higher your credit score, the lower the interest rate you pay. Generally, lenders like a minimum score of 660 or better, but you can qualify for an FHA loan with a score of just 500.

Home Equity Loans in Florida

If you have enough equity in your home, meaning your home is worth more than you owe on it,  you can borrow against that equity.

Home equity loans are good for renovating the house, consolidating credit card debt, major medical bills, paying off student loans, and many other projects.

Home equity loans and home equity lines of credit (HELOCs) use the borrower’s equity in their home as collateral, so interest rates are considerably lower than what you pay on credit cards.

The big difference between home equity and HELOCs is that a home equity loan is a lump-sum payout; has a fixed interest rate and regular monthly payments. A HELOC is a line of credit for 15-30 years. It has variable rates and offers a flexible payment schedule.

• Common loan terms: 5-10 years for home equity loans; 15-30 years for HELOCs
• APR interest range: 3.25%-11.99%
• Credit score requirements: 660
• Collateral requirements: the home serves as the collateral

Balloon Mortgage Loans in Florida

A balloon mortgage loan has very low or no monthly payments for a short-time period but then is required to pay off the balance in a lump sum.

These types of loans are extremely high-risk loans.  The borrower pays no interest or makes no payments for a short time period, but at the end of that time period, must make a “balloon payment” that covers the accumulated amount of principal and interest.

People use these loans if they intend to own a home for a very short time period and expect to sell it quickly, or if they hope to refinance the loan before the balloon period expires.

Loans for Veterans In Florida

The Department of Veterans Affairs (VA) has lending programs available to its veterans and their families. The money comes directly from the bank, not the VA. The VA guarantees the loan and the VA acts as a co-signer, helping you to get higher loan amounts with lower interest rates.

Title Loans in Florida

Title loans in Florida will use the equity that you have in your vehicle. The lender will use the equity to determine how much money you will qualify for.

Title loans accept all credit scores, you and even get a no-credit-check title loan in Florida, interest rates will vary from lender to lender.

With a title loan, you can get same-day funding, it is one of the fastest ways to get thousands of dollars without much paperwork or delays.

Small Business Loans in Florida

Small business loans in Florida are given to entrepreneurs or business owners to help them start or expand their businesses. The best source of small business loans is the U.S. Small Business Administration, which offers a variety of options depending on each business owner’s needs.

Cash Advances In Florida

A cash advance is a short-term loan against your credit card. Instead of using a credit card to make a purchase or pay for a service, you bring it to a lender and receive cash to be used for whatever purpose you need. Cash advances also are available by writing a check to payday lenders.

Payday Loans in Florida

Payday loans are short-term, high-interest loan options designed to bridge the gap from one paycheck to the next. These payday loans in Florida are used predominantly by repeat borrowers living paycheck to paycheck.

The repayment period is short – and the 399% APR interest that goes with them is expensive. The government strongly discourages consumers from taking out payday loans because of excessive costs and interest rates.

Pawn Shop Loans in Florida

Pawn loans in Florida are high-interest loans similar to secured loans. The borrower offers some sort of property (jewelry, watch, electronics, etc.) as collateral for a loan.

The pawnshop owner provides the loan and sets the terms for repayment. If the borrower repays the loan on time, the property is returned. If the loan is not repaid on time, the pawnshop owner can sell the item to recover the unpaid amount.

Borrowing from Retirement & Life Insurance in Florida

Those with retirement funds or life insurance plans may be eligible to borrow from your account. This option has the benefit that you are borrowing from yourself, making repayment much easier and less stressful. However, in some cases, failing to repay such a loan can result in severe tax consequences.

What Type of Consumer Loan Should I Choose?

If you decide that you need to get one of these consumer loans in Florida, it is important that you fully understand all of the terms and the repayment conditions.

You need to fully understand all the terms, and if anything is unclear, it is important to ask for it to be explained to you, do not just sign it because you are embarrassed to ask.

If you are getting a consumer loan and it is tied to your collateral, make sure that you can make your monthly payments, or you could lose the asset that you are pledging to the loan.