Personal Loans
There is a range of personal loans available from the very short term (weeks), mid term (months) and longer term (4 months and above). Loan types can also be broken down into secured (usually by property or cash) providing a lower interest rate than unsecured loans. Unsecured loans usualy have a higher APR (annual percentage rate) because they are considered to be of a higher risk to the lenders.
Payday loans usually fall into the unsecured short term category with a number of providers and brokers available. They are usually governed at a state by state level with some states not favorable to this type of lending and others choosing to have strict laws and guidelines designed to protect borrowers.
Mid to long term lenders usually consist of banking or large financial institutions however alternate sources of loans are becoming available to borrowers through sites such as person to person lending for both personal and business needs. These sites are a good alternative in between payday loans and banking/finance institutional lenders.
Peer or P2P loans are generally funded by 2 or more lenders or sophisticated investors seeking a method to enter the lending market with the head ache of setting up a business. As the loan is spread across many lenders the loan risk is distributed and so this opens up opportunity for borrowers to get money at lower than payday loan rates and also get approval when they may not have at a bank.
Short term loans are usually for smaller amounts up to around $1000 whereas mid term loans can have funds available up to $25,000. Essentially you should borrow at the most effective rate and amount that you need in order to repay the loan on time, improve your credit score and establish a good loan history.