Loan sources

Credit cards are a convenient way to manage your regular expenses, but what if you need more money for a one-time expense? If you want to make a purchase that requires more money than you have in your bank account or can charge on a credit card, it might be time to apply for a loan. For instance, loans might help you buy a car, buy a home, pay for college tuition or start a small business.

If a loan seems to you like a much bigger commitment than a credit card, you're right — it's usually a bigger responsibility because it involves more money. If you take a loan you're using credit, but instead of borrowing a different amount each time you use the card, you borrow a specific amount up front, called the principal. You pay back that amount over time, along with interest. But you can't make just a minimum payment, the way you can with a credit card. You'll receive a bill each month for the amount of your payment — which may be fixed or variable depending on the loan you selected and the way that the interest payment is calculated — and you have to send in the full monthly payment.

If you need a loan you have many sources to choose from. That's good news, since shopping around might help you find a better deal. Furthermore, thanks to an increasingly competitive marketplace, many financial institutions are offering products and services that weren't traditionally part of their businesses. The following general guidelines can help you get a sense of what your choices are, but the actual products a lender offers may vary, so you should research a wide variety of options.