Whether you’re looking for financial help to start a new business, go to college, or purchase a new home, there are several financial institutions to help you get the money you need. The key to getting the best funding is knowing which type of bank suits your needs and offers the best interest rate. Here’s a look at four types of financial institutions and how they can help you get the right loan.
Internet banking is one of the newest and fastest-growing financial intuitions in today’s market. Internet banks tend to pay higher interest rates on deposit accounts and have lower inter rates on loans. If you’re looking for a mortgage, car, or SBA loan, using an internet bank may be the right solution.
If you’re considering starting a new business or expanding your small business, SBA loans deliver some of the lowest interest rates. Several factors determine your interest rate for an SBA loan. According to Lantern by SoFi, “Your creditworthiness, the time you’ve been in business, and the collateral you provide (where required), among other factors, will determine your specific interest rate.”
SBA loan rates vary with each type of loan. However, if you meet the standards for an SBA loan, your interest rate could be as low as 2.21 percent for a 504 loan. If you’re looking for a low-interest rate SBA loan provider, begin your search with an online bank.
Another financial institution where you can find funding is a retail bank. A retail bank is a traditional bank that offers deposit accounts, small investment accounts such as certificates of deposit accounts, money market accounts, and saving accounts. Many retail banks provide home mortgage loans, car loans, and personal loans. Remember that retail banks require a good credit rating or collateral for loan approval.
Commercial banks are a great place to get a loan for a business or business expansion. Suppose your business is flourishing and you’ve been in the business for several years. In that case, you may qualify for a business loan or loan to expand your existing business. You can get a business or personal loan from a commercial bank if you don’t qualify for an SBA loan. However, most personal and business loans don’t have low SBA loan rates so you may pay more interest on your loan.
Credit unions are created, owned, and operated by their members and generally offer the same services as retail banks. Credit unions typically offer lower interest rates on loans and pay higher interest rates on deposit accounts than retail and commercial banks because they only need to make enough money for operating costs. At their start, credit unions were only open to members, such as teachers or military credit unions, but now most credit unions are open to the general public. Credit unions are a dependent source for car loans, personal loans, vacation loans, and home improvement loans.
No matter the type of loan you need, it’s always a good idea to do your homework and research several financial institutions to determine the best loan and lender that works for your needs. Choose a reliable institute to get the best rates and benefits on your loans Read More