Sometimes life throws us curve balls. Unexpected expenses due to medical crises, sudden moves, or the loss of a job can leave people in need of lenders who can meet their needs for an affordable rate. While someone’s pre-existing financial situation will greatly influence the options available to them, one promising direction to explore in these situations is a loan through a non-recourse lender. To learn more about what a non-recourse lender is and types of collateral, along with other types of loans available, keep reading.
1) The Basics of a Non-Recourse Loan The common thread amongst all types of loans from non-recourse lenders is that there is a debt that is secured by some type of collateral. This can range from anything from an automobile to property, and helps to give people access to lending and minimizes the risk to the lender if default should occur. Obviously, in order to access a non-recourse loan, you need to have something that will count as collateral. You should also consider whether or not the risk of losing whatever it is you use as collateral is warranted by your current financial need.
2) Types of Collateral As mentioned, there are several different types of collateral. People most often think of collateral in terms of real estate. In addition to real estate, however, tangible things like cars, machinery, art, and jewelry can all be considered collateral. In addition to these types of items things like investments, stocks, and payment rights can also be considered collateral. When exploring whether or not a non-recourse loan would be the right option for you, it is a good idea to take stock of everything you have that could be used as collateral.
3) IRA Loan Basics Many do not realize that their IRA can do more than be an account that is simply used for basic investing for retirement. Understanding everything your IRA can do is important because 46 million households in the United States have an IRA. In just self-directed IRAs, estimates are that Americans have more than $94 billion invested. Despite the huge prevalence of IRAs, many do not realize it can be used to do things like covering medical expenses that exceed 7.5% of your income. Further, you can also use IRA funds for IRA non recourse loans and a self-directed IRA can be invested in a wide variety of manners.
4) Choosing What’s Best for You Ultimately, choosing the right type of loan is based on a variety of factors. Understanding the wide variety of options, as well as your available collateral and overall financial health can help make sure you choose the best option to get you the resources you need when you need them, without sacrificing your financial future.
