Finding the right loan for your needs is not a cinch. Whether you need money for personal needs or you need money for your business, various types of loans are out there that you may find bewildering. You can acquire information about those loans through a little bit of research, but most loans have common features and benefits, and therefore, they end up choosing the wrong financial product for them.

The fact is that there are various types of loans aimed at one particular financing need. You see the variety because the lending industry provides them as an alternative. For instance, you all know that payday loans are aimed at meeting small emergency expenses, but you can consider an alternative such as a doorstep loan.

There are various financial products on the market, and they have all been designed to meet a specific purpose. For instance, a residential mortgage cannot be used to purchase a commercial property, and similarly, a commercial mortgage is not suitable to purchase a residential property you want to let out. You will rather need a buy-to-let mortgage.

Here are some alternative financial products for your different needs:

• Short term loans in Ireland

Short term loans in Ireland are small personal loans. They are aimed at meeting your small emergencies when your savings are not enough to fall back on. These loans have a quick turnaround. The approval is made almost the same day you put in the loan application. These loans are so small that you are required to pay down the debt in full on the due date. It means the repayment length of these loans cannot be more than a month.

In order to qualify for short-term loans in Ireland, you should have a decent credit report. However, some lenders might also approbate your application despite a bad credit rating. If you are somehow refused short term loans, you can consider alternatives such as:

• Bad credit loans
• No credit check loans

Bad credit loans are aimed at those whose credit rating is not excellent. Before applying for these loans, it is enjoined that you carefully consider what credit score is the bare minimum for a lender. If your credit rating is lower than that, you cannot qualify for them.

No credit check loans in Ireland are also an alternative to small loans, but they are aimed at those whose credit score is extremely poor and cannot afford to have another hard inquiry. The size of these loans is smaller than that of small loans. While you can borrow up to €1,000 with a good credit rating and €700 with a bad credit rating, no credit loans cannot be more than €500.

You will have to pay high interest rates if your credit rating is not stellar, whether you are applying for poor credit loans or no credit check loans.

• Business loans

You cannot use small personal loans if you are borrowing money to meet business expenses. Whether you need money to buy equipment or bridge the gap in working capital, small business loans are easy to qualify for. You must have a decent credit rating. In a few exceptions, you can be eligible for borrowing despite a bad credit rating.

Most of the lenders will hesitate to lend you money when your credit report is not stellar. If your business has a separate legal entity, you will also need a business credit report. If you are rejected by a lender, you can consider other alternatives such as:

• Crowdfunding
• Peer-to-peer lending
• Invoice financing

Crowdfunding enables you to obtain money without further ado. A few crowdfunding platforms have built a reputation for providing loans at affordable interest rates. However, the money you raise is not a loan because you will be lending money in exchange for equity.

Peer-to-peer lending is slightly different from crowdfunding. It also lets you borrow money from a large group of people who contribute a small amount, but you have to pay down interest on top of what you borrow.

Invoice financing is also an alternative to a business loan if you need funds to bridge the gap in working capital. However, this option is suitable for those who sell their products and services on credit. You borrow money against invoices. About 85% of the invoice value is funded, and the remaining amount is paid back to you minus fees once your customers pay back the whole amount to an invoice financing company.

• Long-term loans

Long-term loans are aimed at meeting large expenses. They could be used for buying a house, a car, renovation and purchasing equipment. Long-term loans are used for a specific purpose. They cannot be used for any purpose other than the one for which they are designated.

For instance, a residential mortgage cannot be used to buy a property. You will need to apply for a commercial mortgage then. However, if you are self-employed, you will have to apply for a self-employed mortgage.

Self-employed mortgages are alternatives to residential and commercial mortgages. They are called self-employed because they are aimed at those who run their own businesses.

If you purchase a car for your own purpose, it is called an auto loan, but if you need a car for your business purpose, you will have to rely on equipment financing or a business loan.

Sometimes, loans are known by different names only to target a particular group of people. For instance, bad credit mortgages are no different from residential mortgages. They got this name because they are targeting subprime borrowers. However, the approval criteria will be different. Bad credit mortgage applicants will have to pay down 20% of the down payment, while good credit applicants only need to make a deposit of up to 10%.

The final word

Whatever the loan product you choose, make sure that your credit rating is decent. Research lenders. By comparing interest rates, you will choose the lowest possible interest rate. If your credit rating is not up to scratch, you should try to improve it. Doing this will help you qualify for lower interest rates.