If you need a personal loan for paying off debts, funding a vacation, or any other reason, you may want some information on how they work and what you need to do to choose the right loan vehicle for you. There are a lot of different personal loans, and choosing the right one for you can mean the difference in whether you get it paid off on time or whether you default and hurt your credit rating. Since paying off debts like loans can help your credit rating—and get you the money you need—let’s go over four kinds of personal loans.

Options for Personal Loans

The first and often easiest personal loan is one from a family member or close friend. The advantage is that you don’t have to fill out paperwork. The disadvantage is that not repaying one can ruin a close relationship, and sometimes they have an emergency and need the money back immediately.

Next, of course, is a tradition lending institution like a bank or credit union.  These require a credit check, up to a week of waiting to find out if you are approved, and up to a week more to get the money you are borrowing. The advantage is that these are trustworthy institutions. The disadvantage is the wait time. And if you don’t have great credit, the interest rates can be quite high for personal loans.

A car title or registration loan is the next personal loan option. Your vehicle functions as your collateral in these loans, and because you have this collateral, you ordinarily don’t have to have a credit check. The advantages are the low paperwork load and the speed of getting your money. The disadvantage is that the interest rates are relatively high.

Finally, you can get a personal loan from a pawn-type situation. Your collateral is a big limitation on these; most of us don’t have valuable family heirlooms, so we can’t get a lot of money.  You have the same advantages and disadvantages here as with a title loan, but without the high dollar amount.