Various Types Of Loans

Various types-of-loans

Different types-of-loans

Loans can be used for many different purposes. Loan can be used for financing a new business or taking new car or buying new home or buying jewelry or any such other reason. With different needs, come different loans. For getting the best and most suitable type of loan, you must be aware about the types of loans in the market. You must also see which type of loans are used for which purposes, what is the rate of interest and then g for the one which suits with your needs in best possible manner. Here are some of the most popular types of loans available on the market.

  • Personal loans

This is most common types of loans and is also offered by most of the banks. The proceeds from these loans have universal usage. It can be used for any purpose. It can be used for paying college fees or paying house rent or paying off the electricity bill or paying the installment of car. It’s a universal loan which can be used for any universal purpose. These loans are considered unsecured and its amount range is also not specified. It can range from some hundred dollars to thousands of dollars. Here the lenders will be in need of some kind of income verification or proof of your having any other asset which is having the value equals to the amount of the loan. The approval of such loans can be granted in few days of its application which is one or two page long. The interest rate of such types of loans is very much high it usually ranges from 10% to 12%. It’s one of the best sources of procuring finance for those individual having short term needs and can repay the amount within some years.

  • Home equity loans

Home owners can get finance against the equity or let’s say the assets they have. In short, homeowners can take loans against the value of the homes they are having. The proceeds from such types of loans can be used for any of the purpose but generally one would never risk their home for any small matters. Usually these loans are taken for home addition purposes or for debt consolidation purposes. The interest on such types of loans is very much reasonable and thus individuals are attracted towards this loan. The time period of such loans ranges from 15 to 20 years. This is a long term type of loans used for long term purposes.  This loan is also somewhat risky as you lose your home in case of failure of payment. Specifically for a family where there is single earning member and disability or death of that person can lead to losing your home.

  • Cash advances

Cash advances are generally offered by credit card companies in the form of short term loans. The interest rate usually remains high and they are also not tax deductible at source. The amount of loan is also usually high and for long term.

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