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Loan
A loan is the borrowed fund, which is the sum of the money borrowed from the lenders, such as banks, credit unions, NBFC’s, etc. and is repaid over a period of time with interest charged at a certain percentage. There are so many types of loans available, such as mortgage loans, auto loans, personal loans, education loans, etc.
Mainly, loans are used to finance specific needs such as purchasing a car, home, etc. The lender specified the term of loan, including the length of the loan, interest rate, and debt repayment schedule. The borrower is accountable for repaying the loan as per the specified schedule along with due interest.
Loans can be secured or unsecured where a secured loan is backed by security or collateral against the loan amount, such as gold loan, mortgage loan, etc. and an unsecured loan is not backed by security or collateral whether it is given on the credit worthiness and potential of the borrower’s to repay the loan with interest.
You have to carefully read all the terms and conditions associated with the loans before accepting it, as you are obliged to repay the loans with interest as per their terms and conditions. As it is advisable to compare offers from different lenders and select the best one which suits your needs and capacity.
The different types of loans are as follows:
Personal Loans
This is an unsecured type of loan offered by lenders such as banks, credit unions, and online lenders based on the creditworthiness of the individual. These loans often provide for personal purposes, like financial vacation, home renovation, consolidating debt, etc. The interest totally depends on the capacity and ability of the individual to repay the loans.
Mortgage Loans
The purpose of these loans is to support financing to buy a home. There are a variety of mortgage loans available based on their features, such as adjustable-rate mortgages, fixed-rate mortgages and also government-backed loans (such as FHA and VA) to provide the basic necessity of shelter to the citizens of their countries.
Business Loans
These loans are provided to finance business operations, purchase machinery, requirements of working capital, etc. These loans are generally offered by banks, NBFC’s and other financial lenders and the interest rate associated with these loans totally depends on the goodwill of the business and the previous credit history of the borrowers.
Auto Loans
These loans are provided to finance the purchase of vehicles such as cars, motorbikes, trucks, buses, etc. Generally, these loans are provided by credit unions, banks and auto dealerships, and the interest rate prevailing on this type of loan is based on the borrower’s credit score.
Education Loans
The purpose of these loans is to promote higher education as they are used to finance the cost of higher education, which includes tuition fees and living expenses. The two main types of education or Student Loans are federal student loans and private student loans, as the Federal Student loans are backed by the federal government and have a fixed interest rate, while private student loans are offered by banks and other financiers and have adjustable rate loans.
You have to carefully read all the terms and conditions associated with the loans before accepting it, as you are obliged to repay the loans with interest as per their terms and conditions. As it is advisable to compare offers from different lenders and select the best one which suits your needs and capacity.
The different types of loans are as follows:
Personal Loans
This is an unsecured type of loan offered by lenders such as banks, credit unions, and online lenders based on the creditworthiness of the individual. These loans often provide for personal purposes, like financial vacation, home renovation, consolidating debt, etc. The interest totally depends on the capacity and ability of the individual to repay the loans.
Mortgage Loans
The purpose of these loans is to support financing to buy a home. There are a variety of mortgage loans available based on their features, such as adjustable-rate mortgages, fixed-rate mortgages and also government-backed loans (such as FHA and VA) to provide the basic necessity of shelter to the citizens of their countries.
Business Loans
These loans are provided to finance business operations, purchase machinery, requirements of working capital, etc. These loans are generally offered by banks, NBFC’s and other financial lenders and the interest rate associated with these loans totally depends on the goodwill of the business and the previous credit history of the borrowers.
Auto Loans
These loans are provided to finance the purchase of vehicles such as cars, motorbikes, trucks, buses, etc. Generally, these loans are provided by credit unions, banks and auto dealerships, and the interest rate prevailing on this type of loan is based on the borrower’s credit score.
Education Loans
The purpose of these loans is to promote higher education as they are used to finance the cost of higher education, which includes tuition fees and living expenses. The two main types of education or Student Loans are federal student loans and private student loans, as the Federal Student loans are backed by the federal government and have a fixed interest rate, while private student loans are offered by banks and other financiers and have adjustable rate loans.
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