Types of loans vary from one to another, the reason behind that is that each loan is designed to have a different intention and different use. Types of loans differ from the rate of interest or they also differ from length of the time of loan or even by the fact when the payment is due and many such other reasons. It depends upon your need and your ability to repay as to which type of loans you should opt for. Before checking out the types of loans, first of all you need to decide the reason for which you want to take a loan and then check the related options for the types of loans. Here are some of the types of loans you can opt for.
Student loans are such types of loans which are offered to the college students and even to their family members so that they can cover the higher education costs of theirs. There are basically two main types of loans private student loans and federal student loans. When compared both of them federally funded student loans are better as they usually have lower rate of interest and they also have borrower friendly terms and conditions to be followed.
Mortgages are also types of loans only and such types of loans are distributed by the banks. These types of loans are usually taken for buying homes and it is taken by those customers who cannot pay whole amount of the home up front. Mortgage is given on your home only. You have to mortgage your home and then only you will get the mortgage amount. Here if you fail to give the mortgage amount then your home will be taken back from you. As compared to all types of loans, mortgage has the lowest rate of interest and hence if you want to buy a home, you must go for mortgage and buy your home with lower rate of interest.
Auto loans are also similar to that of mortgage only. Here you have to put your vehicle as a security. Thus if you fail to pay the installments of your auto loans then you will have you lose your car or any other vehicle mortgaged. Such types of loans are offered either by the banks you can also get it from the car dealer. Usually loan from the car dealer is more favorable as the banks offer higher rate of interest and the overall cost would also be more. Hence if you are considering taking a car loan then try and take it from the car dealer only.
Such types of loans can be taken for any of the purpose. It can be either paying your bills or taking any new appliance or your homes renovation. Thus if you have any minor or major purpose or need of finance then you can opt for personal loans. Such types of loans are offered depending upon your credit history.