What are the different types of loans available?
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Answer ( 1 )
Loans are needed for several purposes such as to buy land, a house, education, a car, and so on. It can be confusing for most of us as to where and how to apply for these loans. In most cases, your home branch bank will guide you with the best options available.
Here are some common types of loans listed briefly –
Personal loan – these loans are offered by banks after some verification of the person applying for the loan. These loans are usually not secured. They could range from any amount depending on the bank and the need. Usually personal loans are taken to buy land or property. These have a term period within which you would need to repay the amount loaned to you. Interest rates of these loans could be high, so choose the bank where you apply for the loan wisely.
Credit cards – are a sort of short loan where you buy first and pay later. Usually there is a billing period of a month within which you would need to clear the bill. Credit cards are convenient as you can easily purchase an item of your choice even if you do not have money at that moment. Credit cards are easily available for salaried people and are extremely popular. It is important to keep your credit card password regularly changed as there are a lot of credit card frauds these days.
Home loans – are used to buy property and have a monthly EMI system where you repay the loan in small amounts over a period of time. This is also one way to save taxes.
Business loans – are taken to start your own business and this might need some sort of guarantee on your part. This can be worked out with the bank.