There are good possibilities that the predominant population knows a bit about loans. Today loans play a major role in our life. It has provided the opportunity to own a lot of things to many people that are very much farfetched considering their financial status. We are not going to get into the details of banks and procedures but instead in this article we will the different types of loans that the bank offers its customers.
Secured personal loans
Secured personal loans are the ones that are protected or secured by collaterals. Some of the examples of secured loans are car loans and mortgages. Generally, personal loans are unsecured loans. But there are a few banks that offer personals against assets. These assets might also be saving accounts. A secured loan is the one in which you will get easy access to money. You do not have to pay the fees or sell any of your assets. But you will be paying a monthly amount with the interest to the bank.
Unsecured personal loans
If there are secured loans, it is mandatory that there should be unsecured personal loans. The majority of the loans that are offered by the banks are unsecured loans. Generally, for unsecured loans, the interest rates are a bit high when compared to secure loans. The unsecured loans are protected or backed by any kind of collateral. Even though the interest rates are high, most of the banks offer various options for the repayments of unsecured loans.
Fixed rate loans
The fixed rate loans are the ones where there are no foreclosures. The interest rates in fixed and it cannot be changed. You have to stick on to the same from the beginning till the end. This is not preferred by the majority of the population. There are not many positives in this loan.
Variable interest loans
As the name states, the interest rate of the loan will vary depending on the life of the loan. In this loan there are foreclosures. Hence the loan period can be changed during the repayment period. This is the kind of loan that everyone will prefer. The biggest advantage in this type of loans you have a lot of repayment options.
Debt consolidation loans
It is a well-known fact that many people take loans is for debt consolidation. It may be credit cards, paydays and all other types of personal loans. Debt consolidation loans are the ones where you will not have any kind of issues for loan approval. But you also need to understand the fact that the interest rate will be high for debt consolidation loans.
Lines of credit
Lines of credit are the ones that are provided by the banks to customers that have very specific requirements. Since it involves high asset requirements, there are no mandatory collaterals. The most common line of credit is the home equity line of credit.