Types Of Loans Available And Their Uses

A loan is a financial agreement between two parties when money is lent to another party under the following terms and conditions. Each party agrees to loan terms before any funds are advanced. A secured loan may only be secured by certain property like a house or it can be unsecured like a credit card.

Types of Loans There are various types of loans available to consumers. They are personal loans, home equity loans and car loans. Personal loans are the most popular. It can be taken for almost any purpose like purchasing a vehicle, paying off debts, buying a home, paying off credit cards or consolidating debt. A home equity loan can be used to pay off existing debt and improve your home. The money can also be used for other things like education, medical bills, and debt consolidation.

Home Equity Loans These are mortgages given on the home. With this type of loan you can borrow money to buy a home. You are allowed to borrow so much but the repayments depend on different types of factors like interest rate, amount borrowed, property details and loan term. The repayment amount and terms can differ from one provider to the other.

Car Loans are used mostly by young people to purchase new cars. You need to meet certain repayment terms and it is based on the loan principal amount plus interests. A low loan principal means you will have lower monthly payments over a longer period. In case you are unable to keep up with the payments then you may lose your car. These types of loans are usually secured by the car.

Gold Loans are made to consolidate cash in your savings account. It is very useful if you have a limited budget for investing. You may want to use the money to invest in gold. This is because the value of gold is increasing, thus there is an appreciating value in your savings account. With a secured loan you are able to borrow bigger amounts of money as compared to unsecured loans and thus you can purchase a bigger vehicle with the borrowed amount.

If you have a good credit score you can easily get access to various types of loans at a reasonable interest rate. All you need to do is search the Internet. There are many lenders who offer good credit score guaranteed loans. Before deciding which loan to go for, it is important that you should compare between different lenders. This way you will know which one has the lowest interest rates and charges.