We borrow money either from an individual or an entity and
this is also called the loan. The loan involves the principal amount, rate of
interest and the duration to return the amount.
Categories of loan
We all know that secured loans, unsecured loans, and business term loans are the three main
categories of loans. Let us discuss them in detail. When we get money either
from a bank or any third party by pledging our property then that type of loan
is called secured loans. The lending person can keep our property as a security
and can give us money without any fear. If we fail to return the money on time
then the lender can sell the property in the auction and can take his money
back. In an unsecured loan, the lender will not ask for any property to pledge
he will mainly check our CIBIL score. If we have maintained a good CIBIL score
then we will get the loan without any delay. The final loan category is the business term loans. Here the loan is
paid back with an equal amount on a monthly basis.
Types of loans
Apart from categories, there are several types of loans. According
to the need of the borrower, they are categorized into segments. People may
need loans exclusively to build a new house. For this, they can approach banks
and ask for a housing loan.In this type, the loan amount is sanctioned at each
stage of the building. There is also another type of loan called car loans.
When you need to purchase a new car then you can get this loan and we need to
repay the loan according to the payment terms. Once we complete the loan the
papers will be handed over to us.another loan type is an educational loan. Here
the students are highly benefited through this loan. When they find difficult
to pay the fee of their course they can approach the bank and get this loan.
Apart from this if you need to fulfill any of our personal events like
marriage, or any other functions then we can go for personal loans. You can
also get money by using your jewels. We can get jewel loans from banks by
pledging our jewels.
So loans play a vital part in every individual’s life. All
are not born rich. Most of us are middle class in our standard of living. In
order to raise our standard, we need to develop more in our careers. Through
loans, we can leverage our business and build a great future.Click here businessterm loans
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