Various Types Of Loans In The Market

A loan is a means to an end; it is something you need to have in order to fulfill some urgent need. For many people, the fastest and only way to achieve their dreams is by using a loan to do so. The dream may be owning a house and that loosely translates to taking out a mortgage on a property; owning a car; piece of land, buying stocks and other investments.

All this things need money to achieve and sometimes this money is not forthcoming and you might have to take a loan from our financial institution or a lender of your choice.

When you approach your financier for a loan, it is important to know what types of loans are available and what class qualify to take. There different classes of loans based on; the type of income you have the purpose of the loan and the required mode of payment. The major types include:

• Personal loans
• Secured and unsecured business loans
• Cash advances
• Payday loans

Personal loans

This is tailor-made for personal use; you borrow it to take care of personal financial matters when you do not have enough money. They come in two forms; the secured and unsecured forms where the secured personal loan needs the borrower to bring collateral such as title deeds, car registration and other valuables that are equal to the value.

For the unsecured personal loan, it is usually given to salaried people who work in a company that has put up collateral for all their employees such that they can take the loans to improve themselves. These loans can be given for any purpose apart from venture capital.

Secured and Unsecured business Loans

These are mainly borrowed to rescue their businesses, to expand and to buy stock for their business. Since business is all about money and risk, they look for financial institutions that offer them the best terms and those that are affordable. For the unsecured loans, no collateral is needed but it is limited to a specific amount while the secured loan is normally given at the rate of 75% of the collateral offered.

Cash advances

These are given using credit cards where you can use your credit card to withdraw some cash to a certain limit to cater for our immediate needs.

Payday loans

These are given for emergency purposes to cater for things or incidences that are unforeseen; they can be borrowed from financial institutions or from direct lenders who specialize in such loans and ones that are paid in short term.

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