Variety of Loans

by : Daniel Spivey

Loans are availed from different institutions such as banks, private lenders, societies by the people based on their requirement. There are variety of loans available in the market. The basic categories of loans are auto, home, education, commercial and personal loans. These are again sub divided based on the requirement.

The purpose of an auto loan is not a mystery. Today, having a reliable car or vehicle is a necessity for most people. Since many people simply cannot afford to buy even a decent used car outright, an auto loan is required. Most automobile dealerships offer financing for car loans through participating lenders and certain requirements are to be met in order to qualify for a loan. Of course, these requirements will vary considerably with the availability of loan options for those who have poor credit ratings.

Education loans include those for students who have attended college right out of high school as well as adults who have taken classes to further the career educational levels. Education is crucial to one's to financial success; in fact, it is not surprising to note the numbers of banks, financial institutions, and government financial aid programs are constantly growing and changing to compensate for the rising costs. The goal is to give access to anyone who desires to improve their level of education, and by extension, their employment circumstances.

For anyone who has the dream of owning a home, a home loan or mortgage loan is a means of fulfilling that dream. Like other types of loans, certain qualifications are to be met that are established by the lender to receive a loan for a house. Since this is such a long-term expense, it has to be monitored closely. For those who have home already, but in need of another loan, they can actually obtain a mortgage loan on the existing house. This loan requires careful exercise to find a reliable lender.

The final category of loans includes those that are obtained from banks or credit unions on a personal basis or for small business purposes. These two purposes often blend together; need of a personal loan to pay off overhead expenses and capital new business.

This overview provides at least a slightly clearer picture of the loan realm. Various sub categories of loan is available in each main loan such as car loan, two wheeler loan, consumer durable loans, secured loans, unsecured loans, mortgage loan, reverse mortgage loan, pay day loans, home loans for new as well as old houses etc. Compared to other loans, housing loan and education loan always carry low rate of interest as these are for social improvement.

The burden of finding a suitable loan and a reasonable lender lies with the borrower. Of course, nowadays there are financial experts / consultants are available to give suitable advise on the right type of loan and the right lender. These financial experts have ready made solution based on their analysis, to help the borrower in deciding the right loan, repayment period, competitive interest rates etc.