An Insight Into the Types of Loans

by : Gracy Bonsu

Often emergencies land us into problems. This happens because we are unaware of the alternatives and their pros and cons.

Needless to say, problems come without invitation. Preparing for them in advance would help us get rid of other following uncertainties.

Therefore, we should have the information regarding loans too. Knowing the types of loan would definitely help when you will actually need them.

On the basis of requirement, loans can be classified into:

  • Personal loans: There is no end to the use of personal loan. You can buy an asset, get the repairs done at home, go for an exotic holiday or plan for the wedding reception party. Apart from them, you can also have personal loan, if you wish to go for an adventurous trip for trekking, gliding or para-gliding. It is there to provide you a back up if you want to pursue any of your expensive hobbies or want to break a record of baking the biggest cake of world too!

  • Home improvement loans: It is used specifically for the improvement of home. It caters to the variety of your home improvement needs like construction of an additional room or creation of study space in the existing room. Not only that, with a home improvement loan you can re-furnish your house or get a swimming pool constructed in your free space.

  • Loan can also be categorised on the basis of security as well:
  • Secured loan: It is purchased against security. A secured homeowner loan has several advantages such as low interest rate, longer repayment period and other convenient terms and conditions.

  • Unsecured loan: There is no need of security in this case. However the rate of interest for unsecured personal loan is higher than that of secured personal loan, but you can also avail this feature if you have good credit history. And, you need not tell the reason for getting loan necessarily.

Do not prepare the future for yourself; instead prepare yourself for the future, by having the complete information on loan options instantly available for you.