Different Types Of Loans

Based On Different Types Of Needs

Different types of loans are getting a lump sum amount of money altogether for any purpose. The loan is usually taken when you cannot afford to pay everything at one time in cash. There can be a variety of reasons for taking a loan and along with that, there are also many different types of loans. Which type of loan to pick is based upon the reason to take a loan? You should make a detailed study as to which type of loan avails you with which types of benefits and what are the criteria of repayment and also pay much focus on the rate of interest on the loan. Here are some of the different types of loans based upon your different types of needs.

• Personal loans

These types of loans are such which are offered by almost all the types of banks. There is no particular purpose behind these types of loans and they can be used for almost any kind of thing. You can use these types of loans for any general bill or paying your kids school fee or any such purpose.

Usually personal loans are considered to be unsecured and the range of such loans can start from anywhere and also end till anywhere. The general rule for getting this types of loans is that the lender will ask for some kind of income verification or any kind of proof for other assets which should of at least the worth of the individuals borrowing. One of the drawbacks which you need to bear if you are opting for such types of loans is that the rate of interest for such types of loans can be quite high. It would be around 10 to 12 % approximately. Another drawback of opting for these types of loans is that such loan must be repaid within the period of two years and hence you cannot borrow big amount.

• Cash advances

Cash advances are also one types of loans only which is offered by credit card companies. There are also some other companies which offers loans against the future income of the consumer. Cash advances are very to get and hence many people opt for such types of loans or cash advances. But it does have some drawbacks. These are not really tax deductible. The rate of interest and other related fees can also be quite high. Thus cash advances are really a very fast way to obtain funds like it is available on the spot but as it has so many cons it should be kept as your last option.

• Small business loan

Local banks generally grants would be business entrepreneurs with this small business loan but only when the entrepreneurs have submitted a formal plan of business with the bank. Here the person asking for loan has to put some personal guarantee which he have to put some of his assets in the form of guarantee which can be taken back from them if they fail to repay the loan.