Personal loans are loans that are easily available to help consumers fulfill their financial and monetary needs. They can be taken to fulfill all needs big or small. You may use it consolidate your debt, pay high rate credit card dues, buy the latest Mercedes, go on a luxurious holiday or buy your dream house with the white picket fence.
Types of loans
There are many types of loans offered these days. The most basic two types are:
Unsecured Loans
Unsecured Loans do not require your property as security. The rates of interest and interest rates are higher in this loan type. These loans are always hard to obtain as the lender may be anxious about repayment.
Secured Loans
Secured Loans require collateral and carry low rates of interest. They offer flexible repayment terms and the amount of monthly payment is small.
Types of loans
Depending upon the Interest’s percentage, personal loans can be grouped as:
Adjustable Loans
As the average rates in the market change, the amount of monthly payments may be adjusted throughout the loan period. The rate of interest on an Adjustable Rate Loan also keeps changing.
Fixed Rate Loans
The amount of monthly payment and the rate of interest remain the same throughout the loan period.
Types of loans
Based on the Mode of Repayment, personal loans can be classified as:
Installment Loans
In case of this type of loan, the amount, along with its interest, is paid again in the shape of 30 days installments unless the loan’s time-window expires.
Balloon Loans
This type allows you to pay interest at regular intervals and the entire principal amount that can be paid again at the ending of a loan episode.
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