Varieties
are very important in human life as we need a different type of thing for every situation.
For example, a single medicine is not enough for every cure. Hence, a single
loan is not enough for every monetary issue. This statement raises a question,
how many types of loans exits? Till the date,
world has witness two type of loans that
are secured loans and unsecured loans. Let discuss them.
Secured loan
First
let’s discuss secured loan, these types of loans are mostly offered by banks and also by some government
recognized financial lending firms, after mortgaging some property whose value
is close enough to money you’re borrowing. These loans can be risky for
borrowers as banks, and lending firms
have complete rights to sell your property if you’re not able to make payment
on specified time. The interest rate of this loan is many times less than an unsecured loan. Mostly people and business
firms prefer secured loans because of its low interest rate. The examples of
this type of loan are a home equity line
of credit and mortgage loan. Apart from property you can use registration loans in Glendale
for your vehicle registration. These registration loans
are simply available in the market, you can visit online website for more
information.
Unsecured loans
These
loans are mostly offered by
government recognized private financial lending firms and also by a few
government banks. In this loan, borrowers don’t have to mortgage anything as
security. These loans are zero percent risky for borrowers, and the entire risk goes to the lending firms. The
interest rate of this loan is many times more than a secured loan that’s why the lenders don’t bother security. The loan
requires fulfilling a very strict condition that the borrower must have a good credit history along with a permanent
job. While mostly people prefer secured loan,
this loan is for those peoples who need urgent money but they don’t have
anything to the mortgage. Examples for
this type of loans are student loans and personal loans.
Benefits of loans
·
The biggest advantage of loans
is that the borrowers are aware of the amount which they have to pay as
monthly. Hence, it allowed them to make a necessary
change in their financial monthly budget to manage the needed amount.
·
This advantage also provides them great peace of mind. This loan is
also come with the great advantage of a low
rate as compared to other loans.
·
The interest rate normally lies
between 5 to 7 percent; the percentage of rate depends on the different type of
loans.
·
There is no competition between the interest
rate of loans and other loans.
·
These loans are also renewable, this is very interesting as some
money making minds are always looking for new opportunities so whenever
government plans change such as low interest rates or any other beneficial
change in government bank policy they make big money.
Hence,
borrowers can make great money by the loan
renewal policy.
