The Types of Loans

The Types of Loans

We tend to borrow money from our friends, colleagues, and relatives when we have emergencies and lack finances. There are times that our emergency funds, savings, and other sources of income cannot provide the total amount of our expenses. In times of financial crises, a need of urgent money is a must. The good thing is there is organization, and company that provides financial assistance. There are lending companies that provide a loan and creditors as financial support to the borrowers. The term loan is lending of money to an individual or organization. The debt money will be repaid with the incurred interest.

A loan can be classified into two types: unsecured and secured loans. An unsecured loan is a type of loan which the borrower does not provide a collateral agreement while secured loan does the opposite. Each type of loan has several forms and we’re going to scrutinize the top three popular loan below.

Personal Loan

A personal loan is a type of loan that has a variety of functions. It is considered as the widest loan because it can be an unsecured and secured type. There are various types of personal loan such as car loan, mortgage, credit cards, and more.

Payday Loan

 A payday loan is for employed individuals. There are organizations and lenders that provide a program for the employed personnel. We all know that our payday is not enough for our expenses and there are instances that paydays are delayed. In this case, employees tend to borrow money from the lender. The employee would ask for a cash advance and use the cash amount lent for their emergencies and other personal use.

Student Loan

A student loan is an alternative source of fund for education especially to those students who are in higher education. Students apply for a student loan to pay their tuition fee. Other countries have a pay-now, study later program to help an individual in their education.

There are other types of loan that you can choose to provide your financial needs. Banks are also one of the top leading company in the industry. However, there are instances that it takes time to process the application loan. For an instant and cash loan, there are online loans that serve as a credit broker to help borrowers find a lender. It takes just five minutes after submitting the loan application online. Other online loans would transfer instantly the cash you need after a thorough examination of your application. Nevertheless, not everything online is legit and trusted. You must know the online site that you visit and seek some reviews for your references. It is good to be informed and classify the loans you want to apply. Borrowing money is not always bad as long as it is done responsibly and for the right reason. We must also consider that applying for a loan incurred an interest. The interest rate depends on the loan that you apply. It is a must that we should pay our loan on the loan period to avoid any history of bad credit.