TYPES OF LOAN:
There is no doubt that every common man needs to take out a loan to fully fill their needs. Loans have become an essential part for every common man. Some borrow money for business, personal things, education, home, or vacation etc. because no one has enough money to fill everything they want, so they take out a loan according to their need. like this. There are some different types of loans that are provided by financial institutions or banks. So let’s explore it.
VACATIONS LOAN:
Everyone needs to go on vacations once in a while but sometimes there’s not enough money so in that case people take vacation loans. While a vacation loan might allow your dream trip to happen sooner, it’s always smarter to budget and wait until you can afford to pay for your getaway with savings. A vacation loan is related to an unsecured loan that you can use for travel purposes. Vacation loans come under the personal loan but some lenders advertise specifically as a vacation loan. You can use it for traveling purposes as it comes under the personal and you can travel anywhere you want.
The good thing about a vacation loan is that no collateral or security is required to get in it. As I said earlier, the vacation loan comes under the personal loan which means you have to pay monthly installments which also mean that you’ll have fixed monthly payment. So the amount you will be paid, it would be the same for every month. Apart from it, the rate of interest is often low in the personal loan and it depends on your professional profile. Vacation loans can be availed by salaried individuals or self-employed professionals.
GOLD LOAN
A gold loan is a loan that provides someone to buy gold and use it for personal things. Gold loans require you to pledge gold jewelry or gold coins as collateral. Gold loan generally used for short term needs and short repayment tenor. The loan against gold is a secured loan where gold is placed as security or collateral in return for a loan amount that corresponds to the per gram market value of gold on the day that the gold has been pledged.
Gold loans are also used for personal things, and common people in India buy gold for married purposes or for saving. As we already know that the price of gold always increases and decreases, and in this term it might be very helpful to use this in case of an emergency.
HOME LOAN:
Having your own house in today’s time is very important. Sometimes you wish to purchase your new house but do not have enough money, and in this situation you have to move your eyes towards the home loan. Home loan has become the essential loan nowadays. It provides you with financial support and helps you to buy your dream house.
The reason that everyone prefers this home loan is because it has longer tenure like 5-10years and also has a low interest rate. Your credit score is checked before the loan request is approved by the lender. If you have a good credit score, there is a fair chance that you will be able to enjoy lower rates of interest with your home loan.
LOAN AGAINST PROPERTIES:
Loan against properties (LAP) is one of the common forms of secured loan. You can pledge any residential, commercial and industrial property. LAP Is a loan which you avail by keeping your commercial/regimental property as a collateral and this loan is also known as a secured loan. The security in this kind of loan is the property owned by the person who is applying for it.
The value of your property is not the only criteria for banks to decide whether you are eligible for the loan or not. The lenders often look into your income details and professional profile and other aspects before coming to disbursement. So make sure you have good knowledge in it and a good professional profile because these are the basic things that lenders check.
VEHICLE LOAN:
Vehicle loan is a loan that helps you to buy your own vehicle for your personal use. By this loan you can purchase any vehicle according to your need. Everyone wants to own their personal vehicle for different purposes like for business purposes to use the transport.
This amount you borrow under this loan type helps you to purchase any vehicle you want. But if you do not pay the installments on time and clear your debt, the insurer will take your vehicle to recover the loan amount. So you have to be aware of it.
EDUCATION LOAN
Nowadays to get higher education you also have to pay a high fee, to get into a better university, school or college and the fee of these educational institutions always require a high amount of fee. And some students who want to get higher education who don’t have enough money, take advantage of this educational loan that provides any students to submit their fees. . It can be availed for courses in India or abroad. It can be taken for a wide variety of recognized courses which are either part time or full time. They cover vocational courses as well as undergraduate and postgraduate courses.
This is a beneficial loan for any student because this loan doesn’t require much paper work and it also has a low interest rate which helps any student to pay back to the financial institutions.
CAR LOAN
This loan provides you to purchase your dream car, and once you own your dream, life can get easy. A car will remain as your asset and it is going to be one of the biggest investments that you make. A car loan helps you to pave the path between your dream of owning a car and actually buying your car. It is good to have a high credit score when you apply for a car loan. The loan application will get approved easily and you might get a lower rate of interest associated with the loan.
So these were the types of loans, and different loans had a different rate of interest. Before borrowing the money from financial intuitions , you must read its terms and conditions and also have enough knowledge about it.