Different Types Of Loans

There are various different types of loans but the important question is the purpose of the loan,
your purpose decides the criteria for your loan approval.
Ex: If you apply for a personal loan to build a home you’ll be provided but the interest rate is higher,
If you mention the purpose of the home loan while applying they will allocate you the loan under
that umbrella which services your purpose at a less interest rate compared to a personal loan.

There are different types of Loans but all of them fall under these criteria :

1. Secured Personal Loan
2. Unsecured Personal  Loan 
3. Student Loan
4. Auto Loan
5. Business Loan

 

1. Secured Personal loan:

   A personal loan can be applied for multiple reasons it can be either for your wedding,
   family emergencies, purchase of electronic appliances be whatever it may you apply for personal
   but to what extent is the main question?
   As the name of the loan itself represents a secured loan means a source of security is needed to provide for getting a loan.
   A customer who is applying for a loan need to provide a source of security while applying for a loan it may be a property,
   or Fixed deposit, or a person in the form of surety, etc.,
   The bank will recover the loan amount in case the payee is defrauding the loan payment.

2. Unsecured Personal  Loan:

   An unsecured personal loan is a form of personal loan wherein there is no security required,
   They are provided on the basis of their salary statement or on the position of the person in society.
   Ex: If you are a manager in an XYZ. a company with a salary of 50000rs per month your salary statement/track records of the previous loan are taken into consideration and a loan amount will be allocated to you in form of a loan.

3. Home Loan:

   Owning an own house is everybody’s dream, but the cost of purchasing a property is getting higher and higher every day.
   we are unable to afford a house on our income level, that is when a home loan comes into the picture,
   they provide you the means of financial assistance to buy your dream home.
   which in return you’ll be paying a fixed rate of interest for a specific period of time.
   each and every bank have there different policies for providing the loans and different rate of interest as well.
   A home loan comes into various categories such as :
   a. Purchase of property
   b. construction of property
   c. Renovation of property

4. Student Loan:

   A loan that is taken for the intention of completing your education qualification is known as an education loan/student loan.
   The loan amount will not be provided to the student it will be directly, but will be paid to the educational institution in the name of the student as per college instructions.

5. Auto loan:

   Auto loan means a means of loan for the purchase of your desired vehicle,
   it may be either new or used the loan amount is decided on the basis of your eligibility.
   The loan amount is provided on the basis of your eligibility or on your required amount whichever is less.

6. Business Loan:

   A loan applied for starting a new business venture or for expanding a pre-existing business is known as a business loan.
   It may be to either full fill your short-term financial settlement or for purchasing new equipment,
   you can directly take the money or ask the bank to set up the new equipment for you on your behalf.

conclusion:
All the above loans are provided on the basis of your Cibil score, although there are various types of loan identifying
the purpose plays an important role in applying for a loan, however, the criteria and interest rate may vary
from bank to bank but the eligibility almost remains the same.