One thing you must know about the various types of loans is that, every loan – and its conditions for repayment – is governed by state and federal guidelines to protect consumers from undesirable practices like excessive interest rates.
Loan contracts comes in different kind, and with varied terms, starting from simple promissory notes between friends and family members to more complex loans like mortgage, student loans etc.
The different types of loans are not the same. This is because each loan has a specific intended use. The difference could be in length of time, by how interest rates are calculated and by when payments are due.
Types of Loans
Mortgage Loans: Mortgages are loans distributed by banks to allow consumers to buy homes they can’t pay for immediately.
Student Loans: These are loans given to college students and their families to help cover the cost of higher education.
Personal Loans: This is a loan that anyone can used for any personal expenses and don’t have a designated purpose.
Small Business Loans: Small business loans are granted to entrepreneurs and aspiring entrepreneurs to help them start or expand a business.
Auto Loans: Auto loans are tied to your property. You can use it to buy car, but you risk losing the car if you miss payments.
Other loans are Payday Loans, consolidated loans and many others.