Different Types Of Loans

Loan contracts come in various forms and terms. It will range from a simple promissory note between friends and family members to more complex loans such as auto, payday, mortgage, and student loans. Each loan will be governed by policies and guidelines to protect clients from unfavorable practices such as excessive interest rates. You can go to this website to read the guidelines for borrowing a loan.

Here are some different types of loans:

  • Mortgages Loan

These are distributed by banks in order to allow consumers to buy homes. This will be tied to your home. This further means that when you fail to pay it, your property will be foreclosed. As opposed to any other loan type, this has the lowest interest rate.

  • Student  Loan

These are offered to college students along with their families in order to help cover the cost of higher education. Generally, there are 2 main types of student loans – those funded by the government and those by private lenders. 

  • Auto Or Car Loan

This is quite similar to mortgages since it is tied to your property. They will help you afford a certain car.

You will risk losing the car when you miss payments. vehicle loans might be offered by a bank or by the car dealership directly.