Quick Answer: What Are The 4 Types Of Loans?

How many types of bank loans are there?

Secured and Unsecured Consumer Loans Lenders offer two types of consumer loans – secured and unsecured – that are based on the amount of risk both parties are willing to take.

Secured loans mean the borrower has put up collateral to back the promise that the loan will be repaid..

Which type of loan is best?

Most personal loans are unsecured with fixed payments. But there are other types of personal loans, including secured and variable-rate loans. The type of loan that works best for you depends on factors including your credit score and how much time you need to repay the loan.

What type of loan is a personal loan?

Personal loans are a type of installment loan. That means you borrow a fixed amount of money and pay it back with interest in monthly payments over the life of the loan — which typically ranges from 12 to 84 months. Once you’ve paid your loan in full, your account is closed.

What is the cheapest way to borrow money?

Personal or unsecured loan Personal loans typically have the lowest interest rates of any method of borrowing money, except for interest-free credit cards. You will need to apply for a loan and if you have a poor credit record you’re unlikely to get the best deals.

What are the 5 types of loans?

Unsecured personal loans. Personal loans are used for a variety of reasons, from paying for wedding expenses to consolidating debt. … Secured personal loans. … Payday loans. … Title loans. … Pawn shop loans. … Payday alternative loans. … Home equity loans. … Credit card cash advances.

What are the 4 types of loans for homes?

Here are four types of mortgage loans for home buyers today: fixed rate, FHA mortgages, VA mortgages and interest-only loans.Fixed rate mortgage. … FHA mortgage. … VA mortgage. … Interest Only Mortgages*.

What are the 3 types of loans?

Different Types of Loans ExplainedPersonal Loans. Personal loans are among the most versatile types of loans, providing funds for pretty much any purpose, as long as it’s not illegal. … Auto Loans. … Student Loans. … Mortgage Loans. … Home Equity Loans. … Credit-Builder Loans. … Loans from Friends/Family. … Payday Loans.More items…•

What type of loan is a car loan?

For most people, an auto loan means a secured, simple-interest loan for a car bought from a dealership. If this is true for you, the best way to make sure you get the best deal is to ask the dealer to beat an auto loan preapproval you got directly from a lender.

Is Gold Loan better than personal loan?

As longer loan tenure converts into higher interest cost, opting for a gold loan might be a more cost-effective option for those confident of repaying their loan within one or two years. Personal loan would be a better choice for those seeking a bigger loan amount and longer tenure.