8 Different Types of Loans You Should Know

Personal loans play an important role to cope up with high-end lifestyle today. Monthly earnings, savings, insurance etc. are not enough to fulfill dreams and aspirations of different age groups. Hence, financial institutions and NBFCs have introduced different types of loans to meet urgent financial needs. Secured and unsecured loans are two main loan categories that maximum borrowers trust nowadays.
 
Furthermore, there are different types of loans such as personal loan, home loan, car loan, education loan, consumer durable loan and many other types of loan generated by public and private money lenders. Factor like interest rate, tenure and eligibility criteria vary from lender to lender. So before applying for a loan you need to prioritize your needs and wants, as lot of difference prevails between needs and wants.

To Help You Get Started, Here are 8 Different Types of Loans that Borrowers Should Be Aware Of:

1. Personal Loan: A personal loan is an unsecured loan demanding no collateral or security against loan. It usually has flexible repayment tenure between 6-24 months. A personal loan supports various financial needs such as:

• Home improvement
• Wedding expenses
• Medical bills
• Debt consolidation
• Travel or vacation plans

2. Home loans: are secured loans that requires collateral against the loan amount. Moreover, home loan allows low interest rate and holds a floating nature unlike a personal loan. The home loan tenures are longer that lowers your EMI’s for easy repayment without disturbing your monthly budget. A home loan gives you a sense of accomplishment by buying your own home with maximum tax benefits. 

3. Education loan: helps in higher studies abroad invarious subjects. It guarantees a better future for students wanting to travel in specific countries to accomplish professional courses in foreign universities.

4. Consumer durable loan: is a loan option for the purchase of high-end electronics and home appliances like refrigerators, washing machines, air conditioner, microwaves, smart phones or furniture. You can get a loan up to 100% of your purchases depending on the lender.

5. Pension loan: is a type of a personal loan that pensioners can use to meet their urgent financial needs. Senior citizens or those in an age group above 50 years can rely on pension loan to support financial emergencies or unforeseen family obligations.

6. Vehicle Loan: is available for either two-wheeler or four-wheeler vehicles. Fulfil your dream of owning your favorite bike/car through vehicle loans. These loans are also applicable to acquire second hand vehicles.

7. Business Loan is an unsecured loan like a personal loan. It is intended for business purpose with a low interest rate and monthly installments are fixed over the tenure. The purpose to avail the business loan is to meet urgent needs of expanding business or make production upgrades.

8. Gold Loan: Since age old times, gold is considered to be an asset that is of use in times of financial crisis. A gold loan is offered against a gold jewelry or coins as collateral. The sanctioned loan amount is calculated on basis of the gold’s value. Short term needs can be fulfilled via gold loans.
 
These 8 different types of loans are very important and everyone should know that these loans are practically changing lives of people. Moreover, the personal loans are one such loan type that is versatile and provides the comfort of instant availability via instant personal loan apps.
 
Availability of different types of loans has made life simpler and stress free to an extent. It is entirely up to the borrower to be sure of loan repayment for sustaining financial stability and credit score.

Also Read: What is the Difference Between Loan Write off and Loan Waive off? 
 
HeroFinCorp is a handy instant personal loan app available on Google Play Store. Avail a variety of loan types via HeroFinCorp to manage your financial urgency timely. The paperless documentation makes loan approval faster through HeroFinCorp.