For smooth working of business and for meeting other monetary needs what you need is money to fulfill the needs on time. The purpose of lending is that borrowers can avail money from lenders with a promise of returning it within a specific period. A fixed interest rate is decided by the lender that the borrower must pay on the money borrowed along with the principal amount borrowed. For various needs of borrowers, lenders are offering various kinds of lending facilities that help them to meet their monetary requirements.
Usually, banks and other money lending institutes provide two types of loans that can be availed by the borrowers:
- Secured Loans: The loans that require something as collateral for securing the money borrowed by the borrower from a lender.
- Unsecured Loans: These are loans that do not require anything as collateral. Moneylenders lend money based on the credit score and history of borrowers.
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Here are a few types of lending discussed below:
A home loan is a kind of secured mode of finance. The borrower gets funds to buy or build the home of their choice. For such loans, the amount is disbursed depending on the income stability and current liabilities of the borrower. Types of home loans available are:
- Land purchase loan
- Home construction loan
- Home loan balance transfer
- Top up loan
Gold loans have a condition that the borrowers have to pledge gold jewelry or coins in the form of collateral. The amount of loan is sanctioned is a certain percent of the value of gold pledged. Usually, borrowers avail gold loans for meeting their short-term needs and have short repayment tenor compared to other loans like a home loan.
For pursuing higher education from a reputed institution the demand for an educational loan got boasted with time. The educational loan actually covers the basic fees of the course and other allied expenses such as exam fees, accommodation facilities, etc.
An educational loan can be taken for full time and the students are the primary borrowers while siblings, parents are co-applicants.
A vehicle loan can be taken for two-wheelers and four-wheelers. This loan helps to buy a dream vehicle by the borrowers. You can avail vehicle loan either for the purchase of a new one or a used one. The loan is given based on the credit score, loan tenor, etc. of the borrower.