Next, we show the main characteristics of the different types of loans.
Credit line. This type of loan is associated with a card that the customer can use freely and to which the entire amount consumed is charged. The expense that the card owner can make is limited after agreement with the bank. The return of the amount involves some interest that must be paid depending exclusively on the amount that the user has spent. This represents a great advantage for the utility and the lower interest rate that this system has with respect to other financing methods.
Installment loan. It is the best-known form of the loan according to which the creditor entity, whether a bank, a cash or any other, enter the amount of money in the applicant’s account and it has a specific period to pay the fees.
This type of quick loans is divided into several types, in turn, depending on the use made of the borrowed money. The usual thing is that the money is requested to achieve objectives, such as cleaning up accounts or acquiring inventory. The payment terms are agreed according to the time necessary to achieve the objective and, due to the lower number of installments, there is less interest.
Long-term loans They are those that last more than a year and are requested to acquire real estate or to increase the production capacity of companies. Therefore, the repayment term is much greater than the rest of the loans. In the case of companies, it is the profit generated by the investment that pays the loan.
Loans by purpose
In this category there are several types of loans, the most common being:
- Consumer loans
- Student loans
- Loans for homes
- Personal loans
- Loans for companies
- Loans to buy cars
- Loans to reform the home
Each of these loans is designed to fit the needs of a specific client profile. Therefore, each of these loans has different terms and amortization terms. These loans allow many people to achieve the objectives that are proposed and that – otherwise – could not be carried out.
In conclusion, there is a loan for each type of client and for each purpose. To find the loan that best suits your profile and needs, you should only analyze the types of loans that exist. All the characteristics of the loan will depend on your choice, from interest to the repayment term.