For those who require financial aid for various activities such as home renovation, business start-up or expansion or medical purposes, banks offer loan amounts.
The principal amount is charged with some rate of interest and the total sum has to be paid within a decided period. These loans differ based on the purpose, rate of interest, tenure of repayment, and collateral. Several money lenders good at personal loan in ang mo kio are available.
Discussed below are the four most common loan types.
Personal loan
This type of loan is used to fulfil various types of personal expenses such as debt consolidation, weddings, medical, vacations, etc. it is a multi-purpose loan for requirements and desires.
This loan provides loans at a lower interest rate and is based on financial history, income, etc. While lending the money the lender ensures whether the applicant can repay the amount or not. One of the notable benefits of the personal loan is its flexibility in the tenure of the loan.
Student loan
This type of loan is a helping hand for many students who wish to go for higher studies. It is famous, especially among students who want to pursue some degree in foreign universities. This loan includes the books expenses, stationeries, university fees, and living expenses.
A student loan differs from other loans in terms of lower interest rates and flexible tenure of repayment than other types of loans. This loan also differs from country to country depending on the laws.
Debt Consolidation loan
This type of loan is used to repay all the old debts. The debt consolidation loan adds all the debt together and clears it in one payment. This reduces the period of debt and the number of times the amount of debt is repaid. This loan type saves your funds by lowering the interest amount.
Mortgage loan
In the simplest term, it is a home loan taken against an immovable property such as a house, land, real estate, etc. The property works as a guarantee or security, also known as collateral, till you repay the sum amount of principal and interest.
Conclusion
As discussed, these were the four most common loan types. However, there are a lot more loan types as per the needs of the people. One can always avail of loans by checking the purpose and comparing different loan types. A personal loan is suitable for personal expenses but still, one must ensure that is what you need and its eligibility.