It is a sum of money that is expected to be paid back with Interest. The act of giving money, property or other material goods to a another party in exchange for future repayment of the principal amount along with interest or other finance charges is called loan. A loan may be for a specific, one-time amount or can be available as open-ended credit up to a specified ceiling amount.
Secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral. Unsecured loans don't have asset for collateral. These loans may be more difficult to get and have higher interest rates.
Open-ended loans are loans that you can borrow over and over. Credit cards and lines of credit are the most common types of open-ended loans. With both of these loans, you have a credit limit that you can purchase against. Each time you make a purchase, your available credit decreases. As you make payments, your available increases allowing you to use the same credit over and over
Closed-ended loans cannot be borrowed once they've been repaid. As you make payments on closed-ended loans, the balance of the loan goes down. However, you don't have any available credit you can use on closed-ended loans. Instead, if you need to borrow more money, you'd have to apply for another loan. Common types of closed-ended loans include mortgage loans, auto loans, and student loans.
- Tearm loans
A term loan is simply a loan provided for business purposes that needs to be paid back within a specified time frame. It typically carries a fixed interest rate, monthly or quarterly repayment schedule - and includes a set maturity date. It is secure type of loan. A secured term loan will usually have a lower interest rate than an unsecured one.
- Personal loans
A personal loan is typically issued for a specific amount and can be used for various purposes at the discretion of the borrower.
- Education/Student loans
A loan offered to students which is used to pay off education-related expenses, such as college tuition, room and board at the university, or textbooks.
- Vehicle loans
Most people today need a loan when they buy a new or used car. And the high cost of many cars means that consumers spend years paying for their vehicles. Because a car loan is such a huge debt for most people, it pays to understand it before entering into an agreement. A car loan is a secured loan, which means the vehicle serves as collateral on the debt. If you fail to make your payments, the lender can seize it as payment.
- Gold loans
It is a form of debt financing whereby a potential gold producer borrows gold from a lending institution, sells the gold on the open market, uses the cash for mine development, then pays back the gold from actual mine production.
- Loan against Property
The individual takes the loan by mortgaging the house property. It is a Secured loan .One of the cheapest retail loans after home loans; usually about 12%-16%. Since the rate of interest is lower, frequently LAP Equated Monthly Installments (EMI) turn out cheaper. Maximum loan eligibility is determined primarily by the value of the property and income.
- Home loans
The home loan is a loan advanced to a person to assist in buying a house or condominium. Purchasing a house can be a valuable form of investment. However, it requires considerable thought and careful financial planning before taking on such a big step. If owning a house is part of your financial goal, then you'll need to know whether you can afford from your income and savings.
- Business loans
Businesses require an adequate amount of capital to fund startup expenses or pay for expansions. As such, companies take out business loans to gain the financial assistance they need. A business loan is debt, that the company is obligated to repay according to the loan's terms and conditions.