List of 7 Loan Types & the Specific Purposes of Each
LOAN TYPES – Here is a list of seven(7) types of loans and as well as the specific purposes of each type of loan.
Undeniably, one(1) of the possible solutions with regards to problems about the finances is applying for a loan. A lot of people have considered it most especially during emergency situations.
Loans are offered by lending companies and as well as the different banks in the Philippines. Each lending firm or bank offers a wide variety of loan types to the public or to a targeted group of people.
There are actually a lot of loan types. In this article, we will discuss seven(7) of the major types of loan and as well as the specific purposes of each.
LOAN TYPES + PURPOSES
1. Mortgage Loan
Based on Debt, this loan is for the purpose of purchasing a home. It is also called as Home Loan. It has the lowest interest rates but you should continue to pay for the monthly amortization to avoid house foreclosure.
2. Student Loan
This loan is intended for students. They also come with low interest rates and are granted for the purpose of assisting the college students in their educational expenses.
3. Auto Loan
The Auto Loan is the type of loan for those who want to acquire their own cars. You may apply for this loan in the purpose of buying a brand new or a second-hand car. Instead of paying at the provider, you will be paying for it at the lending company or bank.
4. Debt Consolidation Loan
Based on the article, this type of loan is open for those who want to pay off all their debt and just pay for a single loan. If you have an outstanding personal loan and auto loan, you may apply for this so you won’t have to separately pay for your loans.
5. Personal Loan
The Personal Loan is the type of loan with the most flexible purpose. Most banks are offering it. You can use the fund for house renovation, travel, paying of debt, etc.
6. Payday Loan
One of the loan types with short terms is the Payday Loan according to the article. It is for the purpose of bridging the gap until the next payday and paychecks are utilized in this type of loan.
7. Business Loan
Are you planning to put up a business but have no money for the initial capital? You may apply for a business loan to lending firms and banks offering this type of loan. It is for the purpose of financial assistance to aspiring businessmen/women.
