Types of loans

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Financially speaking, a loan is a form of debt characterized by an amount, rate and payment date. Basically a loan can be seen as money renting. Most loans require the borrower to pay a monthly sum back. Loans have evolved a great deal in the last years, since more and more people with different needs take them. As a result there are many different types of loans out there. The most common types of loans are:

Secured Loans

 

This type of loans is characterized by some form of collateral asset that the lender will receive if the borrower fails to pay the loan back. The most common asset that is pledged is property (apartments, houses) or cars. The most common example of this type of loan is a mortgage loan. This is used to buy real estate properties using the money borrowed. In this case, the apartment or house belongs to the lender until the borrower pays the money back. If he fails to at any given point, the property will go the lender and he will also keep the money he got until then. When a car is the object of a loan, is called and auto loan. This type of loan is considerably shorter, and just like a mortgage, the car is used as a collateral asset. The duration of it is usually the same duration a car is expected to be useful. Depending on whether there is a dealership acting as a middle man between the bank and the buyer, auto loans split up in 2 main types of loans: direct or indirect.

Unsecured Loans

 

This type of loans does not have any security based on the borrower’s assets. Because the risk is greater for lenders, interest rates are much higher because the lender does not have any protection. This increased cost is supposed to cover the much higher risk the lender is taking in case you fail to pay the loan back. If this happens, the lender must go to court and sue the borrower and then get his money back. This is why his type of loan is very expensive.

Concessional Loans

 

This type of loan is characterized by very generous conditions, well above the market. This is done either by a very low interest rate, or by allowing a period in which the borrower does not have to pay, or a mix of these 2 methods. This type of loan is very rare and is mostly seen as a benefit for employees working in a loan company, or as a help offered to poor countries.

Subsidized Loans

 

This is a type of loan in which the interest rate is diminished by a given “subsidy”. For example, the loan may not have any interest rate while the borrower is a student. This is very common, especially in the US and other modern countries. In the UK for example, students can get a free loan and after they get a job, or finish their degree, have to pay it back.

Demand Loans

 

This type of loan is the shortest loan when it comes to its duration and does not carry a fixed payment date. As far as its type goes, it can be both secured and unsecured.

Of course there are many more types of loans out there, but these are the most common. The variety of them is a direct result of our different needs.

Credit card types

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Credit card suppliers are concocting diverse types of cards focusing on distinctive classifications of individuals with distinctive characteristics and offering target particular profits. Furthermore the standard credit cards for overall population, there are gas credit cards, student credit cards, business credit cards, and so forth. These cards are extraordinarily implied for the focused on aggregation of individuals.

Standard credit cards: Almost all the credit card suppliers offer standard credit card implied for overall population. They are unsecured credit cards that are accessible to individuals without any assurance, security or contract from the clients.

Business credit cards: Many card suppliers offer credit cards for little organizations. You ought to know the utilization of business credit card in the event that you need request one. Having a business credit card could be a gigantic help to the organization in an incredible numerous ways.

Student credit cards: Students credit cards are implied for school and college people. Most card suppliers approach qualification criteria for the seekers of understudy credit card that you ought to be 18 years of age and you ought to be selected in a school or a college.

Gas credit card: With this card, you can buy gas at the pump or at the accommodation store. A few gas cards furnish reward with the buy of gas with card. You can acquire money back prizes and discounts in buys.

Travel credit cards: One such card accessible is air transport miles prize credit card. It is offered in organization with a credit card organization and an aerial shuttle organization. This card permits you to procure focuses or miles for each dollar went through with the card.

Offset exchange credit card: You can spare several dollars with the parity exchange credit cards. Some credit card offer 0% initial Aprs for six to 12 months in every transactions you make.

Credit cards for awful credit: This is an uncommon sort of credit card for individuals with terrible credit. The card organizations put a few limitations not ordinarily found on different types of cards. The credit card cutoff is lower in such cards.

Furthermore, credit card organizations are putting forth money prize cards to pull in the prospective clients. Credit card organizations are additionally giving store particular card intended to buys in the select general or accommodation store just.