Helping someone financially at the time of their need is called loan. Today there are many types of loan, in this article we will specially talk about those loans which is given by the banks or the financial institutions. Every time we do not have enough cash to do certain work, that’s why we need to take help from the financial institutions as every time our friends or relatives cannot afford to help us financially.
Some loans are very good And some are bad loans. While you take a loan from the Banks or financial institutions, you need to give them a certain amount of interest upon the loan. There are many type of loan available in todays market. Hence in this article we will be going to talk about the different type of loan you should know about. Basically there are two types of loans. One is secured loan and another is unsecured loans. So in this article we will be going to talk about only these two loans as they are very popular.
1. Unsecured Loans
There are a lot of loans where a user get loan from banks or NBFCs without keeping any property under debt. They do not have to worry about their personal asset while taking loan. Hence people like to take unsecured loans but there is a catch in unsecured loan you need to pay higher amount of interest rate up on the loans.
Unsecured loans is provided by the company only to those customers who have a great credit score as before giving unsecured loans a customer must prove themselves trustworthy. A bank must have enough trust to handover their money to these customers.
2. Secured Loan
Second topic is secured loan, as by name you can see that this type of loan is totally secured by the debt. Here the banks take some assets and provide 60 to 70% of the asset value to the customers. The banks of the financial institutions do not have to worry about the credit score of their customers in this type of loans.
This is because they are not risking their money by giving the money to the customers.Usually the Sa prices are far more higher than the money given by the banks or financial institutions. So as the unsecured loans have certain amount of risk associated with it, it had higher rate of interest. But on secured loans you don’t need to pay search higher amount of interest upon your loans.