Applying for loan has become a way of life for most families today. For one reason or another, it seems that having a substantial earning is never enough to cover some of the family’s daily expenses. Because of this, BORROWING money by an individual from a financial institution (like a bank) or a MONEY LENDER has become a common occurrence today. There are various types of loan available in the market today and each one is supposed to be tailored fitted to the individuals that need them. However, study shows that there are four major types of loan that is commonly availed of by individuals today. These types of loans are PERSONAL LOAN, Mortgage, Automotive and Educational loans.
Personal loans are those that are obtained from various financial institutions like banks, or credit union. This type of loan is usually availed of mostly by individuals and the most common reason for the loan is to cover an unexpected financial crisis. However, for some individuals, a personal loan is availed of as capital to a small business venture.
Mortgage loan normally availed of to fund the purchase of a new home or to finance a major home repair of an individual. A mortgage loan can also refer to the property as being put up as collateral for a loan amount that will be used for other purposes by the borrower. This type of loan usually entail large sum of money and is usually long term. This is the reason why strict and specific requirements are demanded by the lender from the borrower even before the former would look at the latter’s application. Mortgage loan is one of the hardest types of loan an individual can avail of.
Automotive and Educational Loan
The necessity of owning a car and the need for a better education for children have placed car and educational loans as one of the most availed of by many families today. Transportation and education today is never a luxury but more of an investment and this is primary the reason why most individuals would not even give a second thought of not BORROWING just to cover the need for this particular expense.