A bank loan is one that, by means of a contract, the financial entity grants an amount of money to the client. The customer has the obligation to return it within the previously established deadlines. In the usual way, interest is added to the amount of money loaned by the bank. These interests will vary depending on the type of loan requested.
A bank loan, therefore, is a commitment that should not be taken lightly. In order to obtain the best profitability it requires prior knowledge of its characteristics. Knowing what types of loans exist is essential to be able to request from our financial institution the one that best suits our needs.
Types of loans
There are different types of bank loans, the best known are personal and mortgage loans. Loans to acquire, remodel a home, of the so-called mortgages, are usually long term and with an interest rate that is mostly constant and established by the National Government. This in order to facilitate access to housing.
Likewise, the mortgage loans, in addition to involving amounts of money higher than those of personal loans, have a real guarantee for the bank. If the client does not repay the loan money, the bank can sell the mortgaged property to recover from the debt. You can also become the owner of the financed home.
Unlike mortgage loans, personnel are destined to finance specific needs at a given time. The requested quantities are usually small, most of the time to make a trip, to make an unexpected repair, to cover the expenses of a wedding, among others. In turn, this type of loan allows to build a credit history of the client. This history will be positive or negative depending on your payment compliance. Personal credits can also be consumption or for study.
Consumer loans are those used to finance personal property. These goods can be like a vehicle, or some appliance. It is important to highlight that both personal loans and consumer loans are usually smaller loans. The return period is relatively short.
Some banks also offer credits for study. These are loans aimed at students to finance university tuition, postgraduate studies or trips abroad. They usually have a cheaper interest rate than personal loans.
Loans defined by Guarantee or Deposit
The loans are also differentiated depending on whether they have a guarantee or guarantee to support the loan. Having a guarantee when applying for a loan is a way of guaranteeing the fulfillment of the acquired economic obligations, facilitating most of the time the procedures for those people who lack a credit history.
This type of guarantee is better known as “guarantors”, which is nothing more than the commitment assumed by a third party to a bank in favor of the one who receives the loan, responding in case of default on their assets. That is why to be reliable, a series of characteristics must be met, among others:
- Be of age.
- Have solvency. The guarantor must have an income higher than the obligations acquired with the bank by the loan applicant.
- Stable income. In addition to solvent, the person acting as guarantor must have guaranteed income as much as possible.
- Have lien free properties. This requirement is especially important if it is mortgage loans. The guarantor could cover the terms of the loan with his own home.
Having an endorsement is always a sign of confidence
This greatly increases the chances that the bank will approve the requested loan of any type. It should also be remembered that if the holder does not pay the loan, the guarantor must pay the debt with his present and future assets.
However, the request for a product of this type cannot be made in a hurried way. Before requesting a bank loan from a financial institution, it is advisable to inform yourself about what types of products the market currently offers and which one is the most convenient.