Types of Loans
Loan types vary because each loan
has a specific intended use. They can vary by length of time, by how interest
rates are calculated, by when payments are due and by a number of other
Student loans are offered to
college students and their families to help cover the cost of higher education.
There are two main types of student loans: those offered by the federal
government, and those offered by private lenders. Federally funded loans are
better, as they typically come with lower interest rates and more
borrower-friendly repayment terms.
more about student loans.
Mortgages are loans distributed
by banks to allow consumers to buy homes they can't pay for
upfront. A mortgage is tied to your home, meaning you risk foreclosure if you
fall behind on loan payments. Mortgages have among the lowest interest rates of
more about mortgages.
mortgages, auto loans are tied to your property. They can help you afford a
vehicle, but you risk losing the car if you miss payments. This type of loan
may be distributed by a bank or by the car dealership directly. While loans
from the dealership may be more convenient, they often cost more overall.
more about auto loans.
Personal loans can be used for
any personal expenses and don't have a designated
purpose. This makes them an attractive option for people with outstanding
debts, such as credit card debt, who want to reduce their interest rates by
transferring balances. Like other loans, personal loan terms depend on your