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Chapter: Civil : Engineering Economics and Cost analysis : Financing

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 variables.

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 variables.

 

Student Loans

 

 

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.

 

  Learn more about student loans.

 

Mortgages

 

 

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 any loans.

 

  Learn more about mortgages.

 

Auto Loans

 

 

Like 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.

Learn more about auto loans.

 

Personal 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 credit history.

 

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