Loan Guide: Taking A Look At The Different Types Of Loans

Due to the large number of loans available in the market, many people are confused what different loans mean. To help you out here are some of the common types of loans and what they mean:

Home Improvement Loans

These are loans that you take in order to raise the value of your home to sell it at a higher price. It’s usually an unsecured personal loan; therefore, you don’t have to secure it against an asset such as your house. In most cases, it’s short-term (you repay it within 12 months-5 years).

While the loan is great as it helps you to improve your property within a short period of time, it tends to attract high interest rates; therefore, you should do your calculations and ensure that you can afford before you take it.

Bridging Loans

These ones help you in completing purchase of property before you sell the existing home. They are designed for landlords and amateur property developers; however, wealthy and asset-rich borrowers can also borrow them. Although, the loan is great as it “bridges” the gap, it tends to attract very high interest rates. It also attracts many overhead costs.

To get the loan you should get it from an FCA (financial conduct authority) regulated broker. The broker will not only advise you on the best bridge that is ideal for you, he will also advise you on other options that are available for you.

Car Loan

This is a self explanatory loan as it’s very common with many people. It is the loan that you take out to pay for a car. There are many financial organizations offering the loan and all you need to do is to research and find the best organization to work with. The repayment period varies from 3-5 years; however, shorter and longer terms are available.

You should note that the amount that you get depends on your credit rating; therefore, for you to have an approximate value of the amount that you will get you should check your credit rating with a credit reference agency.

Conclusion

This is a guide on the different types of loans in the market. Before you take any loan always ensure that you can afford it. As mentioned before, there are many lending institutions that have different interest rates and repayment periods. You should always do your research and find the best institution for your situation.