One of the first steps to take when applying for personal loans is to determine the type of loan we need. Normally we differentiate between two types of loans, which are personal loans and mortgage loans, but in reality there are more types of loans and each one is adapted to specific needs, so it is very important to take it into account before applying for a loan..
Personal loans are the most widespread type of loan, but it is important to know that there are more and differentiate them when requesting a loan from a financial institution. We can distinguish the following types of loans based on the purpose to which the requested money will be allocated:
1. Personal loans :
This type of loan is used to finance goods without having a special guarantee for the recovery of the loan, only the assets of the person requesting the loan are taken as collateral. Within the personal loans we can make the following differentiation:
- – Consumer loans : When the purpose of the loan is to finance durable consumer goods such as buying a car, a motorcycle, household appliances or carrying out renovations at home.
- – Loans for the acquisition of vehicles : It is a consumer loan but it is usually differentiated by the great demand it has.
- – Loans for studies : Loans aimed at financing university studies, master’s, postgraduate, studies abroad… as well as material, travel or stay.
- – Personal loans themselves, which are used to finance other types of goods, usually perishable goods, such as traveling, financing health or organizing a wedding. Within this type we can highlight the loans pre-granted for their speed and efficiency.
2. Mortgage loans :
Mortgage loans are used to finance a property, but apart from the personal guarantee, the mortgage of a property is offered as a guarantee of payment. In case of not returning the loan the entity that has granted it remains with this property.
3. Quick loans :
They are a type of loans that are characterized by being loans of little capital and term of return and that are granted without making a personal study, very quickly and anonymously. It is the fastest and easiest way to get money, although the interest rates are higher. There are two types of operations that can be performed that are mini-credits, normally up to € 600 and fast credits up to € 10,000. They are usually used for urgent financing or when other types of loans are not granted.
4. Loans for companies :
They are a type of loans for the financing of a company, both for the maintenance of the activity and for the creation of new activities.
Now that you know the types of loans that exist select the one that adapts to your needs and we will show you the financial entities that offer them with the best conditions.