The Most Common Types Of Loan

Many people resort to loans to get enough funding for business. Whether you want to start a new business or expand an existing one, applying for a loan can be a very smart thing to do. However, a business loan is actually just one type of loan you can apply for. There are many other types of loan offered by most financial institutions. Check out the most common types of loan below:

- Secured loan. This is the type of loan in which the borrower provides an asset as collateral. Among the best examples of this type of loan are car loans and mortgage loans.

- Unsecured loan. This is the type of loan that does not need any collateral. The borrower is still subject to a background check, though, before getting an approval. Some examples of this loan are credit cards, personal loans and corporate bonds.

- Demand. This is a short term loan with a floating interest arte depending on the prime lending rate.

- Subsidized. This type of loan has a reduced interest. One very good example of this loan is college loan with an explicit subsidy.

- Concessional. This is also known as a soft loan. One example of this is the loan granted by foreign governments to help one country be more established financially and economically.

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