Types of loans according to their purpose

Loans can be classified in many different ways. Hence, the type of loans is very varied. In this article the experts of Lenders have wanted to offer readers a description of the types of loans according to their purpose . Would you like to know which ones are they? In that case, keep reading.

Main types of loans according to their purpose

In this space you will find a classification of the types of loans according to their purpose. Remember that it is not a unique classification and that you can find others in relation to different variables. As for example the expiration term.

Mortgage loans

Without a doubt, mortgage loans are the most frequent in Spain . Are those that are requested to buy a home . In these cases, the property acquired is used as a guarantee. These are long-term loans that can reach up to 40 years. The interests are quite tight and depend on whether the client bets on a fixed, variable or mixed mortgage. The payment installments are usually monthly and include a series of mandatory linkages with the bank for the loan to be granted.

Consumer loans

Consumer loans have become very fashionable in recent years. It is a financial product offered by large commercial chains . As for example Carrefour or Media Markt. These loans are used to finance a good or service . That is to say, that the client does not receive money in exchange but obtains the good that he needed. They are useful for buying appliances and even for returning to school.

The return period is usually not very high and usually includes a short period of partial lack in which there is no interest to pay.

Personal loans

Personal loans are one of the most frequent modalities according to the purpose. These types of credits are requested by the client when a specific financial need has to be met at a very specific moment . For example, having to make a repair or a reform that did not have or could afford an unexpected expense.

The characteristics of personal loans vary depending on the type of credit institution that is approached. The conditions offered by a bank will not be the same as a private equity company or a lender.

The loans for studies

There are many young people who lack sufficient economic capacity to be able to develop their studies and improve professionally. In this case, scholarships and family financial aid are usually necessary methods to face this stage of life. However, you can not always count on these two options. Hence, a good method to fix all the financial issue related to the studies is the loans for studies.

Although these are the most popular lines of credit in the rest of Europe and the United States, little by little they are becoming popular in our country . These loans are characterized by having very advantageous economic conditions for students . They usually include long periods of grace, long repayment terms and very low interest rates. Which allows the young people to be able to face economically their student stage. Either to do a postgraduate, a master’s degree or to pay the tuition of the university.

Loans for companies

Although it is a product aimed exclusively at businesses, we want to make a brief description of these loans. The loans for companies are one of the methods most used by companies to have liquidity . Until a few years ago, banks were practically the only credit institutions that granted them. However nowadays, and due to the crisis and the cut of financing by the banks, there are other companies that offer them. For example those of private capital or even crowdfunding or crowdlending. There are short, medium and long term.