Have your eyes set on that flat you checked out last week? Want that lovely red car to be yours? Got a wedding coming up in the family? Need something else which is currently beyond your means? Thankfully, these days, when the need or the want get bigger than your means, it is still possible to go ahead and fulfill your dreams. Say hello to the big, bright world of loans, a safe and easy way to make financial arrangements for the present requirements, and pay the money in installments later.
Loans are of many kinds. And however easy and hassle-free a loan might seem on the face, they almost always come with a catch. Sometimes, a loan requires you to keep an asset (mostly a property) as collateral to the loan amount, that is, if you are unable to pay the loan amount by the stipulated time, the bank or the financial institution reserves the right to take away the collateral asset in order to extract its’ payback.
It is also a common practice to mortgage the same property for which the money is being loaned, by giving the loan provider conditional ownership of the property, to be applicable if the borrower fails in his payments. These loans are called Secured loans. Home loans generally belong to this category of loans. Secured loans can be subsidized, or non subsidized. In the first case, the loan does nor gain interest before the borrower starts paying it, and in the second case, the loan starts gaining interest from the very first day of its’ issue.
Not all loans, however, require you to mortgage a property or an asset. They generally come with their own bunch of conditions, and a high rate of interest is almost always one of them, but they are also convenient and much easier to get assigned. These are called unsecured loans. Personal loans belong to this category of loans.
There is also a third kind of loan, which is specifically a short term loan, and is called Demand loans. They do not have a fixed date of payment and have floating rates of interest which vary according to the prime rate. The bank or the financial institution that has provided the loan reserves the right to call the borrower for payment any day within the fixed stipulated time of no more than 180 days. Depending upon the amount of loan and the loan provider, these can be secured or unsecured.
It’s very easy to get a loan these days, and it’s easier to get stuck in one, way deeper than you can handle. Make sure before you narrow down on a loan you want to go for, you complete your research about the ground facts of that particular loan. Seeking help from online quotes website would be very useful in giving you a fair idea of the available loan options for you in the market. Look carefully before you leap, and be safe in your world of dreams!
I am Arun Singh from delhi. I am a content writer and now days i am writing articles for consultmoney.com. Select consultmoney.com as a Financial Consultant and get online quotes on Loans, Life Insurance, NRI and Banking Products.