The popularity of loan products has been increased for last two decades as an important economic necessity. Several types of loan products are designed to tailor to personal and business needs of individuals. Ranging from business loans to student loans and personal loans, financial loans are in huge demand as they provide the only solution of financial needs of most people and businesses.
Here are some common types of financial loan products available in the market.
- Signature Loans
As name suggests, this type of loan is granted against the signature of the person who is applying for a loan. The process requires the borrower to sign on a promissory note assuring that he would repay the loan in a certain time period. The amount of time for signature loans is known as “loan term and can be from 6 months to 5 years. Signature loans are given based on a certain criteria and good credit history of the borrower. The qualifying parameters for each signature loan vary from case to case, for example, some loans may need the applicant having good credit to show the lender for underwriting the purpose of loan and the amount required etc. Usually, signature loans have a lower interest rate than other loan products like title loans, PayDay loans etc.
- Credit Card Loans
Credit card loans are quick and more readily available. This type of loans is given on least or no requirements. The drawback of certain loan types is that it involves a higher rate of interest and other fees to get the access to the required funds.
- PayDay loans:
Payday Loans are one of most popular loan types available to general public. Also known as Cash Advance Loans, this type of loans comes with least requirements for loan approval. Even a borrower with bad credit can obtain a quick and instant loan by providing proof of income, identity and a verified account to secure money..
- Wedding Loans
It’s a new type of loan that craves out a role for the lenders, and fulfills the requirements of rapidly increasing costs of weddings. Provided that the estimate budget for weddings can range into six digits, many people need a personal loan to provide a proper wedding. Usually, wedding loans are secured with the help of assets for guarantee or can also be termed as unsecured loans such as signature loans to obtain the required money. Not all wedding loans have the same criteria for qualifying for the loan as it’s usually based on the required funds and financial status of the applicant.
- Logbook Loans
This is relatively a new type of financial loans with no credit check. This loan is granted against the logbook or registration papers of a vehicle. The borrower submits the original logbook or relevant documents to the lending institution against the loan he is borrowing. This assures that borrower’s vehicle can be sized by the lender in case if he doesn’t repay the loan within given time period. Though, logbook loan is a quiet popular loan type because you get instant cash, it has several negative features such as high rate of interest and unfair practices.