A bank loan is one that through a contract the financial institution grants a quantity of money to the client. The customer has the obligation to return it within the previously established terms. Usually, the amount of money lent by the bank is added interest that must also be returned. These interests will vary depending on the type of loan requested.
A bank loan, therefore, is a commitment that should not be taken lightly. In order to obtain the best profitability, it requires a prior knowledge of its characteristics. Knowing what types of loans exist is fundamental to be able to request our financial institution which best suits our needs.
Types of loans
There are different types of bank loans, the best known are personal loans and mortgages. The loans to acquire, remodel a home, of the so-called mortgage, tend to be long-term and with an interest rate that is mostly constant and established by the National Government. This in order to facilitate access to housing.
Also, mortgage loans, in addition to involving amounts of money higher than personal loans, have a real guarantee for the bank. If the client does not return the loan money, the bank can have the mortgaged property sold to recover the debt. You can also become the owner of the financed home.
Unlike mortgage loans, personal loans are used to finance specific needs at a specific time. The amounts requested are usually small, most of the time to make a trip, to make an unexpected repair, to defray the expenses of a wedding, among others. In turn, this type of loan allows building a client’s credit history. This record will be positive or negative depending on your payment compliance. Personal credits can also be consumption or for study.
Consumer loans are those that are used to finance personal property. These goods can be like a vehicle, or some domestic appliance. It is important to note that both personal loans and consumer loans are usually smaller loans. The return period is relatively short.
Some banking entities also offer the credits for study. These are loans aimed at students to finance university fees, postgraduate studies or trips abroad. They usually have a cheaper interest rate than personal loans.
Loans defined by Aval or Bail
Loans also differ depending on whether they have a guarantee or guarantee to back the loan. Having an endorsement when requesting a loan is a way to guarantee compliance with the economic obligations acquired, facilitating in most cases the procedures for those who lack a credit history.
This type of endorsement is better known as “guarantors”, which is nothing more than the commitment assumed by a third party before a bank in favor of the one receiving the loan, responding in case of breach of its patrimony. That is why to be a guarantor you have to fulfill a series of characteristics, among others:
- Be of age.
- Have solvency The guarantor must have a higher income than the obligations acquired with the bank by the loan applicant.
- Stable income In addition to solvent, the person who acts as guarantor must have their income guaranteed as far as possible.
- Have property free of encumbrance. This requirement is especially important if it is about mortgage loans. The guarantor could cover the loan conditions with his own home.
Having an endorsement is always a sign of trust. This greatly increases the likelihood that the bank will approve the requested loan of whatever kind. It should also be remembered that if the owner does not pay the loan, the guarantor must pay the debt with his present and future assets.
However, the request for a product of this type can not be made in a hurry. Before requesting a bank loan from a financial institution, it is advisable to find out what types of products the market currently offers and which is the most convenient.