Understanding Different Types of Loans

Explore the various loan options available and their characteristics.

Personal loans are a common type of loan that can be used for a variety of purposes, such as debt consolidation, home improvements, or unexpected expenses. They typically have fixed interest rates and repayment terms.

Mortgage loans are specifically designed for purchasing real estate. The property being purchased serves as collateral for the loan. Interest rates and terms can vary depending on factors such as credit score and the length of the loan.

Auto loans are used to finance the purchase of a vehicle. Similar to mortgage loans, the vehicle is the collateral. Lenders may offer different interest rates and repayment options based on the borrower's creditworthiness.

Understanding the differences between these types of loans can help you make informed decisions when considering borrowing money.