The most important types of loans
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| The most important types of loans |
Classification of loan types involves determining the quality of the loan based on the credit history, the quality of the collateral and the probability of repayment. The result can then be applied to the loan portfolio. Banks often develop their own rating measures that include 12 categories ranging from Of the risk, and to the "low" or "doubtful" level, suggesting that the loan is likely to be uncollectible, as well as the loss, indicating that the recovery is likely to be negligible. They are assigning their own grades to a sample of a portfolio Bank loans, and when assigning a degree to obtain a loan, the loan examiner examines the documents, guarantees and financial statements of the borrower. [1]
Types of loans
Companies or individuals often need to borrow funds to finance certain activities, such as investing in businesses and various institutions, or to spend a certain financial need by individuals or a physical requirement such as cars and others. Some of the most important types of loans are in any financial institution:
Credit Cards
Credit cards are used to cover daily expenses, such as food, clothing, transportation, small household repairs, etc. The interest charge is applied when the monthly installment is not paid in full, and the average credit card rate is around 15 percent, but can be low in case Temporary introductory offers, up to 30 percent or more, depending on the customer's payment history and credit score.
Personal loans
This type of loan is good for those who wish to reduce interest rates through finance companies under certain guarantees such as guarantors, or by transferring the monthly salary in the case of banks. Like other loans, the terms of the personal loan depend on the customer's credit history, Personal expenses have no specific purpose, this makes them an ideal choice for people who have outstanding debts, such as credit card debt.
Mortgage loans
Mortgage loans are a type of loan given by banks or finance companies to allow customers to buy houses that they can not pay in full, or to lend to joint stock companies or real estate companies to implement multiple real estate projects. These loans have little interest rates.
If you are looking for mortgage loanse
Small business loans
These loans are granted to small businesses and aspiring entrepreneurs to help them start or expand businesses, under the name of Microfinance that offers a variety of options according to the needs of each company.
Education loans
In this type of loan, applications are made to university students and their families to help cover the costs of higher education. There are two main types: university student loans and private student loans, typically with lower interest rates and more favorable repayment terms for borrowers.
Auto Loans
Such as mortgage loans, car loans are linked to information provided by the client such as private property, and this type of loan is advertised by a bank or by a car dealership directly, but it should be known that the loans provided by the agent may be more appropriate, unless They are often associated with higher interest rates and more costs in the end.
Other types of loans
There are many types of loans, the most important of which are mentioned, but there are other types that depend on several classifications according to the applicable financial rules and standards, and also according to the standards of the central bank in each country.
• Borrowing from retirement and life insurance.
• Consolidated loans.
• Cash advances.
• Major shareholder loans.