A lån is a borrowed money in which the lender-an institution like a bank lends to an individual with an intention of getting the money back. The bank charges interest and another fee on top of the borrowed amount as payment for the loan. Loans come in handy especially when you need extra money, to meet your needs.
Types of Loans
1. Student Loan – This is a loan that is given to a student who wants money to finance higher education. This loan attracts relatively low interest and a student is required to pay the loan upon completion of the studies. The money may be used to pay school fees and to sustain a student while studying.
2. Business Loans – When starting a business or expanding an existing business is it mandatory to have capital. This capital can be obtained as a loan from a bank for a limited amount of time. forbrukslån, The interest charged on the loan varies in different banks.
3. Personal Loans – Sometimes in order to meet our personal need we may require a loan. This type of loan is used to finance different kinds of expenses that an individual may have, for example, a wedding or a trip.
4. Home loan – This type of loan is for someone who wants money to buy a house. Many young people who want to become homeowners can use this loan to make their dream come true. Again the loan depends on the bank that is lending the money.
5. Car Loan – A car loan is used to finance the buying of a car. The car that is bought by a car loan legally belongs to the lender of the loan until when the loan is paid in full.
It is important to pay a loan on time so as to increase your credit limits. Also, a legal action is taken when you default paying the money borrowed from a bank. A loan is paid through installments over a certain period of time. This installments depends on the type of loan and can be different in several banks.
Before taking a loan it is crucial to understand why you need the loan. This will ensure that a loan will be used constructively so as to meet all of your needs. Other things to consider may include:
Credit history – This is your previous record of the loans that you have secured. A good record may guarantee an individual a loan and a low-interest rate.
Interest rate – Interest rates paid on a loan are different depending on the type of loan. It is crucial to understand the amount of interest that the loan will generate so as to determine if the price paid for securing a loan.
Payment Duration – The duration of payment of the loan is important. It can help an individual to pay the loan in time to avoid penalties that arise from late payment.
When used properly a loan can help to finance extra expenses thus making life better. Always remember the day of repaying the loan so as to avoid unnecessary charges.