What is loan, its types and how to take loan

Most of the people belong to middle class families so that they do not have enough money to do any work like building a house, buying a car, getting higher education of children, starting their own business etc. need a loan

To take a loan, people go to many financial institutions called bank lenders and there they apply for different types of loans according to their needs. Each lender has its own terms and conditions for giving loans, on the basis of which but they provide loans

To know about the loan in full detail, you have to read this article completely, so let’s start this article and know all the information about the loan.

When a person borrows money from any of the financial institutions of the bank for his needs, then it is called loan loan. The borrower has to repay the loan amount along with interest to the lender in a fixed time period.
There can be many reasons for taking a loan, such as building a house, buying a car, children’s education, business, for their personal expenses, etc. Any person takes a loan and gets a solution to the problems in his life.

Some terms used in loan

  • The amount that is borrowed in the loan is called the principal amount.
  • The rate paid as a fee for taking a loan is called the interest rate
  • A fixed time period is fixed for repaying each loan, this is called the time period.
  • The person who takes loan is called borrower

loan type

There are different types of loans for different types of works, out of which we are telling you about 6 types of major loans.

  1. personal loan
  2. home loan
  3. education loan
  4. car loan
  5. gold loan
  6. business loan

Let us learn about the integral

  • Personal Loan

When a person takes a loan from a bank or financial institution to complete his personal tasks, then this type of loan is called a personal loan. Personal loans are mostly given for short term. Personal loans come under unsecured loans, so interest is charged on them. It is also more to give, you can use personal loan for traveling somewhere, for personal work at home, on the occasion of marriage.

  •  home loan
    When a person takes a loan from a bank to build his house, it is called a home loan. Home loans are mostly given for long-term. Home loans come under secured loans, so you can get a higher amount of money for home loan. Can interest rates are also low in home loan, it is a secured loan
  •  Education Loan
    When a parent takes a loan to get his children to do a particular course, it is called education loan. Almost all banks provide education loan to their customers. Education loan has to be repaid when the child completes the course and gets a job. Education loans also come under unsecured loans, so a guarantor is required to take an education loan. The children or parents of the guarantor can be any relative. Children’s education can be easily completed under the education loan.
  •  Car Loan
    When a person takes a loan from the bank to buy his car, then this type of loan is called car loan, the loan also comes under secured loan, it is for long-term.
  •  Gold Loan
    When a person takes a loan by pledging his gold ornaments to the lender, then this type of loan is called a gold loan. Gold loan is a good option for availing loan
  • Business Loan
    When a person takes a loan from the legal institution of the bank to start his business or to run his business smoothly, then it is called business loan. There are many schemes of the government through which the needy people can start their business. You can take a loan from the bank, according to the time period, it is a long term loan.

You should also know these things about loan

When the way of doing business has changed, most of the people who want to take business loan but due to lack of complete information are unable to apply for business loan, here we are providing you this important information.

What are the benefits of business loan

Now you must be thinking that what can be the benefits of taking a business loan, as you know that the need for money is very important to run any industry smoothly, if your financial condition is not good and you want to run your business. If you are facing difficulties in business then you can get maximum benefit by taking business loan

Documents required for loan

identity card.

Your identity card issued by the government so that your identity can be proved, it is necessary to propose you for the loan

pan card

This is one of the important documents if you are applying for a business loan

income tax return

Normally income tax returns of two-three years are required. For business loan, this is against your income proof.