LOAN | what we have to know before we take
What is Loan?
Sometimes we have to take some big deal, like buy a car/home/flat or some emergency things which need a big amount of money. Most of us can’t arrange that money in once. So we need to take it from somewhere with an amount of interest with some specific term & condition, it’s called the loan.
How many types of loan is available?
There are so many kinds of organization, which gives us Loans on variable stages. We have to know which stage is available to take the loan. there is two basic category of loans, one is open-end & another is closed-end. Open-end is that type, which is used repeatedly for purchase and will be paid back after the month. This category mostly used on our daily expenses with our credit card. Closed-end is that type, which is used for big deals like buying home/car, starting a business etc. This type of loans
used for a specific reason with a specific period of time.
3 important things to know before took the loan:
- Interest rate: We have to pay, some extra money for our loans. Percentage of that extra money is called as the interest rate.
- Paid back system: we have to check the paid back system before taking loans. there is two way to paid back the loan. one is paid back in installment payment & another one is paid back in a lump sum.
- Secured or unsecured: Organization gives loans on two differ way. One is secured & another is unsecured. Secured loans are those loans which are protected by an asset or the things which are bought by the loan. And unsecured loans are those which is issued only by the borrower’s creditworthiness. For getting the unsecured loans, we must have the high credit ratings as they demand.