Different types of loans

Personal loans are a banking instrument that has evolved over time to adapt to the requirements of individuals who request them.

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For this reason, credit institutions have ended up creating different forms of personal loans depending on the purpose for which the requested money is to be used. Personnel, consumption, studies, mortgage, perhaps these are the types of credit most in demand today. Let’s see more carefully what each one consists of.

  • The personal loans themselves are requested to finance specific money needs, for example, a trip, a wedding, a medical treatment, the purchase of a place, etc. They are usually less than € 50,000 and may require an endorsement if the bank deems it appropriate, due to the applicant’s personal / financial circumstances.
  • Student loans are designed to finance education, especially university and postgraduate education, and enjoy better conditions than personal loans.
  • Finally, mortgage loans are used to finance part of the purchase of a home and are currently being granted up to a maximum of 80% of the value of the property. The mortgage loans, in addition to the personal guarantee, include a security right, which would be the mortgaged property.
  • Quick loans are a new way to get fast money, almost instantly. This supposes a great agility in comparison with the usual process of obtaining your personal loan through the banks. In addition, fast online credits offer a wide variety of amounts, from micro-credits of € 50 to higher amounts. And the best part is that the paperwork is also reduced. In most cases, payrolls or endorsements are not required.

Finally, it is necessary to make a small difference between personal loan and line of credit. In the first case, the borrower will receive the full amount of the credit in his bank account to be used in the purpose for which the loan was requested. With a line of credit, for example, as with credit cards, the recipient of the money has a line of financing linked to a bank account for a maximum amount that can be arranged at will, according to the needs that arise , and that is renewed month by month. While personal loans are designed to meet the needs of households and individuals, the lines of credit are more designed for the financing of businesses and self-employed.

With all this information, you are ready to decide what type of loan to request at any time. It is not necessary that you always go to the same institution to finance your money. In fact, this can end up being expensive. Remember that you can always use the quick credits for your most current expenses that require lower amounts and greater agility, and combine this financing route with the traditional consumer or personal loans of the big banks.