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Different types of loans
There are two (2) kinds of loans in financing.
First one is the secured loan, which the borrower uses a property or a security as a collateral for the loan.
- this kind of loan is closely governed by state law and will only be issued if the borrower has attained a certain level of standards from different financial organizations. An example of a secured loan is the mortgage loan, in which the borrower will approach a lender for a credit for purchasing a property or to refinance a business or an existing loan.
Second type of loan is called the unsecured loan, wherein the lender is not governed by the status of the state and it is not based on the borrower's assets. Unsecured loans comes in different forms: these are the, credit lines, personal loans from private lenders, bank overdraft, credit card debts, and corporate bonds.
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