FinanceTeam

Choosing a Loan Type

When you first set out to look for a loan you may not be aware that there are various different types of loan. In fact they can be broken down into two main categories - secured loans and unsecured loans. All of the other names you may see just refer either to the type of person borrowing the money - tenant loans, homeowner loans for example - or to the purpose that the loan is used for - debt consolidation loans, home improvement loans etc.

What is a Personal Loan?

"Personal Loan" is generic term that was originally used to identify loans made for personal use, as opposed to business loans or mortgages. These days they have unoffically become to be regarded as smaller unsecured loans, used for holidays, weddings or to part fund a car purchase for example.

Is a Bank Loan any different?

No. Many people still use the term "bank loan" to refer to personal borrowing - probably because historically a bank was the only place you could get a loan. Now, however, there are many different companies that offer loans including building societies, supermarkets, car dealers etc.