Consumer loans are of several types. Let’s have a look at some of them:
- Single Loans: These are also known as bridge loans. If you are in need of money for a short period of time, these are the ones you should turn to. These loans are not repaid in instalments, but as a whole at the end of the loan period.
- EMIs: These are the most common form of loans. The payment is made usually on a monthly basis. Car loans, home loans etc. are usually of this type. The interest rate depends on the amount of time you take to repay the loan. The longer you take, the more cash the lender gets back.
- Secured Loans: You keep some item or asset as a collateral. That asset may be your home, car or anything. In case you fail to repay the loan amount at the end of the loan period, that collateral will be used. Home loans are usually of the secured nature since the money involved is considerably larger than other loans. In secured loans, the interest rate is usually lower than others.
- Unsecured Loans: These are the forbrukslån uten sikkerhet. You don’t need to keep any asset as collateral in these loans. However, these loans are given to only those people who have spotless credit history, or have really high net worth. The interest rates are usually quite high for these loans.
- Fixed Rate Loans: Most of the consumer loans fall under this category. As evident from the name itself, the interest rate of these loans remain the same throughout the loan period. But the caveat in this case is that, the interest that you have to play in such loans is higher than the variable ones.
- Variable Rate Loans: As opposed to fixed rate loans, these have a considerably lower interest rate and the interest rates are adjusted at regular intervals. This point is explicitly mentioned in the clauses of the loan itself so that there is no confusion regarding it at a later point of time. The rate of interest is decided based on a number of factors, principal among which is an index which is varied according to the latest market trends.
- Convertible Loans: These are mostly custom loans, whose interest rates vary from being variable to fixed and vice versa. The changes are pre-determined at the time the loan is taken originally.