Loans
Loan is the process of borrowing assets between an individual and a financial institution, like a bank. There are various types of loans that are offered by these financial institutions such as credit cards, car loans, mortgage or home loans, student loans and personal loans. These are given to individuals after a series of evaluations and checks on their financial background. Once the background checks and evaluations are complete, individuals may then receive secured or unsecured loans.
Secured loan is the act of pledge of an to make his assets the collateral for his loan. The most common secured loans are mortgage loans and car loans. Once the house or car is purchased, the bank is given lien to the title of the property until the loans is paid in full. If the individual defaults on the loan, the bank has the legal right to repossess the car or house, and sell them to retrieve the sums owing to it.
Unsecured loans are loans where an individual does not have to pledge any of their assets as a collateral for the loan. The most common secure loans are student loans, personal loans and credit cards or line of credit. The most widely used unsecured loan is the use of a credit card or the line of credit offered to an individual. A certain amount of credit is offered to an individual and they are alloted to pay the entire amount or a fraction of the assets used monthly.