Answer: Loans are classified into secured and unsecured ones.
The most common types of loans
1. Personal Loans - Issues by Financial institutions to any individuals for their personal uses.
2. Auto Loans- When you buy a vehicle, an auto loan lets you borrow the price of the vehicle minus any down payment.
3. Student Loans - It can help to pay for college and graduate school.
4. Mortgage Loans - A loan that covers the cost of a home's purchase less any down payment. If mortgage payments are not made, the lender may foreclose on the property, which serves as collateral. Mortgage payments typically take 10, 15, 20, or 30 years to complete. Government organizations do not insure conventional mortgages.
5. Payday Loans - Payday loans are one kind of loan to stay away from. These payday loans are usually subject to fees with annual percentage rates (APRs) of 400% or higher, and they must be fully repaid by your next paycheck.
6. Home Equity Loans - It lets you take out a loan for any purpose, up to a certain percentage of the equity in your home. Loans with installments are home equity loans. You get a lump sum and repay it over time (typically five to thirty years) in consistent monthly installments.