Tuesday, 08 November 2020 13:14

The different types of loans

Borrowing money can be done in many ways, but what types of loans are there actually? And what are the differences? The most common loans for you at a glance.

If you want to buy something (online) quickly, the credit card is often a solution. Later you can repay the borrowed amount, often this is done in installments or you repay according to your own ability, for example when you have an extra cent. On average, you do pay a higher interest than if you take out a loan from the bank. Have you seen something nice in the department store or in the catalog of a mail order company, but not enough in your pocket or in your bank account? Then these stores often offer the possibility to buy the product on an installment basis. And in some cases they even offer credit. Take into account the high interest rates that these stores use, which is often the maximum amount.

Another variant is a revolving credit where you can always borrow money up to a maximum amount. Once this amount has been repaid, you can withdraw money again up to your limit. The advantage is that there is a relatively low amount associated with these types of loans. An alternative is a personal loan, where you know in advance exactly how high the interest is and what the term is for the repayment. Of course you can also be in the red on your bank account if you can pay off the sum within a short period of time.

 


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