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What are the types of loans?

People borrow money for multiple reasons. It could be to expand their business, buy a property, pursue higher education, buy jewelry, etc. Loans generally fall into two categories, Secured loans and Unsecured loans they later have their sub-categories.

Let’s first dive into what is secured loan is. A secured loan is a type of loan in which a lender retains your asset as a security or collateral to lend you money. Collateral can be your car, your home, or anything that holds value. It straight means if a borrower defaults or does not repay the loan then the lender gets the ownership of the asset.