Loans are an essential source of funds to meet varying needs, whether it is buying a home, starting a business, paying for education, buying a gadget, or just to meet day-to-day needs. Some of the types of loans are described below:

1. Unsecured Personal Loan: The lender does not require the borrower to provide any collateral to obtain the loan. These are the most common type of loans for individuals today. The loan can be used as desired by the borrower. The loan is usually of a short tenor.


2. Business Loan: Loans for entrepreneurs and small business owners to finance their operations, purchase equipment, or expand their businesses. These loans can be secured or unsecured, depending on the tenor and amount required. The higher value may require some collateral.


3. Payday Loan: Short-term loans that are intended to be repaid by the borrower's next salary payment day. Normally for employed/ salaried borrowers. There is often no collateral required.


4. Secured Loan: Borrower is required to provide some collateral to secure the interest of the lender if the borrower fails to repay the loan. The collateral could be a car, shares house, etc. These loans are typically for large amounts. The interest rates would normally be lower than unsecured loans.


5. Student Loan: Student loans are designed to help pay for educational costs at government or private institutions. The lender may seek to secure an interest in the release of the degree certificate in respect of students whose loans are not repaid.

By understanding the features and requirements of each loan type, you can make an informed decision that aligns with your financial goals and needs.

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