personal loans

Types of Personal Loans

Types of Personal Loans

No matter why you need a personal loan or the type, you are borrowing money and you have to pay it back with interest. personal loans

Here is a look at the type of personal loans that you can get according to

Types of Personal Loans

Convertible Loans

Convertible loans are normally used for business and allow lenders the chance to convert the outstanding principal of the loan into an equity position in the borrowers company.

Fixed Rate Loans

The majority of personal loans are fixed rate loans. The interest rate stays the same so every month you will pay the same amount until it has been paid off. The interest will be higher than an adjustable rate home loan.

Installment Loans

Here you will borrow a certain amount of money and then repay it with the interest at regular times over a certain period of time.

Payday Loans

Payday loans are the most expensive way to borrow money as they have very high interest rates and fees. These are small, short-term loans that are secured against your next paycheck. They are generally used for emergencies.

Secured Loans

A secured loan means that you offer an asset as collateral that will guarantee repayment of the loan. If you fail to pay the loan then the lender will take your asset.

Single Payment

A single payment loan is used over the short term and is repaid with interest in one sum.

Unsecured Loans

These loans do not require collateral. You will have to have the right credit history in order to get this type of loan. These do have a high interest rate, as the level of risk is higher.


These loans are riskier for consumers as the interest rate will change throughout the term of the loan. The maximum rate that a lender can charge though is limited.