There are more or less 17 kinds of loans available in Bangladesh. But home loans, personal loans, vehicle loans, and student loans are most frequently taken by borrowers.
These types of loans are meant to suit different purposes of a borrower. Let’s say you need funding for your marriage or a car. As the reasons for borrowing the money are different, the category of the loans also varies.
Top 4 types of loans people borrow from banks
If you need to take any of the loans—here’s what you need to know about the 4 most common kinds of loans.
Personal loans
This is the most popular loan type because it has instant liquidity. Typically, personal loans have around 24 to 84 months of repayment terms. You can get a personal loan at a low-interest rate if you have an excellent credit score.
Besides, it covers a broad range of purposes. You can use this loan for any reason except for education.
Usually, people take this loan for proposed like—
- Any emergencies
- Weddings
- Vacation
- Debt consolidation
- Treatment
- House renovation
- Buying expensive home appliances and gadgets
- Shifting to a new city etc.
Generally, personal loans can be secured and unsecured. If you take a secured loan, you need to support it with a savings account or an asset like a car. And if you take an unsecured home loan, you don’t need to back it with anything else but your signatures only.
You can take a personal loan from various financial services, such as banks, non-banking financial institutions, or credit unions. In Bangladesh, you can now apply for personal loans online.
Home loans
The purpose of this loan is to buy or make homes. However, there are many reasons it can be related to home, and you can take home loans for those.
Here are some of the common reasons for taking homes loans:
- Apartment purchase
- Individually constructing house
- Group construction
- Home equity
- Home extension or renovation
- Plot purchasing
- Home loan balance transfer
- Semi-pucca house construction
Keep in mind, if you take a home loan, you need to pay your financial service a specific amount of down payment for your house. And that can be around 10% to 30%. And the rest of the payment will be covered by your financial service.
Home loans are secured loans. Like personal loans, you can apply for home loans from a bank or non-bank services.
Vehicle loans
You can take a loan to buy a new car, like a new one. Some financial services grant loans for purchasing used cars as well.
Moreover, some of them will allow you to buy two-wheelers as well. So, you need to pick a financial service according to your needs.
Generally, you will have around 36 to 72 months to repay the debt. However, since the price of vehicles is increasing daily, some loan services can have 3 to 7 years of repayment terms. However, it can vary among services.
Note that this is another secured loan. And this time, you need to support the loan amount with the vehicle you’re buying. If you want to buy a car, take a loan and fail, your lender will repossess the car.
Deducting the down payment on your vehicles, you can apply for a loan to pay the rest of the price.
Student loans
Among the three other popular loans variety, this one is taken by a lesser amount of people. Still, many people choose to lend money to education in Bangladesh. Typically, students who want to pursue higher education apply for student loans.
In Bangladesh, you don’t usually get a student loan from any government academic service. So, where do you get it? Some private banks and non-bank institutions allow you to apply for a student or education loan.
Of course, you can pay your tuition fees with a student loan in Bangladesh. But there are financial services that will lend your money to pay for other expenses connected to your education, e.g., living expenses.
To conclude
We need financial assistance for many reasons. And in Bangladesh, these four types of loans are the most demandable. If you need any of the loans mentioned here, check for several options to compare the interest rates and other conditions.
Also, you can simply ask for your prospective financial service if you need any other loan outside these.
