While reading about the types of loans we come across many terms that often mis-confuse us. Here are some terms related with the loans that can give us an idea what these terms mean.
Different Types of Loan Provided by Banks in India
1. Concessional loan:-
A concessional loan is also termed as soft loan, it is the type of loan that is granted on the conditions that are more generous than the market loans. these may involve below market rate of interest by the grace periods. a loan that is granted by a developed country to a developing country is a concessional type of loan. this type of loan can even be offered by leading institutions to its employees on the name of employee benefit.
2. Demand loan:-
These are the short termed type of loans that do not have a fixed date of repayment and often carry a floating interest rate along with them that can vary according to the prime lending rate. the lender may call them for repayment at any specific time. these type of loans may be either insecured or secured depending on the conditions involved.
3. plus loans:-
these type of loans are made for students ( graduates-under graduates ) and their parents if the child is dependent on them. The condition is that the student must be enrolled at least half time. it is generally a non-need credit based loan which means that the borrower should be eligible to pass a cheque of credit. These are made for the benefit of the student.
4. Perkins loans:-
even these type of loans are made with a promise to benefit the students. these are low- interest based loans meant for the under-graduate students who are in an exceptional financial need these offers are limited type of offers and are provided on the first come first get basis.
5. Private Loans:-
These are also the loans made with a promise to benefit the students but These types of loans are provided to the students that are not eligible to get federal type of loans and need assistance beyond their financial aid- prize.
these are generally provided by the banks and other financial institutions subjected to their own terms and conditions,still these type of loans have a highly yearly and maximum limit of loan.
6. Commercial loans:-
These are the type of loans that are similar to the above loans but involve a commercial mortgage and bonds of cooperation. And as the name suggests, these are commercially made.