There are several times when you need to apply for a loan. Buying a brand new car, building or owning your dream house, planning your education abroad or maybe a fancy wedding. All these things require tremendous amount of money, and with the high inflation today, these things have wandered away even more. Hence these things are not easily affordable for middle class population. To help them out, there are several banks and financial firms who are ready to lend you the money. There are, of course many terms and conditions tagging along the transaction. But adding to that, there are certain parameters which are considered before any loan is granted.
The different types of loans and accompanying conditions
- Educational loans – These types of loans carry a large tenure and moderate rates of interest. These loans are approved after a lot of processing of the applicants. There are different factors considered before approving an education loan like type of degree, future scope, institution, etc
- Object loans – These loans are granted against some materialistic mortgage. These loans comprise of vehicle loans and home loans. These loans are approved against the purchase you make. Thar car, home, etc are hypothecated to the bank. Bank holds the ownership, and in case of failure to repay, the bank has the rights to sell the asset in exchange of loan. Duration of loan depends on both parties and the transaction decides the rates.
Generally, bank has some formalities to be fulfilled before it can grant you the money. The bank checks your credit rating, and needs a guarantees who can assure your capability of repayment and at the same time share the responsibility of loan if required. There is another type of loan, the forbrukslån uten sikkerhet, or the loan without collateral.
Loan without collateral
This type of loan is also referred to as personal loans. The banks and financial aiding firms will consider various options before granting you any loan, because there is no security for the lenders. The main factors before granting you a personal loan are;
- The credit score – This is the main deciding factor in such cases. The credit score rating will prove your worthiness to the lenders, which is calculated on the basis of your repayment history and transaction details. Higher credit score will help you a lot in securing payment.
- Bank records – If you hold a special disciplined history with any specific bank, it will increase your chances of getting a loan from that bank.
- The income and cash flow – This is the only source on which the bank has to rely for repayment. Hence the bank will check your records and determine your capability to repay the loan.
The rates of interest for such loans is reasonably high, since the lenders do have greater risks.