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Type's Of Loans - Liang Chen
Mortgage - A loan that is acquired in order to purchase real estate
Payday - A small loan intended to cover various expenses until the user's next payday
Student - A loan which helps students pay for School Fee's, books etc.
Personal - A loan which enables you to buy a product that you cannot afford at this moment
In general, Mortgage loans will have lower interest rates as it is a "secured loan" which means that if you cannot pay back the loan then the bank will still be able to get a return by repossessing and selling the real estate you loan. There are also two types of personal loans: Secured means that you are using the loan to buy something of material value e.g. a car, boat or computer and Unsecured means you are using the loan to pay your bills or invest in an online game. Generally speaking, secured loans will have lower interest rates then unsecured loans as the bank will still have something to sell should you be unable to pay back the loan.
Payday loans are meant to cover expenses such as rent, groceries and miscellaneous purchases until when you receive your next paycheck. Nowadays, these aren’t used so much as credit card’s allowed you to do pretty much the same thing without a lot of paperwork. Needless to say, the maximum amount you can get with a payday loan is around $1500. Payday Loan’s are normally a bad decision to make as they have quite high interest rates, although if you are in a tight spot and need some money to use until your next paycheck then these are the way to go.
Student Loans in Australia are mainly funded via the HECS-HELP systems in which the loans are repaid over time by an additional tax. However, this can also mean that student’s from overseas can simply come over to Australia, apply for a student loan, and then leave Australia after they graduate simply because they didn’t file an Australian Tax return and so, do not have to make any repayments.
Personal Loans are loans which you can use to buy personal items/services e.g. A holiday, a new television, home improvements or to repay debts. Personal Loan's tend to have an interest rate of aroudn 14% to 20%. Depending on whether or not your loan is "secured" or "unsecured" (refer to above), interest rates may vary. However, having a "secured" loan will most likely result in a lower interest rate as the bank has some form of collateral in the event that you are unable to repay your loan.