Finance Loans cover a broad category of loans given by banks under various circumstances.  These loans include Home Loans, Personal Loans, Car Loans, Business Loans and Educational Loans.  Mortgage Loans form an offbeat type of Finance Loans.  Availing each of these loans requires one thing in common – The individual must have a good credit history.  Failure to repay any of these loans except Educational Loans can be damaging to the individual’s credit history.

Types of finance loans – In detail

• Home Loans – Home Loans are the most popular finance loans lent by bank to individuals. People take home loans in the belief that doing so will enable them to purchase their dream home thereby creating an asset. Banks lend home loans to those individuals who have complete documents as prescribed by the bank and meet the income eligibility criteria. The interest rates for home loans hover in the region of 10-14.75% per annum


• Personal Loans – Do you require money to meet some exigencies in your family? Avail of personal loans. You do not need to pledge anything to banks while borrowing personal loans. The current interest rates for personal loans vary from 9% to 27% depending on the income levels of the individual.


• Car Loans – Do you wish to own a sparkling new Chevrolet Optra and do not have the money to buy one? Don’t worry! Apply for a Car Loan with any of the banks. Be sure to repay the car loan else you might have to lose your dream car to the bank!


• Business Loans – Very few people in UK avail of Business Loans. Business Loans are given to people who wish to start something on their own. Surprisingly, a lot of people from rural UK avail of Business Loans. Individuals availing of business loans need to get signatures of guarantors who could testify that the individual applying for the Business Loans is indeed genuine. Normally, banks ask for the income and bank statements of the guarantor before the individual applies for business loans.


• Educational Loans – Do you wish to fund the studies of your child? If you do not have the money to do so, apply for an educational loan. Of course, your credit history would be checked thoroughly before the loan is sanctioned. Remember, you are the owner of the loan. If your child fails to repay the loan, you would be held responsible.


• Mortgage Loans – These loans are availed by individuals by pledging their property. Individuals apply for Mortgage Loans in cases where there is a need for money to meet huge expenses. Normally, individuals apply for Mortgage Loans to the tune of Rupees 10 Lakhs or more.

You can find more information on the interest rates of each type of loans in the product brochures of leading banks in UK. Please note that interest or principal paid for Home Loans is exempt from Income Tax under section 80(C) of the Income Tax Act of the Government of UK.