Loan Products That Banks Offer
Banks offer a wide variety of loan products to their customers. If you need to finance something, here are some of the more common types of loans that banks provide.
Home mortgages are some of the largest loans that banks offer, as they're used to purchase homes. Because these loans are often for hundreds of thousands of dollars, the application process for them is quite substantial. You'll need to provide income verification, employment verification, credit history information and other details during the application process.
Additionally, banks offer a variety of different home mortgage options. There are conventional mortgages, mortgages that the government backs, and non-conventional mortgages. Conventional mortgages and government-backed ones must meet strict requirements that are set forth by the government and not the local bank.
If you need a home mortgage, banks employ loan officers who can guide you toward the right type of mortgage and help you with the application process.
Auto loans vary in size because cars vary dramatically in how much they cost. An auto loan for an older, used vehicle will likely be much less than a loan for a new car that's quite expensive.
When applying for an auto loan, the interest rate of the loan depends a lot on what your credit score is. In many cases, though, the interest rates offered by a bank will be lower than what a car dealership can provide. This is especially true when purchasing a used car from a dealership that's not affiliated with a national brand and can't use a major brand's financing.
Personal loans can be used for almost anything, including vacation, debt consolidation, home improvement, moving, and any other expense. These are some of the most flexible loans that banks offer.
Unlike home mortgages and auto loans, personal loans aren't secured with any collateral. As a result, their interest rates tend to be a little higher than those of secured loans. Exactly what a personal loan's interest rate is depends largely on your credit score.
Business loans are commercial loan products that a business can use for any number of purposes. Many entrepreneurs take out a business loan when first starting their business so that they can pay for inventory, equipment, or other necessities. Established businesses might also get loans to increase operations or survive downturns in the economy, though. Business loans are often based on a combination of a business' credit history and the business owner's credit score.