Loans can be of two types - secured and unsecured. A secured loan is obtained against a security such as a house, real estate or fixed deposit. The interest rate is lower than that for unsecured rates as the risk to the lender is generally less. This works out to lower EMIs (Equated Monthly Instalments). Even people with a bad credit history (such as a loan default) can obtain secured loans quite easily.
A secured loan company offers secured loans only. Such a company is unlikely to go belly up in case of default. One can also avail of secured mortgages, where an asset, typically real estate, is mortgaged (or offered as security) to obtain a loan.
Opting for such a loan is advisable if you have an asset that can be mortgaged. Not only is the interest rate lower, but the loan processing time can be significantly reduced as it is easier for the lender to check your worth.
A person with many loan accounts such as credit card debt, home mortgage, car loans and so on can opt for loan consolidation. Here all the loan accounts are merged into one loan and the interest rate and EMI negotiated to something the borrower can pay. This helps people who are juggling many loans some of which can carry very high rates of interest such as that on credit cards. By transferring your credit card payables to a refinancing loan, you can substantially lower your interest rate burden. The money thus saved can then be channelled towards repaying the loan faster. One can soon be debt free by taking the trouble to consolidate one's Loans.
Many companies offer loan financing to those who want to consolidate their debts and get out of a credit trap. Such companies typically require a security such as a house against their financing your loans. Commercial mortgages can be taken to remodel, renovate or get a better interest rate deal.
Loan financing is also available to companies, co-operatives, employee-owned businesses, and community enterprises