When you intend to apply for a loan with a bank, you will be offered several types of loan services available at the bank. Learning about the types of loans that suit your needs is a good idea. Loans are divided based on the use, time, and collateral. What are the types of loans? Let's learn about the types of loans below.
Loans Based on Usefulness
Based on their usefulness, loans are further divided into three parts, including:
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Productive loans are loan services provided for productive activities such as building a business, producing goods or services, or increasing the scale of your company. Examples of productive loans are:
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Kredit Usaha Rakyat (People's Business Credit) is a loan service from a government program to support the MSME sector. The interest rate of this loan is relatively low, making it suitable for those of you who want to create a business. You can check loan services at Bank MAS to find a loan according to your ability.
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A working Capital Loan is a loan service to fulfill working capital that runs out in one business cycle or particular working capital.
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Micro Business Loan, a loan service similar to the People's Business Loan, focused on developing businesses. The difference is that government agencies do not provide micro business loans, but banks do. The difference also lies in the guarantor, application requirements, and credit limit.
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Investment Loans are long-term loans used for business purposes, building new projects, or rehabilitation purposes. For example, if you want to buy a new production machine or make a new factory for your business, you can apply for an investment loan at Bank MAS.
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Consumptive loans are for consumption purposes such as buying a cellphone, motorcycle, or computer. An example of this loan service is a credit card.
Loans Based on Time
Various loan services are also available based on the repayment period. The types of services are:
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Long-term loans are loans with repayment periods ranging from 5 to 15 years.
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Medium-term loans are loans with a repayment period of 3 years with a nominal value generally below 100 million.
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Short-term loans are loans with a repayment period of 1 year.
Collateralized Loans
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Collateralized loans are loans that require the borrower to provide collateral. Collateral aims to avoid the risk of loss or default and repayment.
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Unsecured loans are loans that do not require the borrower to provide collateral. Usually, this service only requires you to provide a complete identity.
It would be best to learn about these types of loans to choose a loan that suits your needs. Read more exciting tips about finance here.