Common types of loans are homes, personal, such as business cars, education, and unsecured loans. These different loans apply to specific purposes and come with varied conditions and interest rates.

Interest is the expense for using money, usually occasions in an annual percentage rate known as APR. It is calculated by the provider depending on the loan amount, the credit rating of the borrower and the type of loan.

Usually, a loan applicant needs to fill out the loan application form and then let it be with the financial institution. Banks will check your credit history, affordability and many more to qualify you for a loan and or the interest rate to be charged.

The process usually entails making an application, providing relevant documents (such as pay slips) and passing a credit check. The creditor analyses your ability to repay the financial product with interest so as to give you the approval and the conditions for the loan.