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Different loan types at a glance

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A loan is a contractual contract between the borrower (debtor) and the lender (creditor). The lender hands over to the borrower one thing, usually money (cash, bankroll, etc.), on time, which the borrower can use over this period. The fee for this use is the interest. When a reasonable cause is handed over, it is called a property loan.

Different loan types

A loan is a contractual contract between the borrower (debtor) and the lender (creditor). The lender hands over to the borrower one thing, usually money (cash, bankroll, etc.), on time, which the borrower can use over this period. The fee for this use is the interest. When a reasonable cause is handed over, it is called a property loan.

There are various types of loans: annuity loans, principal repayments, fixed loans, installment loans, partiary loans, home savings loans, mass loans, call loans or insurance loans.

Annuity Loan:
The annuity is made up of interest and principal. For an annuity loan, the repayment amounts remain the same. With each installment a part of the remaining debt is repaid, whereby the interest portion decreases in favor of the repayment portion. Consequently, the repayment amount is constantly increasing, the interest charge is steadily decreasing, so that at the end of the repayment term can amount to up to 100%, the interest rate up to 0%. Annuity loans are often mediated by banks or savings banks to private customers, because Consistent installment payment is a good basis for calculating the consumer. The interest rate on the loan is usually set at five to fifteen years and then renegotiated if necessary. It can also be negotiated from the outset a variable interest rate.

Installment loan:
In an installment repayment loans or repayment loans the payable remains repayment installment equal. In addition to the repayment installment, the interest still due on the remaining debt must also be paid. As the remaining debt is constantly reduced by the constant repayments, falling interest payments occur over the term.

Loan with suspended repayment:
In this relatively rare form of loan, the lender usually gets an additional security by the borrower, for example in the form of Bauspar contracts, insurance benefits, time deposits or the like. The repayment is then instead of a repayment by the lender on these collateral used (special repayment). The financial burden of this form of the loan is small at the beginning, but the repayment of the remaining debt in this process usually takes longer and the borrower is no longer entitled to its provided securities.

Insurance Loans:
In the case of an insurance loan, either a newly concluded or already existing life insurance is mortgaged by an insurance company. No repayment by the borrower is required, only accrued interest must be paid. At the end of the term, the actual loan is repaid by the payment of the life insurance. The interest rates are usually better for an insurance loan, but you have to make deductions in the mortgage lending value, which is usually lower than other forms of loans.