Personal loans are unsecured loans which people can use for a variety of purposes, such as paying tax bills, covering school tuition, or making car repairs. Many banks and other lenders offer personal loans to people with good credit records who can demonstrate an ability to repay them. Usually, personal loans are unsecured, which means that borrowers do not need to back their loans with assets such as their homes. For people who have limited assets, the unsecured nature of a personal loan can be a tempting feature, because it means that they can access money which might otherwise be out of reach. Because they are unsecured, on the other hand, personal loans tend to have a slightly elevated interest rate, reflecting the increased risk to the lender.  There are two types of personal loans. A closed-end loan is a onetime loan of a set amount, with a fixed rate and repayment schedule.
A personal line of credit operates like other lines of credit, with a set limit and a turning balance. People can use personal lines of credit in a variety of ways, and repay them at their leisure. Personal lines of credit offer more flexibility than personal loans, but if people do not manage them responsibly, they can turn into a problematic debt. In the case of a closed-end loan, potential borrowers should ask about loan origination fees and the interest rate, and they should determine whether or not the interest rate is fixed, how much the monthly payments will be, and how long it will take to repay the loan. Offers of personal lines of credit should be evaluated to determine whether the interest rate is favorable, and how high the limit will be.

The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent .A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time.
Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. Acting as a provider of loans is one of the principal tasks for financial institutions. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan.

A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan. However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan.
In many jurisdictions, though not all, it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to enable them to purchase property outright. In countries where the demand for home ownership is highest, strong domestic markets have developed.
The most common way to repay a secured mortgage loan is to make regular payments of the capital and interest over a set term. This is commonly referred to as (self) amortization in the U.S. and as a repayment mortgage in the UK. A mortgage is a form of annuity (from the perspective of the lender, and the calculation of the periodic payments is based on the time value of money formulas. Certain details may be specific to different locations: interest may be calculated on the basis of a 360-day year, for example; interest may be compounded daily, yearly, or semi-annually; prepayment penalties may apply; and other factors. There may be legal restrictions on certain matters, and consumer protection laws may specify or prohibit certain practices.

Secured loans are loans for which the borrower is required to guarantee Repayment, by pledging with property, for instance, a car, a house etc. This property is called security or collateral. Because of the pledging, secured loans are given in larger amounts and have lower interest rates. Most personal loans are unsecured loans. A personal loan is a 'small expense' loan that is mostly used by people to finance their day to day emergencies. They come in smaller amounts and therefore, just like most unsecured loans, they are easily approved.
Home loans are loans that are taken for the purpose of buying a house. Home loans are secured loans. The house acts as a collateral or security to the loan. Payday loans are given on the basis of employment and income. However, payday loans have a high interest rate especially when the paying schedule is not followed. Auto loans are loans given out by financial institutions or car dealerships, for the purpose of buying an automobile. Due to the nature of automobiles to loose value with time, Auto loans usually have high interest rates. The shorter the time an auto loan is paid, the lower the overall cost of the loan. Mortgage is a loan that is used specifically to purchase a house. Usually, a mortgage is given to you by a mortgage company or any financial institution, after evaluation of your potential to pay back the loan in full.