LOAN TYPE OPTIONS

There are various loan type options each of which has their various terms. It is important that every business owner and individual interested in accessing personal or business loan gain ample understanding of the various loan type options to enable them make a wise choice.

The different loan type options include:

1. SEASONAL LOAN: Seasonal loan is a loan type option in which payment consists of principal and interest with larger payment being made during the high season and lower payments during the low season.

2. AMORTIZED LOAN: Amortized loan is a loan type option in which each payment consists of principal and interest. The same amount is payable in a weakly, monthly, quarterly or periodical installment over a certain time period according to the terms stated in the loan agreement.

3. INTEREST ONLY LOAN: Interest only loan is a loan type option in which only interest is payable in a monthly or quarterly installment with the repayment of the principal deferred until the end of the loan. In some cases the principal are paid periodically throughout the life of the loan.

4. STARTUP/GRADUATED LOAN: This is a loan type option in which the payment consists of the principal and interest. The good thing about startup/graduated loan is that it offers the opportunity to make small installment at the beginning and increasing it by certain percent as you proceed before leveling off for the remaining year.

It is similar to an Amortized loan. In this loan type option, you do not pay the same amount over and over again over the life span of the loan facility. Installments are well spread to enable you make payment without affecting your business.

The loan type option you chose will have dramatic impact on your business and financial life. Therefore, before committing to any, make sure you review the above loan type options carefully and wisely consider the one that work best for you and your business.









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