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Fixed interest loan-The interest will be fixed and will not change during the tenure of loan.If interest rate is very it is better fix in the loan in fixed interest but view the agreement to see the clause of refixation of interest rate at ceratin interval if any,better shift to floating rate|
Semi Fixed Charge Loan-The interest rate will be refixed at ceratin interval fixed in agreement if lender want to refix the interest rate frequently or the term of loan is higher it is better to shift to floating rate loan
Floating RateThe bank will fix a bench mark rate and loans interest will vary with the interest rate of bench mark.
Transparent Floating rate loan-The loan will be same as above but it will have the transaparncy in interest rate as the bech mark is linked to some transparent rate like MIBOR,IBOR,Fixed Interest etc..and the loan rate will change accordingly.
Reducing balance Loan-In this type we will pay interest only for outstanding pricipal so the effective rate of the loan will be much lower.Most loan are of this type but always have a deep view on Loan agreement.
Non Reducing balance Loan-Here the amount to be paid is fixed and have to pay the full amount irrespective of early payment.Ceratin consumer loan are of this type.