Which two types of loans are commonly provided by banks?

Personal loans and mortgage loans are two of the most commonly provided types of loans by banks due to their versatility and demand among consumers.

Personal loans are unsecured loans that individuals can use for a variety of purposes, such as consolidating debt, financing large purchases, or covering unexpected expenses. They are attractive to borrowers because they often have lower interest rates compared to credit cards and can be repaid over a set term, making repayment more manageable.

Mortgage loans, on the other hand, are secured loans specifically for purchasing real estate. Given the high cost of homes, these loans typically represent significant amounts and have longer repayment terms. They are a foundational product for banks, as they generate substantial interest income over time and allow individuals to achieve homeownership.

Both types of loans play a significant role in the financial landscape and reflect common lending practices among banks, which aim to meet the financial needs of both individuals and families.