Loans come in all shapes and sizes and can be flexible to suit the person's needs. Responsible lenders do not want to lend you money that means that you can never pay it back, so loans will always start out low, and only people with a good credit history will be able to get bigger loans for higher amounts.

When you are building your credit history, start small and make sure that you can afford the loans that you are getting. repaying in full and on time builds your credit score and builds your reputation so that you can get rewarded with lower rates and increased amounts in the future.

If you miss repayments on any loans, there are consequences that could mean your credit score is badly affected, or it could be even more serious.

1. Short Term Loans

These loans are usually for up to 10,000 pesos, but could go as high as 35,000 peso and for an average of 30 to 60 days. They are to be used for emergencies and can really help out in times of need. They serve a purpose, and can help you to start your journey to build up your credit score.

2. Salary Loans

These can be issued by your employer or by salary loan companies against your employment contract and pay stubs. They are usually for a bit more money, and for longer periods of time.

3. Installment Loans

These are usually for 6 months, payable in 12 installments and can be for up to 50,000 pesos. The first installment loan that the company will offer you must be paid back on time, so that future loans can be for higher amounts and at lower rates.

4. Bank Loans

Banks issue loans to customers for up to 100,000 pesos and take a detailed look at your banking history, income and affordability before issuing a loan to customers.

5. HP Loans (Hire Purchase Loans)

Usually for products that you need. Motorbikes, cars, laptops, computers, home furnishing, down-payments on holidays or for large expenses. You buy the goods, take ownership of the goods, and continue to pay for them over time. These loans can be for up to 36 months and for any amount, based on the cost of the products that you are purchasing. These loans are also common with online e-commerce stores.

6. Vehicle Loans

Buying a motorbike, or a car is a big expense, but one that could save you money in the long term, or even make you money if you use it for business, or for a courier service or taxi service. The loan is often against the vehicle that you buy, and if you fail to meet the repayments you risk losing the product that you have purchased.

7. Housing Loans

When the time comes for you to buy a house, and start your own family it is very likely that you will need to take a housing loan to afford the house. These loans can be for Millions of Pesos and spread the cost of owning the home over 5, 10 or 15 years. They are issued by banks, and again, if you do not keep up the repayments, you risk losing your home to the bank.

8. Business Loans

If you are starting your own business, or expanding an existing business, you might need extra money to help. Business loans can be for millions of pesos and for up to 10 years. If you fail to repay these loans, you risk losing your business, you might have to sell your house to pay off the loan, and you risk legal action taken against you.

The list above is not complete, there are other types of loans that you could also apply for, but they generally fall into one of the 8 categories above.

Other loans not covered here are:

• Collateral Loans. Loans against a laptop, mobile phone, piece of land, car, bike, or owned property. Pawn Brokers are collateral lenders
• Loans from Friends and Family
• Student Loans for educational purposes
• Hospital Loans to cover health care costs
• Promissory Notes to promise to pay a debt off in the future
• Check Book Loans. Issuing a check for a future date and taking out a loan against the check.
• Credit Card Loans. Getting a loan against the value of the credit limit on a card.
• Rent to Own. Paying rent for a product that also goes to paying off the product so you own it in the future.
• Salary Advance. Getting your next salary in advance of earning it.
• Line Of Credit. Similar to a credit card, you have money available to you up to a maximum limit that you can access at any time.

With all loans, there are consequences to missing payments, failing to make payments and failing to repay the loan in full. Never borrow more than you can afford, and always remain in contact with the lender, so that you can work out problems if they arise.