There are also some specialized types of loans, such as Small Business Administration (SBA) loans, which offer more flexible credit standards than conventional business loans. Another type of loan is a secured line of credit, which is a flexible pool of money that you can access on demand. This type of loan typically requires a minimum down payment and may also include an arrangement fee. It is important to understand how loans work before borrowing money. Understanding how they are structured can help you avoid unnecessary debt and make smarter financial decisions. In addition, you can avoid paying unnecessary fees by reading the fine print.