Financial systems generally classify credit and borrowing facilities into four main foundational types. First are unsecured personal loans, which require no collateral and rely entirely on the borrower's creditworthiness and income verification. Second are secured loans, which necessitate pledging valuable assets like real estate, vehicles, or savings accounts as collateral to reduce lender risk. Third are open-end revolving credit lines, such as credit cards and home equity lines, which allow continuous borrowing and repayment up to a predetermined limit. Fourth are commercial business loans, which provide working capital, equipment financing, or expansion funds for enterprises.