What is a package loan typically used for?

A package loan is a financial arrangement specifically designed to facilitate the purchase of both real property and personal property together within a single loan. This type of loan is particularly useful in situations where a buyer wants to acquire items such as furniture, appliances, or equipment that are included alongside the real estate transaction, thereby simplifying the financing process.

By consolidating the financing of both the real estate and the accompanying personal property, the borrower can streamline their financial obligations and avoid the hassle of managing multiple loans. It allows for more flexibility in transactions where personal property is integral to the sale, ensuring that the buyer can obtain everything they need to utilize the property effectively right from the outset.

In contrast, other loan types do not offer this feature; for instance, financing a property without personal property would typically involve only real estate, and combining loans from multiple lenders refers to entirely different financing strategies that do not focus on the inclusion of personal property. Additionally, loans specifically for making improvements to existing real estate may involve renovation loans rather than a package loan structure, which is dedicated to combining both real and personal property financing into one product.