Handkerchiefs are for your nose and made of cloth. Tissues are for your nose and made of paper. Napkins are for your mouth (during meals) and made of either.

A handkerchief and tissue are both used for the same purpose - blowing your nose but a tissue is made of paper and we only use it once and then throw it away. I handkerchief is made of cloth and we use it many times and for a long time before throwing it away. Tissues are used more than handkerchiefs today. A napkin or serviette can be made of either paper or cloth and is used to clean your face and hands, usually after eating something.