The Loan Blog

Interest Only Loans

2007-12-26T05:03:00.000-08:00

An interest-only loan is a loan in which for a set term the borrower pays only the interest on the principal balance, with the principal balance unchanged. At the end of the interest-only term the borrower may enter an interest-only mortgage, pay the principal, or (with some lenders) convert the loan to a principal and interest payment (or amortized) loan at his/her option. (wikipedia)

Student Loans

2007-12-26T05:02:00.000-08:00

Student loans are loans offered to students to assist in payment of the costs of professional education. These loans usually carry a lower interest rate than other loans and are usually issued by the government. Often they are supplemented by student grants which do not have to be repaid. (wikipedia)

Title Loans

2007-12-26T05:00:00.001-08:00

A car title loan, or simply title loan, is a loan where the borrower provides their car as collateral. If the borrower defaults, then the lender may take possession of the car. This makes the loan less risky for the lender, and may permit the borrower to obtain a lower interest rate than they could get on an unsecured loan.

These loans are typically short-term, and tend to carry high interest rates. They are therefore used mostly by subprime borrowers with few alternatives. In addition to verifying the borrower's collateral, many lenders verify that the borrower is employed or has some other source of regular income. The lenders do not generally consider the borrower's credit score. In this sense, title loans are broadly similar to the (typically unsecured) payday loans, and sometimes offered by the same non-bank lenders. (wikipedia)

Payday Loans

2007-12-26T05:00:00.000-08:00

A payday loan (also called a paycheck advance or payday advance) is a small, short-term loan that is intended to cover a borrower's expenses until his or her next payday. Typical loans are between $100 and $500, on a two-week term and have interest rates in the range of 390 percent to 900 percent. (wikipedia)

Type of Loans (General)

2007-12-26T04:57:00.000-08:00

1. Secured Loans

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan.

2. Unsecured Loans

Unsecured loans are monetary loans that are not secured against the borrowers assets. These may be available from financial institutions under many different guises or marketing packages:

credit card debt,
personal loans,
bank overdrafts
credit facilities or lines of credit
corporate bonds (wikipedia)

What is a Loan?

2007-12-26T04:55:00.000-08:00

A loan is a type of debt. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.

The borrower initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt. A borrower may be subject to certain restrictions known as loan covenants under the terms of the loan.(wikipedia)