Loans

What you'll find here

When you think about loans, you might think it's just about borrowing money; and when you're ready, paying it back. While that's true, the details can get a little more complicated than that. Here, we'll break it all down so you can make the most informed choices.

Loans 101

Before you apply for a loan, make sure you're clear on how they work, how they're different, and what you can expect from the application process.


Difference between a secured loan and unsecured loan?

A secured loan has some form of collateral attached to it. The most common types of secured loans are mortgages and auto loans, where a home or car serves as collateral. If you default on the loan, the lender can collect the collateral in its place. An unsecured loan has no collateral attached. The most common types of unsecured loans are student loans, personal loans, and credit cards.

Difference between interest rate and APR?

Borrowing money costs money. The interest rate is the cost of borrowing the principal amount of a loan, and most likely what you'll focus on first when choosing a lender. However, this percentage doesn't include additional costs, like broker fees and closing costs on a mortgage. That total cost percentage is included in the APR, which stands for the annual percentage rate. So if the interest rate is a piece of the loan pie, the APR is the entire pie.

What is loan amortization?

Loan amortization is when your repayments are broken down into equal and regular (usually monthly) installments over time. These regular payments help to pay down interest as well as the principal cost over the lifespan of the loan. The goal is to have your balance be at zero by the time your loan's lifespan runs out. And your ability to pay the monthly installments is a good indicator of whether or not you can afford a particular loan.

How does a down payment affect my loan?

A downpayment helps by reducing the amount you'll have to borrow up front. Most mortgage lenders will require a minimum down payment, typically anywhere between 10 and 20 percent of the purchase price. But if your down payment is less than 20 percent, you may also be required to obtain private mortgage insurance.

Latest Loans Articles

How to Finance Your Startup

Here are the best loan options on the market for funding your startup and some tips on how to get…

Bents Dulcio
Bents Dulcio
Aug 13, 2020
10-Year Fixed Mortgage Rates

The Simple Dollar presents 2020’s best 10-year fixed-rate mortgage lenders with the best interest rates, lowest fees and most reasonable…

Lena Borrelli
Lena Borrelli
Aug 13, 2020
Best Business Line of Credit for 2020

The best business lines of credit are essential financial tools that can help your business access the capital it needs…

Cynthia Paez Bowman
Cynthia Paez Bowman
Aug 13, 2020
Citizens One Bank Auto Loans Review

Looking for a dealership-based auto loan option? Citizens One Auto Loans has you covered with more than 6,700 participating dealers.

Doug Bonderud
Doug Bonderud
Aug 13, 2020
PNC Bank Auto Loans Review

PNC Bank auto loans offer incredible flexibility when you buy a new or new-to-you vehicle while also giving you a…

Trevor Wallis
Trevor Wallis
Aug 13, 2020
AmeriSave Mortgage Review

AmeriSave offers competitive mortgage rates and doesn’t charge origination fees, making it a good option for your mortgage.

Jessica Walrack
Jessica Walrack
Aug 13, 2020