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

A First Time Home Buyer’s Guide

These 5 first-time homebuyer programs and grants can help you to buy a home with little or no money down.

Jessica Walrack
Jessica Walrack
Dec 18, 2019
Five Things You Should Know About Working With a Mortgage Broker

Maybe mortgage broker is a term you’ve heard in your travels, but you’re unsure how it fits in with your plan…

Nicholas Pell
Sep 13, 2016
Best Reverse Mortgage Lenders for 2020

The best reverse mortgage lenders combine careful screening with quality customer service and fair rates for senior citizens.

Ashley Mott
Ashley Mott
Feb 20, 2020
Federal Student Loan Forgiveness: Four Ways to Wipe Out Your Debt

Americans have racked up approximately $1.5 trillion in student loan debt, with the average borrower carrying $32,731. If you’re struggling…

Jessica Walrack
Jessica Walrack
Dec 17, 2019
Small Business Guide to SBA Loans

Like so many government endeavors, the Small Business Administration (SBA) can be both incredibly helpful and terribly confusing. But when your…

Joe Sweeney
Nov 13, 2019
Four Options for Business Debt Consolidation and Refinancing

As of 2012, there were 5.73 million businesses with fewer than 500 employees. What’s more, 30% of all jobs in…

Nicholas Pell
Nov 13, 2019