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

FreedomPlus Personal Loans Review

FreedomPlus is a direct online lender that offers generous loan amounts and flexible repayment terms, even for borrowers without great…

Holly Johnson
Mar 27, 2020
Best Bad Credit Loans for 2020

Searching for the best loans for bad credit? Compare bad credit loans online, learn how to get a personal loan…

Saundra Latham
Saundra Latham
Mar 27, 2020
Best Business Line of Credit for 2020

If you need capital for your business, these lenders can provide you with a line of credit.

Ben Gran
Ben Gran
Mar 26, 2020
Can I Pay My Auto Loan With a Credit Card?

Can you pay your auto loan with a credit card? Well, yes… technically you can. Most lenders won’t allow you to use…

Holly Johnson
Mar 24, 2020
Discover Student Loans Review

Discover student loans offer attractive rates and terms and exceptional, U.S.-based customer service to students pursuing college degrees.

Jessica Walrack
Jessica Walrack
Mar 23, 2020
The Simple Dollar Guide to Auto Loans

Getting an auto loan isn’t as tricky as securing a mortgage since the lending criteria are a bit more flexible.…

Saundra Latham
Saundra Latham
Mar 23, 2020