Loans - Questions & Answers

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All Questions (29)

What are the different types of loans?

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YP Answers

There are seven types of loans:
  • Open ended loans, which that you can borrow over and over, like a credit card or lines of credit.
  • Closed ended loans, which are one-time loans that cannot be borrowed again once repaid unless you reapply for another one.
  • Secured loans, which  rely on assets as collateral for the loan. Failure to pay the loan means you lose the asset.
  • Unsecured loans, which don’t require collateral, and rely solely on your credit history and income as qualifiers.
  • Conventional loans, which are not insured by a government agency like the FHA. Conforming conventional loans follow guidelines set by Fannie Mae and Freddie Mac, while non-conforming loans do not.
  • Payday loans, which are short-term and borrowed against your next paycheck as a guarantee for the loan. Payday loans are bad deals for the borrower.
  • Advance fee loans require the borrower to pay a fee in advance of the loan and are typically one of the loans most connected with scams. Avoid payday and advance fee loans at all costs.
...Read More

How can you get a loan with bad credit?

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YP Answers

  • If you’ve been turned down repeatedly, try setting up an in-person interview with the lender to discuss your situation and make a case for your creditworthiness. If you have bad credit, there are still ways you can get a loan: credit union, tends to be  more user-friendly (but they still want their money back) than a bank.
  • Get a co-signer for your loan.
  • Access your home equity, if you are a homeowner.
  • Online personal loans can be a fast and easy solution, often specializing in debt consolidations.They can usually make a loan determination quickly.
  • Try a secured loan (where you borrow against an asset).
With all of these options, make a list of pros and cons, and determine which works best for you and your needs. ...Read More

What are the most common types of loans?

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YP Answers

The most common types of loans are personal loans (typically for smaller purchases), credit cards, home equity loans (where you borrow against the equity you’ve built up in your home), mortgages, home equity lines of credit (similar to home equity loan, but you have a revolving line of credit), cash advances (offered by credit card companies, or any entity that will loan money based on an expected future income), small-business loans (for entrepreneurs or established small businesses looking to expand), and consolidated loans (usually used to pay off debt and mortgages loans for homes). Auto, home, and student loans are also three very common loans....Read More

What is an interest rate?

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YP Answers

Simply put, an interest rate is the amount at which a lender charges you to use their money or credit. It is usually a percentage and is based on the annual percentage of the average outstanding balance. You may have an 8% interest rate, which means you will be paying, over the course of the loan, 8% annually, on the average annual percentage of the amount you owe. Mathematically it looks like this: interest = principal x rate x time....Read More

How is loan eligibility determined?

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YP Answers

Loan eligibility is primarily determined by your credit rating, which is based on your credit history, and is tied into if you pay your bills on timelike credit cards, utilities, etc.). Eligibility can also be influenced by things like employment stability, housing stability (how long have you been in the same place) and, of course, your income. The higher your rating means a better chance, and friendlier terms, like lower interest rates, because you are considered lower risk....Read More