FC: Personal Finance Understanding Loans
1: Car/Automobile Loan This type of loan allows an individual to purchase a car with funding provided by a third party, such as a bank or car financing company.
2: Mortgage Loan - a loan secured by real property through the use of a mortgage note.
3: Balloon Mortgage - a mortgage that does not fully amortize over the term of the loan thereby leaving a balance due at the end of the term...i.e. commercial property
4: Installment Loan - it is a loan with a specified number of payments scheduled over time. For example, furniture payments
5: Education (student) Loans - is a loan to help students pay for college tuition, books and living expenses while attending college.
6: Payday Loans - are usually small, short-term unsecured loans that rely on the customer having a payroll stub and an active banking account reflecting payroll deposits.
7: Personal loan - the lender relies on the borrower's promise to pay back the loan. Therefore the loan is unsecured.
8: Secured loan - the borrower pledges an asset as collateral for the loan. If the borrower defaults on the loan, the creditor takes possession of the asset.
9: Unsecured loan - the loan is not secured by a lien or asset i.e. credit cards
10: Line of Credit - is a source of funds that can be easily accessed at the borrower's discretion.
11: Equity loan - a mortgage loan where the borrower receives money and the loan is secured by real estate.