Finance
Glossary
Personal loans - Personal Loans are loans
generally obtained by consumers in small amounts and for non-business
purposes. Examples of personal loans include home improvement
loans and loans to finance the purchase of consumer goods
and services. Personal loans can be taken for a variety of
options and come with flexible loan terms.
Secured loans – Secured loans are
loans secured by collateral. The collateral is the guarantee
placed in return of the loan borrowed which is usually in
the form of your home or any other property. Secured loans
attract lower interest rates and are very popular with loan
lender. Homeowners have an ideal loan in the name of secured
loans.
Unsecured loans – Unsecured loans are
no collateral loans. No security is required in return of
the loan borrowed. Loan claim for unsecured loans is thereby
not backed by any security. The risk for the loan lender is
increased therefore unsecured loan have a higher rate of interest
as compared to secured loans.
Mortgage – A mortgage is a provisional
transference of property as security for the repayment of
a loan. Mortgage is highly positive method of loan borrowing
because the interest rates on mortgage have been falling.
However, the drawback with mortgage is that you can lose your
property in face of failure of repayment.
Remortgage - When a borrower moves a mortgage
from one lender to another is known as a remortgage. The new
mortgage will pay off the existing lender and sometimes the
borrower may raise additional funds over and above the old
mortgage amount. Usually re-mortgage is done to secure a competitive
interest rate. Research about remortgage costs before remortgaging.
Borrower should also be wary of any redemption charges when
considering a re-mortgage.
Credit score - A credit score is a number
that tells a lender how likely an individual is to repay a
loan, or make credit payments on time. When a lender requests
a credit report and score from a credit reporting agency,
the score is calculated by a mathematical equation that evaluates
many types of information from your credit report at that
agency. By comparing this information to the patterns in thousands
of past credit reports, scoring identifies your level of credit
risk.
Debt consolidation loans - The replacement
of multiple loans with a single loan, often with a lower monthly
payment and a longer repayment period. It's also called a
consolidation loan. This process is usually used by consumers
to better manage their debt problems.
Home equity loan - Home equity loan uses
your house as security. This is a loan against the portion
of a home's current value on which you do not owe money – the
value of a home, minus the current balance of any mortgage
loan on the property. Home equity loans provide you with a
fixed amount of money repayable over a fixed period of time.
Bridging loans – Bridging loans are
specifically designed short term loans. Bridging loans can
be acquired in very less time to bridge the time between purchase
and sale. A bridging loan is made available to the loan borrower
quickly. You can get the required funds through a bridging
loan and move ahead with the purchase of new house.
Payday loans - A Payday Loan can be defined
as a loan or advance that is put into your bank account or
provided as cash, in a short time period, usually within a
day. At the end of loan term the cash that you have borrowed
as a payday loan will be withdrawn from your bank account.
In short, payday loan is a short-term loan that is transferred
to your account within 24 hours.
Car loans – Car loan is a loan taken
to finance your car. Financing a car through car loans can
be done under the alternative of secured car loans and unsecured
car loans. Unsecured car loans require no collateral and secured
car loans require a collateral backing.
Home improvement loans – Home improvement
loans are that perfect solution for making any changes in
your house. Fixing the house, upgrading your kitchen or your
bathroom and all necessary home improvement that you don’t
seem to have money for can be fulfilled by home improvement
loans.
Education loans – Education loans can
take care of the expenses of education like tuition, accommodation,
books, computer etc. There is a wide variety of parent and
student loans, including federal, private, and consolidation
loans. Education loans are very convenient way of acquiring
the education you want. |
