Educational Resources - Borrowing Basics
Types of Credit
Cost of Credit
Applying For Credit
Manage Your Credit
Types of Credit
Consumer Installment Loans
A consumer installment loan can be used to make large purchases or to pay for personal
expenses for you and your family. Such loans are usually repaid over a number of
months or years by making monthly or periodic payments. The following are examples
of consumer loans:
- Auto loans are used for buying automobiles. The automobile that is purchased is
used as collateral for the loan. Collateral is what you promise to give to the lender
if you do not pay back the loan.
- Personal loans are unsecured loans that are often used for short-term needs.
A loan can be secured by collateral. Collateral is what you promise to give to the
lender if you do not pay back the loan.
- You can use the car or home you are purchasing with a loan as collateral. There
are other items you can also use as collateral.
- When a loan is secured by collateral, the lender can take the item if you do not
pay back the loan.
Credit/Department Store Cards
Credit cards give you an ongoing ability to borrow money for household, family,
or other personal expenses.
Home loans are secured by your home. There are three main types of home loans.
- Home loans are secured by your home. There are three main types of home loans.
- Home refinancing is a process by which an existing home loan is paid off and replaced
by a new one.
- Home Equity loans are secured by a property of the borrower. The amount of the equity
is the value of the property minus the debt. Home equity loans generally can be
used for any purpose.