Loans & Borrowing

A type of credit where you receive a lump sum from a lender and repay it in fixed monthly installments, usually over 12 to 60 months. They are typically unsecured, meaning no collateral is required, though secured versions backed by an asset like your home or car often carry lower rates. Unlike a mortgage or car loan, a personal loan can be used for almost any purpose, such as consolidating debt, home improvements, or medical expenses.

An installment loan that lets you buy a vehicle and pay the total cost over time, including interest. The principal is the amount you borrow and interest is the lender’s fee, with the vehicle itself typically acting as collateral, meaning it can be repossessed if payments aren’t made. Terms usually run 36 to 72 months, and shorter terms mean higher monthly payments but lower total interest.

Borrowed money used to pay for higher education expenses such as tuition, fees, books, and living costs, offered by the federal government or private lenders like banks and credit unions. Repayment generally begins after graduation or when you drop below half-time enrollment, though some private loans require payments while in school. Federal loans tend to have lower fixed rates and access to programs like income-driven repayment and forgiveness, which private loans do not offer.

A sum of money borrowed from a lender to fund business needs such as purchasing equipment, expanding operations, or managing cash flow, usually repaid over a set term with interest. It can be secured, backed by collateral like property or equipment that the lender can seize on default, or unsecured, which requires no collateral but carries higher interest rates. Terms range from short-term (1 to 3 years) to long-term (up to 30 years) depending on the loan’s purpose.

The period during which you agree to repay a loan, including both principal and interest, usually expressed in years or months. It directly shapes your monthly payment and the total cost of borrowing: shorter terms mean higher monthly payments but less interest overall, while longer terms lower the monthly payment but increase total interest paid. Terms are commonly grouped as short (1 to 5 years), medium (5 to 10 years), and long (15 to 30 years).

The percentage of a property’s value that you are borrowing, calculated by dividing the loan amount by the appraised value or purchase price (whichever is lower) and multiplying by 100. It measures risk for the lender, so a higher LTV is riskier and often means higher interest rates or a requirement to pay Private Mortgage Insurance. Keeping LTV at 80% or lower typically helps you avoid PMI and secure better loan terms.

A car loan arranged through a dealership rather than directly through a bank, credit union, or online lender. In many cases the dealership isn’t the lender itself but acts as a middleman, sending your credit application to lenders it works with and presenting their loan offers as part of the purchase. It is convenient because the loan and vehicle sale are completed together, but the dealer may mark up the rate, so the terms aren’t always the cheapest available.