What Are The Different Types Of Loans Flashcards
(26 cards)
What are the different types of loans?
Credit cards, store cards, personal loans, interest free deals, home loans, payday loans
What is credit?
The ability of a consumer to obtain goods or services before payment,based on the trust that payment will be made in the future.
What are the advantages of credit?
Credit is convenient
You may save money eg, because you can take advantages of sales
Credit can help if you don’t have money for emergencies because you don’t have to pay on the spot
You can buy things that are needed now when you don’t have enough money to pay for them
What are the disadvantages of credit?
Credit usually costs more then paying cash
You may but more then you can afford
When you use credit, you owe money that must be paid back
What are interest free deals?
An arrangement between a company and a consumer where the payment is able to be given after a certain period of time with no extra payment
What are the advantages of interest free deals?
More time to pay
able to save up money to pay back
What are the disadvantages of interest free deals?
Chance of falling debt of a consumer doesn’t pay within the time period, may lose more money in the long run
When is credit used?
Credit is borrowed money that you can use to purchase goods and services when you need them.
How do you get credit card loan?
You get credit loan from a credit grantor whom they agree to pay the amount you spent.
What are personal loans?
When a bank or a person lends money to a consumer for private reason such as medical payment, education or simple money for vacations or other entertainment objects.
What are the advantages of personal loans?
Does not require any collateral
Easy access
Apply for a loan online
Can be for variety reasons unlike housing loans which can be for only purchasing household items and transportation
Apply for the loan doesn’t take as much time as the other loan offering
All other loans requires a collateral security except the personal loan
What are the disadvantages of personal loans?
Can carry very high interest rates
Insecure in nature
Not easy to obtain
Need to have a good credit rating and history
Many banks and financial institutions do not allow part repayment and results in bigger higher interest
What is a payday loan?
A relatively small of money lent a high rate of interest on the agreement that it will be repaid when the borrower receives their next wages.
What are the advantages of payday loans.
Good cash advance who can pay them back on time
Hassle free
Fast source of cash in a financial emergency
How many hours does it take to get a payday loan?
Will only take only 72 hours on man and is convenient to access. Online lenders are a good source and the option of having payday loan rates comes in handy
What happens if you card for payday is broken?
Don’t require a credit report, so if you credit card is broke, or you aren’t able to use it, for you to have a payday man, won’t be affected.
What are the disadvantages of payday loans?
Rates range from 10-30% failing to fulfill the repayment on time will consequence in doubling the interest
People in debt are recommend not o use a payday loan
There are for a short period of time so if you need a loan for several months, a payday loan won’t help you
Payday loan only supports small amounts of money
Should read contract carefully as fraud could be possible
What is the maximum number of days to pay back for the payday loans?
30 days maximum to pay back the loan with the interest, depending on your repayment plan
What is a home loan?
Home loans are a loan advanced to a person to assist in buying a house or flat
Why is the home loan advanced?
A loan is advanced to people to assist them when buying houses or flats.
What are the home loans secured by?
These loans are secured by property or real estate which is called a mortgage.
What are the advances of a home loan?
You don’t have to pay the full price at once
There are family discounts on a wide range of quality products and services
Monthly payments will be significantly lower - it will be useful if you have tight budget
It can allow to buy other essential products instead using a big amount of house such as a house
What are the disadvantages of a home loan?
Have to pack back the same amount of money you borrowed
Interest rates go up and down over time
Regretting the decision for example you have to make smart decisions whether to wait for the interest rates to go down or buy the house with high interest rates
You have to keep paying the loan according to how you have the home loan for
What are store cards?
A credit card that only be used in one store or chain of stores
