Personal loan interest rates today

There are several classifications of loans, so let's consider the most common one. According to it, there are three loan categories: bank, commercial and state. In its turn, bank loans are divided into personal, mortgage, loan on overdraft, factoring, forfeiting and intrabank loans. Commercial loans may be of the following types: signature, trade and advance. Finally, the state category is subdivided into state loan, subventions, grants, transfers and state tax loan.

A recourse loan or debt entails personal liability of the borrower. A non-recourse loan does not allow the lender to claim anything other than collateral. For example, if someone fails to repay a non-recourse mortgage loan, athe lender may only foreclose on the real estate that was the collateral.

A VA loan represents a mortgage loan guaranteed by the Department of Veterans Affairs (VA) of the United States. The program is for veterans, various military personnel currently doing military service in the army, reservists and spouses (provided they do not remarry). It can be used to buy single family houses, condominiums and apartment buildings, as well as for building new houses. You can apply for a VA loan multiple times, as long as you meet the above requirements.

Loan default is a default on a loan agreement, i.e. failure to timely pay interest or principal on a debt obligation or under the terms of a bond issue agreement. Consequently, a person who defaults on a loan is considered a loan defaulter. Penalties for loan defaults are applied according to the type of loan and the specific terms of the contract.

The thing is, the Department of Veterans Affairs doesn't confirm the loan but makes specific requirements that appliers must follow to obtain the VA guarantee. One of those requirements strictly limits the amount you can loan based upon a formula called your 'debt to income ratio' or just 'debt ratio.' This parameter is a percent-denominated value which is calculated by dividing exact debt obligations by your monthly income.

An FHA loan is a Federal Housing Administration guaranteed low down payment mortgage loan that allows you to purchase your first home. FHA loans help families become homeowners by lowering the cost of financing and reducing the size of the down payment that makes it difficult to purchase a house. According to the Mortgage Reports website, approximately 20 percent of eligible buyers apply for and receive an FHA loan due to moderate credit history and income requirements.

Most companies try to maintain a positive reputation in the market and conduct a transparent lending policy. However, there are some that are interested only in increasing profits. Often under the guise of favorable programs they use hidden fees, additional commissions and unreasonable fines, which lead customers to a debt pit. There are many parameters that may underline such companies. Among the main ones are the following: solvency and sufficient liquidity reserve, size and structure of equity capital, quality of the loan portfolio, information on the management, reputation and information transparency. You should also check for information on the company at Better Business Bureau and similar resources.

A micro lender is a type of lending institution that specializes in providing small ammounts of money. Since micro-lending is not accompanied by collaterals, the risks for the lender increase exponentially. Because of this, the interest rate on microloans is usually very high. In addition, the activity of micro lenders is strictly controlled by state authorities, especially in terms of collecting outstanding loans.

A subprime loan is a loan that is accompanied by a high level of risk for the lender. Most often the cause of high risk is the status of the borrower (poor credit history, low income, etc.) or the terms of the loan (no collateral for a high loan amount, poor quality of collateral).

A direct loan is a form of low-interest student credit administered by the Department of Education. A student may have more than one direct loan at a time. In addition, direct loans are divided into subsidized and unsubsidized loans. Under subsidized loans, the borrower is partially exempt from paying the interest rate.

Each banking institution has its own procedures, rules and methodologies for examining and analyzing the creditworthiness of a potential borrower applying for a loan. The underwriting procedure results in a positive decision on the loan application or refusal to grant a loan, or a compromise decision: granting a loan, but in the amount and/or under the conditions that are favorable to the bank, even if they differ from the client's expectations. That is, a credit underwriter is a specialist who makes such decisions.

A bridge loan is a type of short-term lending in which a loan is granted for a fairly short period of up to 1 year at a high interest rate to pay the current obligations of the borrower.

The key difference between secured and unsecured loans lies in their very name. Secured loans are guaranteed by the borrower's property or assets, which protects the lender to a much greater extent. Unsecured loans do not require collateral, so there is more risk for the lender. These risks need to be compensated somehow, so the terms and requirements in unsecured loans are tougher than in secured loans.