Education loan interest subsidy scheme 2014

Principal debt is the money that the client receives directly from the lender to solve the tasks of the loan. It does not include interest, penalties in case of late repayment, other types of charges due to changes in the terms of the agreement. When the contract is signed, payment requirements are spelled out. Borrowers usually make monthly payments in equal installments. The fee includes the body of the loan, bank interest and other payments that are part of the principal amount owed to the bank.

A conventional loan is a type of mortgage, the peculiarity of which is the absence of state guarantees. On the one hand, it can be considered a certain disadvantage, but on the other hand, the non-participation of the state makes the terms of the loan much more flexible.

Collateral is a guarantee for the lender to get all the funds due under the loan agreement. In case the borrower does not fulfill his/her obligations or does not fulfill them to the full extent, the corresponding debt is to be repaid at the expense of the collateral. Collateral can be represented by residential and non-residential real estate, motor vehicles, precious metals, securities, etc. However, in fact, banks determine the list of property taken as collateral when granting loans. The property pledged as collateral under the loan must be necessarily evaluated.

In order to qualify for a FHA (Federal Housing Administration) loan you must meet certain requirements. First of all, you must have a sustainable income. Then, you should have at least 3.5% of the total cost of the house as a down payment. Your FICO score should be no less than 580. Finally, your credit history must be normal and the house you are going to buy should cost no more than the amount you applying for.

The repayment period is one of the key issues when choosing an offer. Without going into detail, it depends entirely on the type of loan, the terms and conditions specified in the agreement, as well as on how regularly you will repay the loan. In addition, some loans can be repaid before the maturity date, while in others prescheduled repayment is strictly punishable by creditors.

A bridge loan is an interim or auxiliary loan issued by a bank for a period of up to 1 year at a fairly high interest rate to cover the borrower's current obligations. Usually such a loan is a temporary measure until funds are available from the main source of financing. Such a loan can be taken out by both individuals and legal entities. It is especially widespread in the field of venture capital financing, which is an investment in a business in order to receive a percentage of the total profits in the future.

An FDA (Federal Department of Agriculture) loan means a government low-interest loan system designed for people who are unable to take advantage of a standard mortgage. The main features of FDA loans are that there is no down payment and that the borrower may only purchase a home in clearly designated rural or suburban areas.

In the case of FHA (Federal Housing Administration) loans the minimum acceptable credit score is directly related to the amount of the down payment. If we are talking about a minimum down payment of 3.5% of the property value, your credit score must be 580 or higher. However, if you can make a 10% down payment, the credit score requirement goes down to 500.

First of all, you need to know under what scheme you have to pay the loan: annuity or differential. Each of the schemes has its own formula, which can be found in a couple of seconds on the Internet. The repayment scheme is spelled out in the contract. You also need to know the basic terms of the loan, including the interest rate, and any additional payments.

The question is too general. The loan amount you can count on depends on a mass of various factors. To list just the most obvious ones, they include the purpose of the loan, the type of the loan, your credit history, maximum interest rate and repayment period you are ready to, and whether the loan is secured or unsecured.

The interest rate is the portion of the principal amount of the loan that the borrower must overpay to the bank for using its money. The interest rate can be calculated according to an annuity or a differential scheme. In the first case, the total amount of the loan is divided into several months or years in equal installments. With the second, the rate is charged on the balance of the loan and decreases with each month. Rarely a bullet scheme is utilized where the interest and the principal amount of the loan are repaid separately (first the principal and then the interest, or vice versa). If the rate changes at contractually specified periods, it is considered floating. If newly accrued interest is added to the interest calculated for the previous period (interest-on-interest scheme), it is considered capitalized.

Although the term has a rather wide range of meanings, in general, discount points are additional fees charged by the lender when issuing a loan. Through this fee in favor of the lender, the borrower is entitled to expect an appropriate reduction in the interest rate on the loan. In each case, the borrower should carefully evaluate whether it is advantageous to pay more as an upfront fee but receive a lower interest rate for the entire term of the loan, or to choose a higher interest rate with a lower down payment.

First of all, it all depends on what type of credit you are interested in and for which exact amount you are expecting. The requirements will vary depending on the particular loan provider, as well as the specifics of state or national lending laws. In general, though, it's usually a set of documents proving your identity and source of income, as well as your ownership of the collateral.