Bank loans are offered in various sizes and shapes, and figuring out what kind of loan a Washington resident needs can be quite overwhelming. Washington dc banks offer loans to businesses and individuals to purchase businesses, homes and cars, as well as to fund college tuition.
Loan types include variable rate, fixed rate, installment, convertible, secured and unsecured. Each loan type has unique terms of repayment, and understanding the terms can ease the process of selecting the suitable loan.
A fixed- rate loan happens to be one of the most common type of consumer loan. Throughout its period, it maintains a similar interest rate. Most of the times, the interest rate is quite higher than in the case of a variable rate loan. The major merit of a fixed rate is that the repayments are the same throughout the time period of the loan.
Variable-rate loans have fluctuating interest rates that are determined by the market or prime rate. With variable interest rates, the amounts that borrowers repay on home, car or student loans varies each month. With this loan type, the interest rate is basically less when compared to that of fixed rate loan. This makes it convenient for borrowers who wish to refinance a loan or for home buyers purchasing for the first time.
Installment loans are those that are repaid in the same amounts over a specified time period. These time periods can range from several months to even thirty years. An auto loan or home mortgage can be considered an installment loan type. These loans have repayment terms that are quite specific, inclusive of a starting date, finishing date, and the interest amount paid over the loan life.
In a secured loan, the loan that is backed up by collateral, like a home or car. A home equity loan is a good example of such a loan. Should the homeowner fail to repay the loan, the bank will repossess the home. Car loans, home mortgages, business loans, home equity loans and boat loans are good examples of secured loans.
Unsecured loans include those that do not require collateral. Such loans are mostly offered to Washington dc residents with very remarkable credit scores. The interest rates are typically very high, usually corresponding to the residents credit score. The higher the borrowers credit rating, the more affordable the interest rate. Bank credit cards as well as other personal credit lines are examples of unsecured loans.
Convertible rate loans are capable of being altered from one loan type to the other throughout the length of the loan. These types of loans are in most cases home mortgages that start as a variable rate and then are altered to a fixed rate after a certain period of time. Owners of small businesses often apply convertible loans for start-up costs and later switch the business loan to a secured loan with a fixed rate.
After analyzing these types of loans that Washington dc banks offer, a resident can then select the one that caters for their needs. Making applications for these loans is not a difficult process, as there are simple requirements hat can be met by anyone. However, fulfilling the required terms and conditions is paramount.
Loan types include variable rate, fixed rate, installment, convertible, secured and unsecured. Each loan type has unique terms of repayment, and understanding the terms can ease the process of selecting the suitable loan.
A fixed- rate loan happens to be one of the most common type of consumer loan. Throughout its period, it maintains a similar interest rate. Most of the times, the interest rate is quite higher than in the case of a variable rate loan. The major merit of a fixed rate is that the repayments are the same throughout the time period of the loan.
Variable-rate loans have fluctuating interest rates that are determined by the market or prime rate. With variable interest rates, the amounts that borrowers repay on home, car or student loans varies each month. With this loan type, the interest rate is basically less when compared to that of fixed rate loan. This makes it convenient for borrowers who wish to refinance a loan or for home buyers purchasing for the first time.
Installment loans are those that are repaid in the same amounts over a specified time period. These time periods can range from several months to even thirty years. An auto loan or home mortgage can be considered an installment loan type. These loans have repayment terms that are quite specific, inclusive of a starting date, finishing date, and the interest amount paid over the loan life.
In a secured loan, the loan that is backed up by collateral, like a home or car. A home equity loan is a good example of such a loan. Should the homeowner fail to repay the loan, the bank will repossess the home. Car loans, home mortgages, business loans, home equity loans and boat loans are good examples of secured loans.
Unsecured loans include those that do not require collateral. Such loans are mostly offered to Washington dc residents with very remarkable credit scores. The interest rates are typically very high, usually corresponding to the residents credit score. The higher the borrowers credit rating, the more affordable the interest rate. Bank credit cards as well as other personal credit lines are examples of unsecured loans.
Convertible rate loans are capable of being altered from one loan type to the other throughout the length of the loan. These types of loans are in most cases home mortgages that start as a variable rate and then are altered to a fixed rate after a certain period of time. Owners of small businesses often apply convertible loans for start-up costs and later switch the business loan to a secured loan with a fixed rate.
After analyzing these types of loans that Washington dc banks offer, a resident can then select the one that caters for their needs. Making applications for these loans is not a difficult process, as there are simple requirements hat can be met by anyone. However, fulfilling the required terms and conditions is paramount.
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