Articles About Cash And Money

A Guide to Common Loan Terms

Many people may wonder about common loan terms... words and phrases that are often tossed about when describing different types of loans that are assumed to be common knowledge.

These common loan terms represent very important parts of the lending process, but to the person who isn't entirely sure what the terms mean they can be quite intimidating and cause the person to feel very uneasy about getting a loan.

They might delay applying for a loan that they need because of a failure to understand common loan terms, and in doing so can miss out on better rates and the potential to save a lot of money in the long run.

Interest, Capital, and Interest Rates

Interest and interest rates are common loan terms that are a key part of the lending process, but many people might not know exactly how interest and interest rates work.

At its most simple, interest is the additional amount that you pay over the loan amount in order for the lender to make a profit off of you doing business with them. In other words, the interest that you pay is the amount that you pay for the service of lending, while capital is the amount that you repay because it is what you borrowed in the first place.

Interest rates are the percentage of the capital that you'll pay in interest... for instance, if you have an interest rate of 5% on a loan then you'll pay an additional 5% to the loan amount in interest.

Annual Percentage Rate (APR)

The annual percentage rate (also known as APR) is one of the common loan terms that some people have the hardest time understanding.

The annual percentage rate is most often seen on credit cards, and is an indication of how much interest you will be charged on your credit card balance over the course of the year.

The lower the APR is on a credit card, then the less you'll have to pay in interest as the year goes by... you should keep in mind, though, that the annual percentage rate can change over the course of the year due to fluctuations in the cost of living, inflation, and a change of interest rates that are set on the national level.

Collateral, Secured Loans, and Unsecured Loans

These common loan terms can cause quite a bit of confusion, especially to someone who is shopping for their first loan.

Collateral is an object of value that is used to guarantee repayment of a loan, and is the difference between secured and unsecured loans.

Secured loans are loans that have collateral backing the loan, and usually have lower interest rates... they charge lower rates for secured loans because if you fail to repay the loan then the lender can take possession of the collateral and sell it to regain their money.

Unsecured loans don't have collateral, but charge higher interest rates in exchange.

Equity

One of the common loan terms that seems harder to understand, equity is a major factor in secured loans that use real estate and the borrower's home as collateral.

Equity refers to the percentage of the home or real estate's total value in comparison to the amount still owed on the original loan used to purchase it which is known as a mortgage.

It's often referred to as the amount of the home or property that the owner actually "owns", as opposed to the portion of the value that's still held under mortgage.

The more money a person pays toward their mortgage, the more equity they have in their home.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

MORE ARTICLES:

Shaking Your Money Tree: Seven Ways to Make Quick Cash
Does your business have a money tree you can shake when a little extra cash is needed? Every business should have one!What I mean by a money tree is something you can do to quickly generate revenue when you need it. Where can you find a money tree? Although you can't buy one at your local garden store, they are more common than you might imagine.

Advance Cash Loan Military - Cash Advance Loans For Servicemen
Everyone is quite aware of the fact that people in the armed forces do not earn very high salaries in comparison to people in many other sectors So, it is quite common for these people to face up with many financial difficulties at various points of time

Quick cash loans- Viable and reliable way to have instant cash
Introduction:

Online Payday Loans Offer Quick or Instant Approval For a Fast Cash Loan
Online payday loans companies offer quick approval with their online application process. Once you have entered your personal information and source of income, you can be approved for a payday loan in as little as five minutes, and a cash advance can be deposited in your checking account the next day.

Payday Loans Cash Advance Fast Money Canada 310-Loan
Come payday and everybody is truly happy, a few days into the month and when the cash situation starts getting a little tight we tend to look forward to the next payday. After receiving the pay, the routine is to first settle all the bills. After this customary practice is completed the amount remaining is the actual disposable income which may be insufficient in case of a contingency. A Payday loan would be ideal in such a situation.

First Cash Loan: Cash To Meet Your Financial Emergencies
Life is unpredictable. No one knows what will happen in the next moment. Cash is something that one may need for any reason, any time. Shortage of cash leaves a person in a firtghtening position. For most people a financial crisis is not unexpected towards the end of the month. However, there are other expenses like medical emergencies, school fees, maintenance of a vehicle that will place everyone under pressure. To meet all these basic family expenses Fast cash loan is a handy and convenient way to get cash in advance. Considering all these things Direct Cash Now has come up with its fast cash loan offer, a fast application process to provide you the money when you need it.

Faxless Payday & Cash Advance Loans - Fast Cash, No Faxing Loans, The Easiest Payday Loan Process
If you are in a hurry for a payday loan, the last thing you want to have to do is fax in your documents of verification. That's no problem, nowadays, you can find many payday loan or cash advance loan companies that can verify your income and identification without you having to fax in any documents.

Cheap Payday Advance Loan: borrow money through cheap payday advance loan
Resources are limited for lending money and requirements of money are plenty because the people meet day to day worthless expenses. Diminishing these problems cheap payday advance loan gives you a potential offer. Cheap Payday Advance Loan is the short-term loan availed between two consecutive paydays. Cheap Payday Advance Loan can be availed by all the people who are working and earning enough to repay the Cheap Payday Advance Loan. Credit history does not matter to borrow Cheap Payday Advance Loan for the lenders who provide Cheap Payday Advance Loan, whether you have good credit history or bad credit history you are eligible to avail Cheap Payday Advance Loan.

Saving Money: Quick Cash, High Cost
I didn't think it was possible. But it is.

Cash Advance until Payday-Emergency Cash Loan
Introduction

Payday Cash Loans: Urgent Money till Next Payday
You never know when you will be in a tough situation and will require money within a short notice. Nobody can foresee the future and the future is not in your control. A sudden utility bill of an unexpected amount or any medical emergency can make you suffer financially. Even in the days of festivals you may need some urgent cash to buy gifts for your friends and family. You may not have sufficient reserve of funds to meet the urgent requirements and the next payday may also be far away. In those situations you can apply for a payday cash loan.

Advance Loan Launches Its New Online Direct Cash Advance Loans Service
AdvanceLoan.Net now lets customers apply quickly online, with no faxing or references needed, and they can receive their cash advance in as little as 1 hour.

Quick Cash Loans Online - A Fast Way to Get an Emergency Cash Advance
If you need a fast way to get an emergency cash advance, then apply for a quick cash loan online. Payday loan companies now offer instant approval with their paperless process.

Cash Til Payday Loans - When Is The Best Time To Get A Quick Cash Loan
There are times when a cash advance loan or payday loan may be a good way to get you out of a tight, financial scrape. There are times when a payday loan may be a wise decision.