Unsecured loans are not backed by any collateral. You can borrow money on the strength of your good credit and ability to repay himself.
vs revolving loan rate
Revolving and installment describe the amount of time you will have to repay the loan. With revolving credit, you have access to a continuous source of credit to your credit limit. You pay only the amount of credit you use, plus interest on the unpaid amount. You can re-borrow the principal you paid for. So the loan could remain "open" for years.
With a meal credit, you pay the agreed amount, which includes principal and interest each month. Each payment reduces the loan balance until it is paid off. There is a fixed end date, known as term loans.
Fixed vs. Adjustable rate loans
Fixed interest is just that. You and the bank agree to a certain interest rate, and remains constant during the life of the loan. Fixed interest rates give you the stability of always knowing what your payment will be, so you can budget accordingly.
Adjustable or variable interest rate changes. It is usually tied to prime rate - the interest U.S. Treasury charges its best borrowers. When the prime rate is high, such as during periods of inflation, the more you pay. When the prime rate is low, such as when the government tries to stimulate the economy in recession, and save on interest. If you need to borrow during periods of high interest, the payment will drop a prime rate drops.
Auto loans:. Secured loan where the collateral is the car buying
Credit cards: unsecured loan that lets a line of credit from which you can borrow by presenting a plastic card the dealer from whom you purchased the item. You can make more than one purchase, the credit limit.
Personal Loans. Secured or unsecured loans are fixed for the purpose of mortgages: Secured loan where the collateral is real estate you are buying
Home equity loan: a loan secured by a fixed amount by which the collateral is your home. In some cases, the interest on this loan May be tax deductible. See your accountant.
Home equity line of credit: secured, revolving line of credit in which the collateral is your home. In some cases, interest on the loan or part may be tax deductible. Consult a tax professional or accountant.
Home improvement loans: secured loan for a lump sum fixed amount by which the collateral is your can be spent at home on this loan May be tax deductible. Consult a tax professional or accountant. (In some parts of the country, home improvement loan "secured the equity in your home" may not be available. In these areas, unsecured home improvement loan will be available .)
Student loan (Stafford Loan) loan for college expenses is guaranteed by the U.S. Government. The loan was approved for a student. Payment is deferred, the student is still in school.
Personal credit lines: Unsecured loans allowing you access to up to a fixed credit limit
