Personal Loans and Lines of Credit
Basically, there are two types of products for individual customers – secured and unsecured. The latter are offered to existing customers and creditworthy borrowers because banks take more risk. Those with no credit exposure or compromised credit are more likely to qualify for a secured loan whereby collateral is required. It can be in the form of a vehicle, real estate, jewelry, gold, antiques and collectibles, or anything of value. Credit unions, caisses populaires, banks, financial companies, and car dealerships offer different products, including student, auto, home, personal, and other loans. Other types of products include fixed and variable rate, single-payment, installment, and convertible loans. There are also payday lenders that offer short-term solutions with extremely high interest rates. Installment products, for example, are offered to borrowers who wish to purchase a car, property, or another expensive item, to make home renovations, etc. Another option is to apply for a line of credit which is a type of revolving credit. It is offered to businesses, individuals, and government agencies. This product comes with a maximum balance, and borrowers are allowed to draw on the line up to the available balance. A home equity line of credit is another option. In this case, the home of the applicant is pledged as collateral.