If the loan company does approve Lesley’s loan, the provision is likely to be part of the loan agreement is that Lesley will have to pay a higher interest rate.
What is loan?
A loan is total of money that one or more individuals or companies borrow from banks or other financial institutions so as to financially manage planned or unplanned events. alter this the borrower incurs a debt, which he has to pay back with interest and within a given period of time.
what are types of loans?
Secured and Unsecured Loans- A secured loan is one that is backed by some form of collateral. For instance, most financial institutions require borrowers to present their title deeds or other documents that represents ownership of an asset, until they repay the loans in full. Other assets that can be put up as collateral are stocks, bonds, and personal property.
Open-End and Closed-End Loans- A loan can also be explained as closed-end or open-end. With an open-ended loan, an individual has the freedom to borrow over and over. Credit cards and lines of credits are perfect examples of open-ended loans, although they both have credit restrictions. A credit limit is the highest sum of money that one can borrow at any point.
Conventional Loans- The term is often used when applying for a mortgage. It refers to a loan that is not insured by government agencies such as the Rural Housing Service (RHS)
What is interest?
Interest is the rate lenders charge individuals to borrow money. Interest is the cost of borrowing money. The amount you borrow is typically referred to as the principal amount. The lender can charge a fixed percentage, known as an interest rate. Or, interest can be a flat amount or fee. The interest rate determines the amount of interest the borrower must pay
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