What is a loan?✔
A loan is when someone( a lender) gives money to another person( the borrower) for exchange of future payment plus interest.
Loans can be secured or unsecured.
A secured loan means that there is an asset attached to the loan. This asset belongs to the borrower and if the borrower doesn't repay the loan then the asset will then be taken by the lender to repay the loan,The lender holds on to your asset as collateral through a title deed.Secured loans are usually cheaper as the lender has less risk.
Unsecured loans on the other hand do not have this feature and the borrower can default without losing any attached asset.Unsecured loans are usually more expensive as the lender has more risk.
This doesn't mean the borrower will not eventually lose an asset though.
If you fail to repay your loan the lender can sell your debt to a debt collection agency which can then get court approval to seize your property if you continue to fail to repay the loan.
Types of loans✔
Loans can be mortgages, car loans, personal loans, student loans , homeowner loans and more.
Loan APRs, terms & fees.
The most important factor of all loans should be the interest charged now referred to as the APR, the term(so how long the loan will be for), any fees charged by the lender for processing the loan(which will be included in the APR) and your monthly repayments.