Types of Personal Loans

6 Questions

Match the types of loans with their key considerations:

Personal loans = Unsecured, higher interest rates for small amounts Cash advances = Extremely high interest rates, last resort for small amounts Student loans = Reasonable interest rates, can lead to substantial debt for recent graduates Mortgage loans = Secured by property, tax-deductible, low interest rates for buying homes

Match the loan products with their usage:

Home-equity loans and lines of credit = Borrow against house equity for home improvements, debt consolidation Small business loans = Available from local banks, require business plan and personal assets as collateral Personal loans = Easier to obtain, typically for small amounts with average credit history Cash advances = Easy to get but come with extremely high interest rates, last resort for small amounts

Match the loan types with their potential impacts on borrowers:

Student loans = Can lead to substantial debt for recent graduates Mortgage loans = Enable individuals to buy homes with structured terms and tax-deductible, fairly low interest rates Home-equity loans and lines of credit = Allow homeowners to borrow against their house equity for home additions, improvements, or debt consolidation Small business loans = Require more work, often needing a business plan and personal assets as collateral in case the business fails

Personal loans are often ______ and easier to obtain with an average credit history, typically for small amounts not exceeding $5,000, but with higher interest rates than secured loans.

unsecured

Cash advances are easy to get but come with extremely high interest rates, usually for small amounts, and should only be considered when no alternative ways to get money ______.

exist

Mortgage loans are typically the biggest loans, secured by the purchased property, and enable individuals to buy homes with structured terms and tax-deductible, fairly low interest ______.

rates

Study Notes

Types of Loans and Key Considerations

Personal loans are often unsecured and easier to obtain with an average credit history, typically for small amounts not exceeding $5,000, but with higher interest rates than secured loans.
Cash advances are easy to get but come with extremely high interest rates, usually for small amounts, and should only be considered when no alternative ways to get money exist.
Student loans, such as Stafford and Perkins loans, are common and offer reasonable interest rates, but can lead to substantial debt for recent graduates.
Mortgage loans are typically the biggest loans, secured by the purchased property, and enable individuals to buy homes with structured terms and tax-deductible, fairly low interest rates.
Home-equity loans and lines of credit allow homeowners to borrow against their house equity for home additions, improvements, or debt consolidation, with tax-deductible, fairly low interest rates.
Small business loans are available from local banks and require more work, often needing a business plan and personal assets as collateral in case the business fails.

Types of Loans and Key Considerations

Personal loans are often unsecured and easier to obtain with an average credit history, typically for small amounts not exceeding $5,000, but with higher interest rates than secured loans.
Cash advances are easy to get but come with extremely high interest rates, usually for small amounts, and should only be considered when no alternative ways to get money exist.
Student loans, such as Stafford and Perkins loans, are common and offer reasonable interest rates, but can lead to substantial debt for recent graduates.
Mortgage loans are typically the biggest loans, secured by the purchased property, and enable individuals to buy homes with structured terms and tax-deductible, fairly low interest rates.
Home-equity loans and lines of credit allow homeowners to borrow against their house equity for home additions, improvements, or debt consolidation, with tax-deductible, fairly low interest rates.
Small business loans are available from local banks and require more work, often needing a business plan and personal assets as collateral in case the business fails.