Types of Loans and Credit

Front

Used to finance a specific purchase for a specific amount of time. Regular payments are made to pay the interest and the principal.

Back

Installment Loans

Front

An open line of credit that can be used for any purchases as long as you’re under the credit limit. Payment amounts vary each pay period based on the size of the debt.

Back

Revolving Credit

Front

Debt is tied to a specific asset that can be used as collateral and repossessed if borrower doesn’t make payments.

Back

Secured Debt

Front

Debt is not tied to a specific asset; there is no collateral that can be repossessed if borrower defaults.

Back

Unsecured Debt

Front

Interest rate can change during the duration of the loan based on the prime rate or an index rate.

Back

Variable-Rate

Front

Interest rate remains constant during the duration of the loan.

Back

Fixed-Rate