Bank loans are available in a wide range of shapes and sizes, and when choosing the kind of loan to borrow, a Washington dc resident can be overwhelmed. Washington dc banks can offer loans to residents and businesses in order to pay college fees together with buying automobiles, businesses and houses.
There are various types of loans such as fixed rate, variable rate, convertible, installment, unsecured, and secured. Every loan type comes with unique repayment terms, and getting to know these terms can make is easier to choose the suitable loan.
One of the most popular consumer loans in the fixed-rate loan. This loan maintains a similar interest rate in its entire loan period. The rate of interest is in most of the times somewhat higher than a variable rate loan. The main merit of this type of loan is the fact that repayments remain the same in the entire loan period.
Variable-rate loans have fluctuating interest rates that are determined by the market or prime rate. With variable interest rates, the amounts that borrowers repay on home, car or student loans varies each month. With this loan type, the interest rate is basically less when compared to that of fixed rate loan. This makes it convenient for borrowers who wish to refinance a loan or for home buyers purchasing for the first time.
Installment loans are the types that repayments are made in equal amounts over a particular period of time. The time periods for repayment usually vary, ranging from about six months up to 30 years. Car loans and mortgage loans are examples of these types of loans. The terms of repayments for these loans are quite specific, the likes of a starting date, ending date, and the amount of interest to be paid by the time the loan life ends.
A secured loan is one backed up by collateral such as cars or loans. Home equity loans are good examples of secured loans. In a situation whereby the homeowner is unable to pay back the loan, his or her home will be repossessed by the bank. Examples of this loan type include business loans, home mortgages, car loans, boat loans and home equity loans.
In the case unsecured loans, no collateral is required. These loan types are typically offered to applicants having quite remarkable credit scores. However, they do charge quite high interest rates, in most cases matching with the credit score of the borrower. The higher the credit rating of the borrower, the better the interest rate of the loan they will be offered. Bank credit cards are good examples of unsecured loans, as well as other personal lines of credit.
Alterations can be done on convertible rate loans from one type of loan to another in the life of the loan. In most cases, these loans are home mortgages which begin as variable rate loans and later changed to fixed rate loans after a particular time period. Owners of small scale businesses apply for these loans to fund start-up costs, and then switch to secured fixed-rate loans.
Washington residents are left to choose the loans that suit them once they have gone through these types of loans offered by Washington dc banks. Getting any of the loans can be done quite easily, as long as the applicant fulfills the required terms and conditions.
You can visit the website www.cofcu.org for more helpful information about Loan Types That Washington Dc Banks Offer