Loans are a necessary part of life. They allow consumers to buy houses,
cars, and furniture, and they help to pay for college. Loans allow business owners to expand their facilities, improve their inventories, and even
weather tough times.
The specifics of the loan depend on many things. Some
of the questions you have to ask yourself are: Is the loan secured? (Do I have
some assets that the lender will get if I don’t pay the money back?) How long
will I be borrowing the money? Will I pay the money back all at once, or will I
pay it back in installments?
A credit card balance is also a form of a loan
Loans come in one of several forms. For instance, they can be in the form of a
promissory note or a discount note. Discount notes are called such because
the interest amount is deducted from the amount that’s borrowed. A credit
card balance is also a form of a loan.
This type of loan doesn’t have a set end
to it — you pay back the balance, but not necessarily for any fixed amount of
time. Installment buying is another form of a loan. And, finally, there are personal property or business loans.
You need to arrange for the type of loan that best fits your needs. And you
better know the ins and outs of the numbers involved. After all, you don’t
want to get involved in a loan that costs more than it should or that puts you
into a position that you don’t want to be in. This chapter helps with all this