There are lots of forms of loans and personal lines of credit: mortgages, bank cards, HELOCs, figuratively speaking, and even more. All of them end up in 1 of 2 groups: secured and credit card debt.
Secured finance and credit lines
Secured finance and personal lines of credit are “secured” because they’re backed by some asset that is underlying a house or a vehicle. The lender gets to keep the asset if you can’t pay back the loan or default. These types of loans and lines of credit tend to have lower risk for the lender and lower interest rates as a result.
Typical kinds of secured finance and lines of credit consist of: mortgages, HELOCs, automobile and automobile loans, and investment loans and margin. [Read more…]