What Are Loans, and How Do They Work?
Need to make a big purchase but don't have the liquid cash to cover the entire cost? Whether you're paying for a car, a new home, school tuition or something else, a loan helps you get the extra money you need while allowing you to pay it back over time. But different loans exist for different purposes and have different provisions, so it might not always be clear which type you need.
While borrowing any amount of money can be intimidating, when done correctly, it can help boost your overall financial health and even your net worth over time. But it's important to start at the beginning. To help you navigate the world of lending, we’re breaking down some loan basics. From the different types of loans to how a lender determines the interest rate you pay, think of this as your go-to guide to the fundamentals of lending.