Obtain a Loan

Qualifications to Receive a Loan:

• Credit score and history.
• Income and job history.
• Debt-to-income ratio.

Predatory Loaning: When people are in dire need of money, they may be tempted to take out a loan from lenders who do not have their best interests in mind.

Examples of predatory lenders:

• Payday lenders
• Car title lenders
• Subprime mortgage lenders

How to recognize predatory loans:

• Extremely high-interest rates
• Hidden fees or charges
• Targeting vulnerable populations
• Aggressive marketing tactics
• Encouraging repeated borrowing
• Little regard for the borrower’s ability to repay

Secured Loan: Requires collateral (something valuable) to get the loan. If the borrower fails to repay, the lender can take the collateral.

Examples:

• Mortgage
• Auto loan
• Home equity loan

Unsecured Loan: Does not involve collateral. The lender provides the loan based on the borrower’s credit score and financial history.

Examples:

• Personal loan
• Credit card