Loans & Credit FAQs
Understand borrowing costs, payments, credit and debt-management concepts.
How is a loan payment calculated?
For many fixed installment loans, payment depends on principal, periodic interest rate and number of payments.
What is APR?
APR is an annualized borrowing-cost measure that can include interest and certain finance charges.
What is the difference between secured and unsecured debt?
Secured debt is backed by specified collateral; unsecured debt is not secured by specified collateral.
What does loan term mean?
The loan term is the contractual repayment period. Longer terms often lower payments but can increase total interest when other factors are unchanged.
What is DTI?
Debt-to-income ratio compares recurring debt obligations with income. Use the DTI Calculator.
What is a credit score?
A credit score is a numerical measure used by certain scoring systems to summarize credit risk based on information in a credit file.
Does checking loan offers affect credit?
The effect depends on the type of inquiry and credit system. Consumers should review how a lender performs rate checks before applying.
Can I repay a loan early?
Many loans allow early repayment, but contract terms may contain restrictions or charges. Review the agreement.
How can I compare two loan offers?
Compare payment, APR, interest rate, term, fees, total repayment, prepayment terms and other conditions—not payment alone.
What happens if I miss a payment?
Consequences can include fees, delinquency reporting, default or collection activity depending on the agreement and jurisdiction.
General education only. Credit scoring and lending rules vary by market and lender.