Introduction to Leveraging Property for Loans Understanding the Basics of Collateral Collateral is a borrower’s pledge of specific property to a lender, to secure repayment of a loan. The collateral serves as protection for a lender against a borrower’s default—that is if the borrower fails to pay the principal and interest under the terms of…
The Basics of Credit Card Debt and Bankruptcy Defining Credit Card Debt Accumulating debt on your credit card is akin to taking a loan from your card’s issuer which is instantly used to make purchases. This type of debt falls under the umbrella of unsecured debt, signifying that there is no collateral to secure the…
What is collateralization? Collateralization is using a valuable asset as collateral to secure a loan. In this type of loan arrangement, the borrower pledges an asset to the lender, and in case of a loan default, the lender has the right to take possession of the asset and sell it to recover the loan’s outstanding…
What is amortization? Amortization is an accounting technique used to spread out the cost or value of an asset, such as a loan or an intangible asset, over time. It is a process of paying off a debt through regular installments of principal and interest, which are predetermined. The payments usually remain the same throughout…
What is a business debit card? A debit card for business is a form of payment that allows users to make purchases at point-of-sale using their business checking account or savings account. A debit card is linked directly to the user’s business checking account or savings account, which is then converted into cash. Business debit…
What is loan principal? When you get a loan, the money you borrow is called the principal. The principal is the amount of money that you owe to the lender. In addition to paying back the principal, you will also have to pay interest on the loan. The interest is what the lender charges for…
Cross Collateralization Cross collateralization is a relatively new term in the world of secured loans. It is similar to collateralized loans, but with one key difference: the personal assets used as security for the loan are spread across multiple loans. This means that if you default on one loan, the loan specialists have the legal…
Amortization vs. Simple Interest Loan The choice of amortization vs simple interest loan might not be the most exciting thing you think about when paying for a car, but it is important. Your loan type will affect your monthly payment, how much interest you pay over the life of the loan, and even the total…
What are debit card processing fees? Debit card processing fees refer to the fees charged by payment processors, banks, and card companies (Visa, Mastercard, etc.) when a customer pays with a debit card. These fees typically include the following: These fees may vary depending on the size of the bank that issued the card, the…
How does cross collateralizing a loan work When you borrow money, the lender will usually require some collateral. This allows them to recoup their losses if they cross default on the loan. Cross collateralization is when you use more than one asset as collateral for a loan. For example, if you have a home equity…
