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Personal finance: Why interest rates are different for different kinds of loans

When taking a loan there can be 2 ways if interests, a Simple interest (which can be calculated only on the principal amount of the loan) and a Compound interest (which can be calculated on the principal and on interest earned). So for the amount of loan that you have, you would have to calculate it by using the Simple interest formula. As for the interest that you earn, you would have to calculate it using the Compound interest formula. Consumers commonly take on loans to finance home purchases, education, debt consolidation and general living expenses. For the growing small business, loans are available for working capital, equipment, real estate, expansion, and inventory purposes. The most common consumer loans come in the form of installment loans. These types of loans are dispensed by a lender in one lump sum, and then paid back over time in what are usually monthly payments. The most popular consumer installment loan products are mortgages, student loans, auto loans and personal loans. In general, lenders use consumer’s credit score. Installment loans can come as either secured or unsecured. Secured loans are backed by collateral, meaning that the lender can seize the borrower’s collateralized asset if the loan isn’t paid back. Unsecured loans are not secured by collateral, and lenders have a more difficult time recouping their losses for these loans if a borrower defaults. In general, larger loans and specific purchase loans like mortgages and auto loans are secured.

And that’s it for my essay hope it was use full!! And thx for reading!

~AL

42 thoughts on “Personal finance: Why interest rates are different for different kinds of loans

      1. Np ๐Ÿ˜›

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      2. i hv to post a few more tho… and i hv a massive headache rn like yyyy

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      3. Loll, same.

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      4. wow u too… like yaa headaches suck -.-

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      5. Yeah. Especially when you have to go to a party with a headache. Ughh

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      6. Aw man, I hate it when it converts so an emoji.

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      7. lololololol glad u hv a gr8 sense of humor

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      8. I do? Thanks. My dad thinks my sense of humor is dry..

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      9. well *shrugs* it was just my opinion tho
        so wait u are going to turn 14 right?

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      10. yup meaning wot ur gonna turn 14?

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      11. Yes. Lol.

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      12. oh ok cool ur just like my brother his bday is on ground hogs day lmao!!

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      13. Loll, and how old are you?

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      14. omg i keep saying lmoa not lmao XD

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      15. it says i cant reply is it replying?

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      16. Uh, well. I don’t see any replies in my feed.

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      17. oof.. are yall still doing the rp?

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      18. Trying to do the rp. I’m trying to get things done and do the rp. Poor Brooke. Lol. She thinks I’m mad cause I’m not replying.

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      19. I’m trying to post my essays. But then I have to re-arrange a ton of other stuff. And, phooey. I’m kinda procrastinating.

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      20. hahahahaha!!! lmao im writing my essay and talking to u
        it actually works
        should i not disturb u or something?

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      21. No no, I’m fine.

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      22. i cant believe ur actually kinda brookes age tho haha

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      23. NGL i kinda ship u and brooke and at the same time nah she yells too much ToT -.-

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      24. Tbh, I don’t rlly like Brooke.

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      25. i think or her as my little annoying sis shes chill and all
        y dont u like her?
        is she too weird?

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      26. Yes, that’s a word for it I guess. Uh, I hate to say it but. Immature.

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      27. welp… that was rlly offf dude
        i mean shes still little so let her live as a kid still k?

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      28. so how much more essays u gotta post?
        and are u sure that im not bothering u i could ttyl if ya want

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      29. I have to go pretty soon anyways for the party. So. I have three essays to post

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      30. My brothers birthday

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      31. i litteraly just went to the rp chat and was like
        Hi and Bye guys!!
        cause they litterally wont stop bugging -.-
        XD

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      32. LOL, that was so hilarious.

        Like

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