Credit & Lending

A:

According to Investopedia, a signature loan is a personal loan that does not require collateral to secure, typically issued by a bank or other financial institution. The loan is issued based on the customer's signature on the loan papers and his word that the loan is to be repaid. Because the loan is unsecured, it is also sometimes called a character loan or good faith loan.

See Full Answer
Filed Under:
  • How can you improve a low credit score?

    Q: How can you improve a low credit score?

    A: Improve a low credit score by analyzing your credit report and disputing any errors, paying off debts, balancing existing cards and keeping up with current payments, states About.com. Avoid applying for new credit cards, cancelling old cards or reaching your credit limit.
    See Full Answer
    Filed Under:
  • What is the difference between debt and equity?

    Q: What is the difference between debt and equity?

    A: Debt is loan financing used to start or grow a business. Equity financing is investment money received in exchange for shares of ownership in the business. The National Federation of Independent Business indicates that debt has to be repaid, while equity does not have to be repaid.
    See Full Answer
    Filed Under:
  • How do you recover money owed?

    Q: How do you recover money owed?

    A: Recovering money owed can involve making a reminder phone call to the debtor or obtaining a court judgment against the debtor; this judgment grants permission to place a lien against property or garnish wages. Other ways to recover money include engaging the services of a collection agency, using a mediator, offering a settlement agreement and sending a registered letter to remind the debtor of the money owed, according to ProfitGuide.com.
    See Full Answer
    Filed Under:
  • How can you raise your credit score fast?

    Q: How can you raise your credit score fast?

    A: According to Forbes, some ways to raise a credit score quickly include raising credit limits, keeping accounts open and paying bills on time. Increasing credit limits and keeping accounts open lower a consumer's balance-to-limit ratio, an important ratio when calculating credit scores, according to Experian. Paying bills on time is important because timely payments directly determine a third of the credit score.
    See Full Answer
    Filed Under:
  • What is a good credit score range?

    Q: What is a good credit score range?

    A: Experian considers a credit score higher than 700 as indicative of good credit management. Typical credit scores range between 600 and 750, but the scale runs from 300 to 850.
    See Full Answer
    Filed Under:
  • What is the difference between credit and debit?

    Q: What is the difference between credit and debit?

    A: The difference between credit and debit, relating to a bank card, is that credit allows a purchase without immediate funds based on the customer's trusted and proven ability to pay, while debit is an actual debt recorded in an account, as defined by Dictionary. In bookkeeping and accounting, a credit is a payment to an account, and a debit is a debt on an account, according to Bookkeeping Basics.
    See Full Answer
    Filed Under:
  • What tools can I use when dealing with home loans?

    Q: What tools can I use when dealing with home loans?

    A: Most of the tools available that aid in estimating, obtaining and managing a home loan are online calculators. These calculators rely on accurate user input of certain variables related to the mortgage, household income and home to be purchased. The tools calculate values that are useful or necessary to know for dealing with home loans. Information is critical for mortgage shoppers, the Federal Trade Commission states.
    See Full Answer
    Filed Under:
  • How do you write a letter for explanation of a bankruptcy?

    Q: How do you write a letter for explanation of a bankruptcy?

    A: The purpose of a letter of explanation of a bankruptcy is to explain to a potential lender the extenuating circumstances for an unfavorable credit history. These can include loss of a job, medical problems, family member deaths and other circumstances that are unlikely to reoccur. A combination of these credible excuses sometimes help reduce the waiting period for obtaining a new mortgage after bankruptcy or foreclosure, according to Innman News.
    See Full Answer
    Filed Under:
  • How long does a creditor have to collect a debt?

    Q: How long does a creditor have to collect a debt?

    A: The average statute of limitations, or the number of years a debtor has to seek payment or sue, is three to six years, according to the Federal Trade Commission. The exact time frame varies by state and the type of debt under collection.
    See Full Answer
    Filed Under:
  • What is the maximum interest rate allowed by law?

    Q: What is the maximum interest rate allowed by law?

    A: In the United States, the maximum interest rates financial institutions can charge are controlled by state law, and they vary from state to state. For example, Delaware sets the limit at 5 percent above the current federal discount rate while some other states have no limits at all.
    See Full Answer
    Filed Under:
  • What is pre-approval?

    Q: What is pre-approval?

    A: Pre-approval means a lender is ready to make a customer a loan or extend some other type of credit based on information the customer provided or that the lender retrieved from a credit reporting agency. Pre-approval is not usually a guaranteed approval; instead, it is an initial creditworthiness evaluation.
    See Full Answer
    Filed Under:
  • How do you check the status of a credit card application?

    Q: How do you check the status of a credit card application?

    A: In some cases, credit card applications completed online result in an instant credit approval. Other times, approval requires manual review by a bank employee. The procedure for determining a credit card application status varies from bank to bank.
    See Full Answer
    Filed Under:
  • What are the advantages of a bank loan?

    Q: What are the advantages of a bank loan?

    A: According to Chron, the major advantages of a bank loan are stability and autonomy if the borrower is a small business. This source explains that banks lend money without taking ownership in the enterprise for which the loan is being used, so the borrower retains total autonomy as long as the money is paid back in time.
    See Full Answer
    Filed Under:
  • What percentage of parents pay for college?

    Q: What percentage of parents pay for college?

    A: The percentage of parents who pay at least a portion of their children's college costs is between 22 and 35 percent. The rate varies depending on the components of cost and payment figured into the calculation.
    See Full Answer
    Filed Under:
  • How should you write a commitment letter?

    Q: How should you write a commitment letter?

    A: A commitment letter is written in a clear, concise and diplomatic tone. All essential information must be reviewed prior to writing. The letter outlines all previously agreed terms between the parties involved.
    See Full Answer
    Filed Under:
  • What is a good credit score from Experian?

    Q: What is a good credit score from Experian?

    A: According to Experian, a good credit score is a score above 700. This suggests to a lender that there is a history of good credit management. Experian states that most credit scores are between 600 to 750.
    See Full Answer
    Filed Under:
  • What are the factors that go into your credit score calculation?

    Q: What are the factors that go into your credit score calculation?

    A: The factors that go into calculating a FICO credit score, the system used by most banks and other businesses that deal in credit, include payment history, amount of debt, length of credit history, types of credit and amount of inquiries. Special circumstances such as bankruptcy or a limited credit history also impact credit scores.
    See Full Answer
    Filed Under:
  • How do you ask for financial help?

    Q: How do you ask for financial help?

    A: Asking friends or family for financial help requires being honest about one's financial situation, including the possibility of and timetable for paying money back. It also involves treating the request as a business transaction, keeping lines of communication open and showing gratitude for any loan or gift received.
    See Full Answer
    Filed Under:
  • How do credit card companies investigate fraud?

    Q: How do credit card companies investigate fraud?

    A: Credit card companies investigate fraud by verifying all information associated with the account, speaking to the business entity where the money was spent and working with law enforcement to find the credit card thief. This process can take a long period of time and may be drawn out for several months depending on the amount of money that was stolen and the circumstances surrounding the account before the credit card was stolen.
    See Full Answer
    Filed Under:
  • What is the best credit score site?

    Q: What is the best credit score site?

    A: The best credit score website should provide its users with an easy way to find out their credit grade scores. As of 2014, any of the following three provide a great service: Equifax, Experian and FreeCreditReport.
    See Full Answer
    Filed Under:
  • What is a credit card CVV number?

    Q: What is a credit card CVV number?

    A: A CVV number on a credit or debit card is a three or four-digit number printed on the back of the card used to verify that the user has physical possession of the card when making purchases, according to CVV Number. These numbers are also called card security codes.
    See Full Answer
    Filed Under: