Types of Loans — Practice Questions

Types of LoansCredit and Borrowing — Mortgages, auto, student, and personal loans, and how they differ.Not all loans are the same. The type, term, and whether it is secured all shape what you pay.

Mortgage: a long term loan to buy property, secured by the home.

Auto loan: secured by the vehicle, which can be repossessed.

Student loan: funds education, often with flexible repayment.

Personal loan: general purpose, usually unsecured, repaid in installments.

Amortization: Paying off a loan through regular payments split between interest and principal, with early payments going mostly to interest.A larger down payment means borrowing less, often a lower rate, and on a mortgage it can avoid private mortgage insurance (PMI).11 practice questions with explanations. Free, and no account is needed to start.