If you plan on borrowing money in the near future, you should be prepared for how it may impact your life. While having the funds to go to school, buy a house or make some other large purchase may help you today, that money will need to be paid back eventually. Let’s take a look at what it means to accept a loan and the consequences of doing so.
What Types of Loans Are Available?
A loan is either considered secured or unsecured. If a loan is secured, it means that the borrower used collateral as a means of lowering the lender’s risk of not being repaid. Common forms of collateral include the title to a home or the title to a vehicle. Shares of stock or a stake in a borrower’s business may also be used to secure a loan. Unsecured loans include credit cards or medical bills, and lenders have nothing more than a borrower’s promise to repay a loan to depend on.
What Happens If You Don’t Repay the Loan?
The types of consequences that a person may face for not repaying a loan depend on whether it is secured or unsecured. If a loan is secured by collateral, the borrower may run the risk of having it taken away. For instance, failure to pay back title loans in Pembroke Pines may result in the vehicle being taken away.
If the loan is unsecured, a borrower could face a lawsuit or constant phone calls asking for repayment. … Read More