Consolidating private loans government

Interest rates on unsecured loans are nearly always higher than for secured loans because an unsecured lender's options for recourse against the borrower in the event of default are severely limited.

An unsecured lender must sue the borrower, obtain a money judgment for breach of contract, and then pursue execution of the judgment against the borrower's unencumbered assets (that is, the ones not already pledged to secured lenders).

Although this article focuses on monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions such as banks and credit card companies.

Loans can also be subcategorized according to whether the debtor is an individual person (consumer) or a business.

In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates.For more information see Compound interest#Monthly amortized loan or mortgage payments.Predatory lending is one form of abuse in the granting of loans.The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan.In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants.

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