What is a Retail Loan?
A retail loan in Phoenix, Arizona is a mortgage to get a stand-alone retail shop or a strip mall. Private lenders and banks supply funding to buy these locations. Individuals also borrow to meet personal needs. This is because they can borrow smaller amounts compared to corporate loans.
The lenders consider the applicant’s credit scores before deciding the interest rates. This means the higher the credit ratings the lower the interest. The cumulative effect of low credit scores is that repayments are high. People who are interested in applying for a loan should have a clean credit history for a minimum of 3 years.
Retail loans cover credit cards dues, medical expenses, etc. They are also used as consumer loans; covering the costs of TV, refrigerator, computers, agricultural needs, etc. Deposits and shares serve as collateral for these loans.
These financial tools help the self-employed or salaried. As these comprise the middle and higher income segments of the populace. These loans comprise of 70% of the US economy thus make a large chunk of it. Besides creating 65% of new jobs it also makes people spend their future money now. This offers greater liquidity to the economy.
Period
The terms may differ for various kinds of loans.
- For a personal loan, the annual percentage rate (APR) may be 7 – 18% for up to 36 months, 14 – 18% for 37 to 60 months and 14.5 – 18% for 61 to 180 months. The loan amounts between $30000 – 50000.
- Shares secured loans can be pledged for self and others. As the loan is paid off more shares become available to you and they earn dividends. The APR consists of the share’s rate + 2.00% for 60 months. This may increase to share’s rate + 3.00% for a period of 61 to 180 months
- Certificate pledged loans come with an APR of the certificate rate + 2% for 60 months. The loan amount cannot exceed the amount on the certificate.
Types
Retail loans finance:
- Housing for the borrower to buy an apartment or build a new house on a pre-owned plot of land.
- Education for students at the universities abroad, covering the tuition fees, hostel expenses, etc
- Automobiles for individuals to buy their car, two wheelers, three wheelers, van or truck. These may be for personal or business purposes.
- Personal Needs to pay for travel aboard, marriages and hospital finances.
How to qualify for these loans?
The application should cover the following parameters;
- Credit scores should be 680 or higher.
- The property history if the estate already exists. The lenders consider the history of the current tenants their businesses and the sales history of the property. This information helps check if the real estate will be able to repay the borrowed amount.
- 10% down payment – Check the net worth of the property and prepare 10% of the amount as down payment; as no lender gives 100%.
The appearance of the property, its age, and locality also determine the loan amount and rate of interest. The older the site the more repairs and upgrades will it need. The other deciding factors may be the vicinity and accessibility of the property.