Banks and credit unions are two of the most common sources of consumer and business loans. These loans may be secured or unsecured, and may take the form of home mortgages, home equity loans, installment loans (loans repaid in monthly installments), auto loans, student loans, and credit cards.
In Arkansas, banks and credit unions are regulated entities that provide various loan products to consumers and businesses. These loans can be either secured, with collateral such as property or a vehicle, or unsecured, without collateral. Home mortgages and home equity loans are secured by the borrower's property. Installment loans are repaid over time with a set number of scheduled payments and can be secured or unsecured. Auto loans are typically secured by the vehicle being purchased. Student loans can be federal or private, and repayment terms vary based on the loan type. Credit cards represent a form of unsecured revolving credit, where the borrower has a credit limit and can make purchases up to that limit. Arkansas state statutes and federal laws, including the Truth in Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA), provide regulations on interest rates, disclosure requirements, and fair lending practices to protect consumers in the lending process.