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 Iowa, banks and credit unions are regulated entities that offer various types of loans 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 the terms vary widely. Credit cards represent a form of unsecured revolving credit, where the borrower has a limit they can spend and is required to make monthly payments. The Iowa Division of Banking oversees state-chartered banks, while the Iowa Credit Union Division regulates credit unions. Both types of institutions must comply with state statutes as well as applicable federal laws, such as the Truth in Lending Act, which requires clear disclosure of loan terms and costs.