Frequently Asked Questions

Frequently Asked Loan Questions

You may have arrived at the Dollar Bank  site with an idea of which loan you think you want. But, are you sure that this is the loan that best meets your needs? Click on the topic below to find the answers to your questions.


What kind of loan is best for me?
Determining which loan is the right loan for you is not a difficult decision when reviewing all the facts. To help, we have a few brief questions. The results will show you the best loan to meet your borrowing need. Click here to try it.

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What are the advantages of a secured loan?
Secured loans usually offer lower rates, higher borrowing limits and longer repayment terms than unsecured loans. This loan is frequently used when borrowing larger amounts of money to fund major purchases.

As the term implies, a secured loan means the borrower is providing "security" that the loan will be repaid according to the agreed terms and conditions. In the event the borrower is unable to repay a secured loan, the lender may be able to sell the collateral to pay off all or part of the loan.

Types of Secured Loans include Home Equity Loans, Home Equity Lines of Credit, Auto Loans (new and used), Boat Loans, Recreational Vehicle Loans and Home Improvement Loans.

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What are the advantages of a home equity loan?
A home equity loan is secured by the borrower's house and may result in a larger loan amount, a lower interest rate and a lower monthly payment with an extended repayment term. A home equity loan is versatile in that it can be used for virtually any borrowing need from home improvements to debt consolidation to paying for a wedding and it is usually tax deductible.*

*Consult your tax advisor regarding the deductibility of interest.

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What is the difference between a line of credit and a term loan?
Line of Credit
A line of credit offers flexibility to the borrower. It is an authorization to borrow up to a specific dollar amount. The customer can borrow as much or as little of the line of credit as needed, whenever it is needed. A line of credit is also valuable because it can act as a safety net to get through an occasional tight period.

The line of credit monthly repayment amount will increase or decrease based on the current balance of the line. Interest is only paid on the borrowed amount. It's wise to consider spending and credit habits before taking out a line of credit. With a history of fiscal responsibility and prudent borrowing, a line of credit gives greater freedom in managing finances.

Term Loan
A term loan might be better than a line of credit for a one-time borrowing need. It offers a fixed monthly payment that can be lower when extended over a longer repayment period. For a new or used car, home improvements or a special event such as a wedding, a term loan provides the money needed and an affordable payment schedule.

Borrowing is completed when a check for the entire loan amount is given to the borrower, providing all of the money at one time. Repayment of the loan is made in monthly payments and contiues until the balance is paid off. The monthly payment amount remains the same throughout the term for easy budgeting.

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What are the different types of loans available?
Secured vs. Unsecured
Secured loans usually offer lower rates, higher borrowing limits and longer repayment terms than unsecured loans. As the term appllies, a secured loan means the borrower is providing "security" that the loan will be repaid according to the agreed terms and conditions. It's important to remembeer that in the event a secured loan is not repaid, the lender has direct recourse to the collateral and may be able to sell it to pay off all or part of the loan. Examples of secured loans include Home Equity Loans, Home Equity Lines of Credit, Auto Loans (New and Used), Boat Loans, Recreational vehicle Loans and Home Improvement Loans.

When applying for a loan that is unsecured, the lender does not take a lien on property or collateral, like a home or car as security in case the borrower becomes unable to repay the loan. The lender believes that the loan will be repaid based on the borrower's creditworthiness and financial resources. Unsecured loans are usually offered at a higher rates than secured loans and have lower borrowing amounts. Examples include Personal Loans, Personal Lines of Credit, Student Loans, and some Home Improvement Loans.

Fixed vs. Variable
On a fixed rate loan the interest arte remains the same throughout the term of the loan and the principal balance is steadily reduced as payments are made. With the security of knowing from day one what the monthly principal and interest payment will be, it is easy to budget and plan for the future.

When a loan (including a variable rate line of credit and adjustable rate home equity loans) has a variable rate, the rate changes periodically to reflect market conditions. Variable rates are generally initially lower than those on fixed rate loans, but can change monthly. The rate on a variable loan can go up or down depending upon the index the loan rate is tied to. There is a built-in ceiling on how high a variable rate can rise so that it never exceeds a specific rate.

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What is a personal loan?
A personal loan (including a personal line of credit) can be a secured or unsecured loan. Secured personal loans usually offer lower rates, higher borrowing limits and longer repayment terms than unsecured personal loans. As the term implies, a secured loan means the borrower is providing "security" that the loan will be repaid according to the agreed terms and conditions. In the event the borrower is unable to repay a secured loan, the lender may be able to sell the collateral to pay off all or part of the loan.

A personal loan has a fixed rate and a fixed monthly payment for the term of the loan providing easy budgeting and protection against rate fluctuations. Personal loans are often used for items ranging from a new computer purchase, to bill consolidation, to funding a vacation.

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What are the minimum requirements for a loan?
Most lenders will grant a borrower a loan as long as the borrower is 18 years of age or older with a continual source of income. Some exceptions may be based on individual situations and the availability of a co-signer for the loan. As with all loans, the borrower's credit history, current debt burden and length of employment all imply a lender's willingness to appprove a loan request. Dollar Bank's lending standards comply with the equal Opportunity Act and the Fair Housing Act.

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Where can I find information on student loans?
A Signature Student LoanSM may meet a student's borrowing needs when Federal funding isn't enough to pay for college. Dollar Bank is one of the few lenders nationwide offering this program. With a Signature Student Loan, the full cost of education with a maximum amount of $100,000 may be borrowed. Funding is available to graduates and undergraduates. A Dollar Bank Signature Loan is available to students as well as Stafford Loans from other financial institutions.

Signature Student Loan is a secure mark of Sallie Mae.

Click here for details

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Will home improvements add value to my house?
Home Improvements not only make a house a more enjoyable place to live; they can also increase its resale value. The true test of how much value they add occurs when the house is put up for sale.

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How large of a home equity loan can I get?
Determining the amount of equity in a home helps in determining how much money can be borrowed. Try using the same formula lenders use to determine your home equity. Equity is the difference between the fair market value of the property and the amount owed on loans and liens.
Interest rates for home equity loans are based upon the loan to value ratio for the applicant's home with 80% having the lowest loan interest rate and 90% being higher. The loan to value also determines the maximum loan amount for a selected loan to value tier (80%, 90%). To determine the available equity in each loan to value tier, multiply the value of the home by 80% or 90%, and then subtract the amount of any loans or other liens. This will determine the amount of a loan available for the specific loan to value. Click the icon to the left to calculate.

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What is equity?
Equity is the difference between the fair market value of the property and the amount owed on loans and liens. Interest rates for home equity loans are based upon the loan to value ratio for the applicant's home with 80% having the lowest loan interest rate and 90% being higher. The loan to value also determines the maximum loan amount for a selected loan to value tier (80%, 90%). To determine the available equity in each loan to value tier, multiply the value of the home by 80% or 90%, and then subtract the amount of any loans or other liens. For Example, if a house is valued at $100,000 and the loan balance is $50,000, there is $30,000 available to borrow in the house at the 80% loan to value tier.

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How much can I borrow?
Determining equity is not a difficult task when using the right information and tools. To help determine this amount we have created this home equity calculator to help. The formula this calculator uses multiplies the appraised value of a home by 80%, 90% or 100% of the loan to value of the home and subtracts the amount of any
loans and liens. There are two things borrowers with a second loan should consider when evaluating their equity. First, they will need to consolidate their second loan with their new loan. Second, when calculating equity be sure to include the remaining amount of any loans and liens. Click the icon to the left to calculate.

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How do I put the equity in my house to work for me?
If you own a home or have a loan, you can put what you already own to work for you with a home equity loan. This secured loan gives the borrower an opportunity to use their home as collateral. Secured loans usually offer lower rates, higher borrowing limits and longer repayment terms than unsecured loans and, with a home equity loan, there may be a tax deduction.*

As the term implies, a secured loan means the borrower is providing "security" that the loan will be repaid according to the agreed upon terms and conditions. In the event the borrower is unable to repay a secured loan, the lender may be able to sell the collateral to pay off all or part of the loan.

*Consult your tax advisor regarding the deductibility of interest.

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Can I get a home equity loan on my condominium or co-op?
Dollar Bank offers home equity loans to borrowers owning condominiums, however this does not include co-ops.

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How long does it take to get a home equity loan?
The time frame to apply and be approved varies by lender. In most cases, Dollar Bank will provide a conditional approval in 24 hours based on credit report and the accuracy of the information provided. In three business days, we will have the loan documents ready to be signed. Every lender is then required by federal law to provide three additional days in the event that a borrower wants to change their mind about the loan before any of the loan proceeds are disbursed.

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If you have a question that is not addressed here, or if you would like additional information, please contact us at 1-888-418-BANK or loans@dollarbank.com.

  1. How do I get the lowest rate?
  2. How do I get the lowest payment?
  3. How does the term affect my monthly payment?

How do I get the lowest rate?
Generally loans with shorter terms have lower interest rates, but they also have higher monthly payments because the loan is being paid back over a shorter period of time. A benefit of a shorter term is paying less interest over the life of the loan.

Variable rates are generally lower initially than those on fixed rate loans, but can change monthly. When a loan has a variable rate, the rate changes periodically to reflect market conditions. The rate on a variable loan can go up or down depending upon the index the loan rate is tied to. There is a built-in ceiling on how high a variable rate interest rate can rise so that it never exceeds a specific rate. The highest rate that can be reached varies by loan.

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How do I get the lowest payment?
A monthly loan payment reflects the interest and principle of the loan spread out over the loan term. When selecting a longer term loan, the monthly payment is reduced. However, more interest will be paid over the life of the loan.

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How does the term affect my monthly payment?
Generally loans with shorter terms have lower interest rates, but they also have higher monthly payments because the loan is being paid back over a shorter period of time. A benefit of a shorter term is paying less interest over the life of the loan.

A monthly loan payment reflects the interest and principle of a loan spread out over the loan term. When a longer term loan is selected, the monthly payment is reduced, however, more interest will be paid over the life of the loan.

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What are debt ratios?

Calculator A debt ratio, or debt to income ratio, is defined as the percent of gross monthly income used to pay outstanding monthly debt payments. This ratio is an important factor considered when determining the loan amount that can be repaid. To calculate debt ratio, gross monthly income is needed. This includes the total income from all applicants
18 years or older, plus any additional verifiable income such as regular dividend payments. Next, all monthly debt payments are added together. This includes rent or loan payments, outstanding installment loan and line of credit payments, as well as credit card bills. Click the calculator icon to the left to calculate.

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How can I get out of debt?
When bill payments pile up and it seems there's too little left over for day-to-day expenses, it's easy to get overwhelmed. There is a way to reduce your monthly expenses and the cost of higher interest loans using a bill consolidation.

Consolidating multiple bills into one loan could create a substantially lower monthly payment. Depending upon individual financial situations, this could result in significant reduction of hundreds of dollars in interest payment expenses.

However, one result of bill consolidation may be an extended repayment period on certain debts. Therefore it is important to think about your priority - paying off bills quickly or reducing monthly payments.

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Can I still get a loan if my credit is bad or questionable?
There are several items reviewed when lenders evaluate a borrower for a loan and each lender has different requirements. At Dollar Bank, we seldom turn down an applicant based on one credit issue, unless the issue is significant. Credit history is a very important piece of our review, but many other items are considered.

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What role does a credit report play in a bank's loan decision?
After receiving a completed loan application, a credit report is pulled for each applicant. The credit report shows the number of outstanding debts and payment history. Both of these factors are reviewed against lending standards and are used to determine creditworthiness.

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What protections for my privacy are used when credit bureaus collect and distribute my information?
The three major nationwide credit bureaus - Experian, Trans Union and Equifax - each maintain about 170 million credit files on individuals based on two billion items of information. Privacy is protected in two ways. First, the only personal information collected is what is needed for identification purposes. This may include name, current and previous addresses, Social Security Number, year of birth, employer and spouse's first name and middle initial if married. Information regarding race, religion, gender, personal assets, medical history, personal background, lifestyle or criminal record is not collected.

Second, there is limited access to credit reports. It is available only to individuals and organizations that have a legitimate business need for it, usually for credit granting, insurance underwriting and employment purposes. (Year of birth is suppressed in reports going out for employment purposes.) It is against the law for any person or business to obtain a credit report under false pretenses.

If you've been denied for a loan, the denial will not appear on your credit report, only the institution making the inquiry will appear. The credit bureau may identify for you any business that has obtained your credit history. It is your right to know who has seen your credit report.

A copy of your credit report can be requested at any time, but a small fee may be charged. The three major nationwide credit bureaus are Experian at 1-888-397-3742, Equifax at 1-800-685-1111 and Trans Union 1-800-916-8800.

Click here to view Dollar Bank's Privacy Policy.

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What kind of information do credit bureaus collect, and how long does it remain on my report?
Credit bureaus gather information supplied by an individual's creditors. This includes how much credit is available, whether there have been any late payments greater than 30 days, and whether any accounts have been referred to a collection agency. A credit report may also contain information that's part of the public record, including bankruptcies, foreclosures, liens and judgements against individuals. Bankruptcies remain on a credit report for up to ten years.

It is a good idea to review your credit report occasionally to verify that the information included is accurate and timely. A copy of your credit report can be requested at any time, but a small fee may be charged. The three major nationwide credit bureaus are Experian at 1-888-397-3742, Equifax at 1-800-685-1111, and Trans Union at 1-800-916-8800.

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Why couldn't the credit bureau tell me why my loan was refused?
Credit bureaus do not make credit granting decisions, they only provide a report of credit history. All lenders are required to mail a denial letter to the applicant within 30 days from the date the lender receives a completed application detailing the reason for the denial.

Many creditors rely heavily on credit history when deciding whether to grant credit, but most consider a number of other factors as well. If denied credit based on a credit report, the applicant is entitled to receive a copy of that report, free of charge. However, the request must be made within a certain time frame. Federal law requires the credit bureau that prepared the report to send a free copy if requested within 60 days after the credit applicant was rejected.

A copy of your credit report can be requested at any time, but a small fee may be charged. The three major nationwide credit bureaus are Experian at 1-888-397-3742, Equifax at 1-800-685-1111, and Trans Union at 1-800-916-8800.

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What are the benefits of debt consolidation?
Debt consolidation can help reduce the amount of money paid to creditors every month and provide increased cash flow.

Consolidating multiple bills into one loan could create a substantially lower monthly payment. Depending upon individual financial situations, this could result in a significant reduction of hundreds of dollars in interest payment expenses.

However, one result of bill consolidation may be an extended repayment period on certain debts. Therefore it is important to think about what is more important - paying off bills quickly or reducing monthly payments.

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Can I get an unsecured loan even if I don't have a credit history?
Dollar Bank does not offer unsecured loans to borrowers without a credit history unless a qualified co-signer is also on the loan.

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What is credit insurance and why do I need it?
Credit insurance is available, but not required for borrowers with loans and lines of credit. The remaining balance of a loan or line of credit up to the credit limit will be paid off using credit insurance in the event the borrower dies while insured. Some restrictions may apply.

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