Sunday, April 23, 2006

New: Interest-only Loans

That's right, you can now use LoanBuilder to create interest-only loans! Since we launched, we've had several folks write in to us asking for this option and it's not that surprising given the growing popularity of interest-only loans in the mortgage world.

Here's how to create an interest-only loan:

1) Get started using our LoanBuilder and click the "Build my loan" button.
2) On the Loan Calculator, select "Interest only" in the Payment Type field. (see above image)
3) That's it!

When the Interest only option is selected, the borrower will make interest-only installment payments and one balloon payment for the outstanding principle on the loan at the end of the term.

We are also considering the following types of loans:

*Variable rate (e.g., you could set the interest rate to be Prime Rate or peg to other index)

*Adjustable rate (e.g., you could set a flat rate for the first few years and then let the rate adjust to an index. Think ARMs in the mortgage world.)

*Demand payment (e.g., you keep the loan repayment date open so the lender can "demand" repayment at any point. Note: we already offer this type of loan as a blank form.)

If you'd like to see us build any of the above features, or anything else, please let us know.


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