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This means that there may be fewer protections in place to ensure that consumers are treated fairly. This includes personal loans, mortgages, car loans, and business loans.
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Instead, lenders rely on the credit borrower's creditworthiness and income to determine whether to approve the loan and what terms to offer. Those with a high credit score and a strong financial history may be eligible for a lower interest rate, while those with a lower credit score or a less-than-stellar financial history may be charged a higher rate. Revolving credit lines are often used for a variety of purposes, including managing cash flow, covering unexpected expenses, or making large purchases.