By: Pradeep Saran
Borrowing money can feel like navigating a confusing maze. Terms like APR, credit score, and collateral can be intimidating, but knowledge is power!
APR is like the price tag of your loan. It represents the total cost of borrowing, including interest and fees, expressed as a yearly percentage.
Your credit score is a numerical snapshot of your borrowing history. It influences the interest rates you receive and your access to credit.
Collateral is an asset you pledge to secure the loan. If you can't repay, the lender may take possession of it.
Use APR to compare loan options. A lower APR often means a better deal, even if the loan amount or term differs.
Paying bills on time, maintaining low credit utilization, and diversifying your credit mix can improve your credit score.
Common collateral includes homes, cars, and investments. Some lenders accept less traditional assets like artwork or jewelry.
Include a brief glossary of additional loan terms like origination fees, closing costs, and amortization.
Armed with this knowledge, you're ready to tackle the loan maze with confidence! Get pre-approved, compare offers, and choose the loan that fits your needs.