By: Pradeep Saran
Understanding the basics, making informed choices, and achieving your financial goals.
Borrowing money from a lender (bank, credit union, etc.) that you promise to repay with interest over time.
- Personal loans - Auto loans - Student loans - Mortgages - Visual
– Credit score: Three-digit number reflecting your creditworthiness, impacting loan approval and interest rates. – Good credit scores (700+) generally qualify for lower interest rates.
– Shop around: Get quotes from different lenders to compare interest rates, terms, and fees. – APR (Annual Percentage Rate): Consider the true cost of borrowing, including all fees and interest.
– Calculate monthly payments: Use online calculators or loan amortization schedules. – Factor in debt-to-income ratio: Ensure loan payments stay within a manageable portion of your income.
– Borrow only what you need: Avoid unnecessary debt and consider alternative options like saving or using credit cards wisely. – Have a repayment plan: Create a roadmap for paying off your loan on time and in full.
– Beware of predatory lenders: Be cautious of high-interest rates, hidden fees, and unfair terms. – Never provide personal information to unsolicited callers or emails. – Research lenders: Check online reviews and verify licenses before applying.
– National Foundation for Credit Counseling (NFCC): Provides free financial counseling and education. – Consumer Financial Protection Bureau (CFPB): Offers resources on loan terms, comparison tools, and complaint filing.