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Learning When To Borrow
Hello my name is Marquis Rogers and i am your financial advisor
Next is the 5 C's of credit
Now let's cuss and discuss
Advantages and Disadvantages
Introductory APR vs. APR & Fixed Interest vs. Variable Interest Rate
APR is a numeric representation of your interest rate . When deciding between credit cards , APR can help you compare how expensive a transaction will be on each one.
Fixed Interest it's a loan where the interest rate doesn't fluctuate during the fixed rate period of the loan. This allows the borrower to predict their future payments.
Variable Interest Rate it's a interest rate on a loan or security that fluctuates over time. Because it is based on an underlying benchmark interest rate or index that changes periodically.
Principal (of money) is denoting an original sum invested or lent. Ex: The part of a monthly payment that reduces the outstanding balance of a mortgage.
Rate is the interest rate on a type of short term loan that banks give to brokers. The brokers turn in the money to investors to fund margin accounts.
Time is money available at the present time is worth more than the same amount In the future due. This core principal basically holds provided money that earn interest plus any amount of money is worth more the sooner it is received.
The 20-10 Rule basically helps you understand how much you can afford. So you can avoid borrowing more than 20% of your annual net income and not exceed 10% of your monthly net income.
Tips for borrowing and Myths
Make sure to spend time shopping around, working out your budget before you borrow, never borrow money on the spur of the moment, avoid going overdrawn on your bank account without agreement, and most importantly never EVER borrow from Loan Sharks.
- All debt is bad
- Leverage is too risky
- Leveraged investing is only for the rich
- Returns have to equal your interest costs
- Interest costs are always tax deductible
Ex. for Credit Cards and how interest works with monthly payments
For example, if you borrow $100 at 6.8% interest, at the end of the year, the interest you’ll owe on your loan will be $6.80.
In this example, your estimated daily interest is around 2 cents per day ($6.80 divided by 365 days in a year).Credit cards provide you with a revolving loan—or credit limit—based on your agreement to pay at least the minimum amount due on the amount of credit you use by the payment date. A finance charge is applied to the outstanding balance—the amount you do not pay by the due date. For example, if you purchase $200 in one month and you pay the minimum amount due of $15, you will pay a finance charge on the outstanding balance the next month.