Borrowing

Areli Pompa

Many people say that credit can be good or bad, but really, its neither. It is used to buy something now and be payed later.

Simple interest is just a faster way to calculate the actual payment for your loan that includes interest. There are reasons why people borrow money and tips for borrowing. If you are going to borrow something, you should buy it something now also borrow a certain amount of cash to repay it later by a set date. Make sure make regular payments to repay overtime by a set date.

A principal is something important because its in exchange for your promise to repay the money later, its usually with interest.

A simple interest is a quick way to calculate the real payment for your loan that includes interest. There is a formula for it: I=P*R*T

Ex: 5,000 -price 5,000*.05*6/12= 125

5% - rate

6 -time

The 5 C's of credit.

The first c is character, this is credit reputation. The second c is capacity, this is the ability to repay a loan or more payments on merchandise with a present income is known as a capacity. Third one is a capital is property and other assists that total more than debts are known as capital. The fourth one is conditions this all existing debts, stability of employment, personal factors and other factors that might affect a persons ability. The last one is collateral, property or possessions that can be mortgaged or used as security for payment of a debt.

The 20-10 Rule

20: Amount you should borrow includes credit cards but not mortgages. 20% should be your net income.

10: This is your monthly payment should be.

In some cases frauds happen. this is when people get your credit information and can cause identity theft. This very important and need to be careful because it an be dangerous.