Keys To Borrowing

By Weston Edmondson

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Credit

A tool to buy something now and pay for it later.

Simple Interest

A quick way to calculate to real payment for your loan that includes interests.

(P*R*T)

Ex. Principal is $5000. Rate of 3%. Over a period of 180 days.

$5,073.97-Multiply 5000*.03 then multiply 180/365

Tips:

-If you use credit make sure you can pay it back later!

-Highly recommended to use debit while buying different products!

-Use cash and not a credit card as much as possible!

-Make sure to use a spending log on the things you need!

-Put at least 10% of each paycheck in your savings account for emergencies only!

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Amorization Schedule

A schedule that shows you the amount of interest you pay each each month and principal.
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Principal

In exchange for your promise to repay the money later, usually with interest.

Time

Given amount of time to pay back a loan.

Rate

A rate is a fixed price for something.

The 5 C's of Credit

Character-Credit Reputation

Capacity- Can I pay back?

Capital-Something you owe

Conditions-Other existing debts

Collateral- Property or possessions mortgaged

20-10 Rule

In Credit, this means do not borrow more than 20% of your annual income on credit, and do not spend 10% of your income on credit.

FRAUD

Things to look for if you are a victim of fraud is unusual activity in your banking account. Also, look out for unusual people that sale stuff on the streets they could be suspects of fraud!

Borrowing Pros and Cons

Advantages of borrowing is getting a feel of what the real world has in front of you.

Borrowing unfortunately has more disadvantages. Not being able to pay on time, credit score goes down, more debt.

Its better to stay away from credit cards and borrowing, especially if you aren't able to pay it back.

Introductory APR V. APR

Introductory APR is usually more expensive since you are being introduced to your new line of credit management. APR is the set amount of money you have to pay off to someone or something.