Borrowing for dummies
Tips on borrowing:
- workout your budget
- DO NOT borrow from loan sharks
- when borrowing make sure you can ensure monthly payments
- think carefully about how much you are borrowing
Myths on borrowing:
- you get a universal credit score
- debts are not important
- living with someone will impact your credit score
- too much credit is fine
- Introductory APR vs. APR
introductory APR is short term and is usually low or 0% interest rate, where APR is taking out a cash advance using a credit card.
2. Truth in Lending Act
this is a federal law that requires to tell you about the costs, terms, and conditions at the time they offer you a loan or credit card.
3. Interest Rate
this is when you are being lent money by the bank and have to pay for borrowing.
Simple Interest & R-T-P
- When you sign for simple interest loan no interest is added in advance.
- you can pay off your entire loan early no penalty or pre-payment
- there are no "late charges" if you are late with payment
- Character: one who has a responsible attitude
- Capacity: ability to repay loans or make payments on merchandise
- Capital: property and other assets that total more than debts are known
- Conditions: factors that might affect a persons ability to desire or meet financial obligations
- Collateral: property or possessions that can be mortgaged or used as security for payment of a debt
-check your credit history and score regularly
-pay bills electronically
-avoid sharing personal finance information
-what out for a "free trial" that considers credit card information
_dont feel obligated to give credit information over the phone