Borrowing money!!

Benefits & warnings of borrowing money ....

What you need to know !!

*Credit - the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.


*Simple interest - is a quick method of calculating the interest charge on a loan.


*Principal -


*Rate -


*Time -is the dead line .


*20 -amount that you should borrow ( includes credit cards but not mortgages ) should be less than 20%the annual net income.


*10 -your monthly payments should be less than 10% of your monthly net income.


*Amortization schedule - An amortization schedule is a table detailing each periodic payment on amortizing loan (typically a mortgage), as generated by amortization calculator.

Advantages & Disadvantages of borrowing ...

Advantages

*Low interest rate financing , which makes bank borrowing a wiser choice than ranking up the balance on a high -rate credit card .


*If you have a monthly loan payment of $200 over a 10 -year payment period , you effectively eliminate $200 of cash flow during that repayment period .


Disadvantages

*Having to pay back the money.


*Ongoing debt is sometimes frustrating and makes for significant budget challenges.

DIFFERENT INTEREST RATES BASED ON WHAT YOU ARE BORROWING ...

Takeaway for consumers

* to maximize profits, through the NIM, for their shareholders.