What is Credit?
Credit is "extended" to you when someone lends you money or assets, and trusts you to pay it back. It gives you the ability to buy today and pay tomorrow.
There are two types of credit:
* Unsecured: There is no asset or collateral being used to secure the debt. An example of unsecured credit is a credit card.
* Secured: Some type of collateral is used to secure the debt. This can be a house, car or boat that the lender can take back if the loan isn't paid.
Benefits of Credit
* Easier to buy a house
* Easier to finance a car
* In some cases, necessary to get car insurance
* Convenience
* Emergencies
* Safer than carrying cash
* Easier to rent an apartment
* Ability to rent a car
* Allows you to make purchases over the internet
* Some jobs may have a credit check requirement
* Can use it to pay college expenses
* Necessary to build a credit history
Risks of Credit
* Easier to make impulse purchases
* Can accumulate more debt than you can afford
* Misunderstanding of complicated terms and conditions
Wednesday, March 24, 2010
Sunday, March 14, 2010
Know What You Need
Before you implement a contract, know exactly what it is that you need. Shop around to compare the offers - and above all the interest - of building societies, banks, independent financial brokers and dealers own arrangements.
Always compare like with like - if you must add up to € 2000 and intends to repay the loan within three years, each lender to ask the details of the APR (annual) for a loan of this amount, the size of the monthly payment more than 36 months, and the total amount to be repaid.
Remember to check the interest rate is fixed or variable.
Note that some systems can not buy the car, but rent long term!
Determine how much you can afford to pay per Mo. repay a loan adds to your costs, so they try to as soon as possible - to pay less in total interest paid on short-term loans.
Borrow only what you can afford to repay, and always try to buy as much of your own money as possible, pushing the car.
Clued-up on credit
Insert the largest deposit you can afford
Calculate how much you should borrow
Check out terms from different lenders
Compare like with like loan amount and term
Always check the APR (annual percentage rate)
Secured loans are cheaper than unsecured loans
Apply for your credit record if a credit refused
Contact with the borrower, if you can not keep up repayments
Make a payment scheme
Get comprehensive insurance for the car
Always compare like with like - if you must add up to € 2000 and intends to repay the loan within three years, each lender to ask the details of the APR (annual) for a loan of this amount, the size of the monthly payment more than 36 months, and the total amount to be repaid.
Remember to check the interest rate is fixed or variable.
Note that some systems can not buy the car, but rent long term!
Determine how much you can afford to pay per Mo. repay a loan adds to your costs, so they try to as soon as possible - to pay less in total interest paid on short-term loans.
Borrow only what you can afford to repay, and always try to buy as much of your own money as possible, pushing the car.
Clued-up on credit
Insert the largest deposit you can afford
Calculate how much you should borrow
Check out terms from different lenders
Compare like with like loan amount and term
Always check the APR (annual percentage rate)
Secured loans are cheaper than unsecured loans
Apply for your credit record if a credit refused
Contact with the borrower, if you can not keep up repayments
Make a payment scheme
Get comprehensive insurance for the car
Subscribe to:
Posts (Atom)