Borrowing Large Sums of Money Advice
Borrowing money has consequences, especially if you are looking to borrow large sums of money. The credit market is tight these days and banks are wary about lending. However, if you need to borrow money, here are some things you should know.
Pay Attention to Interest Rates
Say you took out a 30000 dollar loan for a big ticket item. You have to be wary of the interest rate and repayment terms. If you bought a car with that money, the average payment is going to be around 600 dollars for 5 years.
A dealership might tell you that you can get a lower payment if you stretch it out to 6 years, but remember that the interest will also increase. Never go by monthly payments regardless of what loan you take out.
Finding Loan Cosigners
If you have less than perfect credit you can always get a loan cosigner. If you are the cosigner, be aware that you are responsible for the payment if the primary loan signer does not pay. This can affect your credit and will put you in the same boat as if you had actually signed the loan. Most student loans will require a cosigner.
What can you do about credit card debt? If you have $10000 in credit card debt, it can be tough to pay off. The best thing to do is to transfer that debt onto the lowest interest card you can find. Go to credit counseling if you need help with your debts. Make regular payments to keep your credit score up and to keep debt collectors from calling.
Be careful when you have to borrow large sums of money. Loans are meant to be repaid and are not free money. Only borrow what you can afford to repay and think strongly before cosigning a loan. Money management is important, so be smart with your finances.
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