Annual Percentage Rate (APR) The amount it costs you a year to use credit, expressed as percentage rate Interest, transaction fees, and service charges.

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Presentation transcript:

Annual Percentage Rate (APR) The amount it costs you a year to use credit, expressed as percentage rate Interest, transaction fees, and service charges

How long loan lasts Longer the loan = greater cost More interest to pay

Interest rate high = loan costs more

Access to cash in an emergency The ability to use it now Safety and convenience Earn bonus points or miles

Buy Now Pay Later No Loan term Longer you wait to pay off balance, more costs in finance charge

APR Annual Fee Grace Period Minimum Payment Credit Limit

Make regular payments, usually monthly Banks & Credit Unions

Lower interest rate than credit cards Penalties for paying loan off early (lose interest)

Federal Government Delay payments until graduate Tax break for education costs

Different than installment loan –Longer period of time –More $ borrowed

Spend not more than 20% of your take home pay to pay loans (excluding mortgage payment) Lenders no more than 33% of your take-home pay go towards your mortgage

Credit History Credit history for past 7 to 10 years

Don’t bounce Checks Additional savings deposits Pay bills on time