Walk With Money » Car Loan http://www.walkwithmoney.com Take A Walk On The Wealthy Side Thu, 10 Feb 2011 16:32:42 +0000 en hourly 1 http://wordpress.org/?v=3.0.3 5 Things You Need to Know About Credit Scores http://www.walkwithmoney.com/5-things-you-need-to-know-about-credit-scores/ http://www.walkwithmoney.com/5-things-you-need-to-know-about-credit-scores/#comments Tue, 19 Oct 2010 05:20:04 +0000 Robert Wilkinson http://www.walkwithmoney.com/5-things-you-need-to-know-about-credit-scores/ Read the whole article...]]>
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Over the past few years, consumers have been increasingly aware of the importance of a credit score. If you plan to borrow money (i.e., car loan or mortgage), your credit score is a major factor that determines your ability to get the loan and the interest rate you are eligible for. With a better credit score, you will be able to enjoy the best rates available. Your credit score could even impact your insurance rates and your ability to get certain jobs. As such, it is a good idea to learn as much as you can about this important number.

1. Your credit score is a number

Your credit score is a number reported by various credit bureaus. There are three major bureaus that you should be know: Experian, TransUnion, and Equifax. These credit reporting agencies use different algorithm to determine your score, and they also have slightly different credit score ranges. In general, your score ranges from 300 to 850, and anything above 700 is considered good.

2. You can get your credit score for free

There are many websites that can provide you with free credit scores and reports. But some are better than others, and if you are not careful, you could end up paying a lot more than you bargained for. To be on the safe side, here are two sites that provide you with absolutely free information. These sites are:

  • Quizzle.com gives you free access to your Experian credit score and report.
     
  • CreditKarma.com gives you free access to your TransUnion credit score and provide a proprietary credit report.

As an aside, if you want to see your credit reports from the three agencies for free, you can check out AnnualCreditReport.com. It is the only government-recommended website for obtaining your credit reports. Through this website, you can get one free credit report from each bureau per year. And here's ...

]]> http://www.walkwithmoney.com/5-things-you-need-to-know-about-credit-scores/feed/ 1 The Dangers of Long Term and Interest Only Loans http://www.walkwithmoney.com/the-dangers-of-long-term-and-interest-only-loans/ http://www.walkwithmoney.com/the-dangers-of-long-term-and-interest-only-loans/#comments Mon, 04 Jan 2010 23:20:22 +0000 Robert Wilkinson http://www.walkwithmoney.com/the-dangers-of-long-term-and-interest-only-loans/ Read the whole article...]]>

5982b interest The Dangers of Long Term and Interest Only LoansThere are two new trends in the banking world that may actually be very dangerous for consumers. Long term personal loans and interest only loans are gaining in popularity, especially in the wake of the housing crisis. While these may seem to be a great option at the time, there are many risks from these loans that should be avoided if at all possible. If you’re considering refinancing your home to an interest only loan, or if you are looking at getting a personal or car loan, it is very important to understand exactly what you are getting into before you agree to any loan.

An interest only home loan means that each month, you only pay the interest that you owe. At face value, this can save a lot of money and it may help you keep your home if you are refinancing. Even though interest rates are going up, when you’re not paying on the principle, your overall monthly payment will be lower. However, the part about not paying on the principle is the kicker.

At the end of your interest only loan you will not own your home. Instead, you will have to pay the principle, in full, in order to get the deed. Now, if you’re planning on selling your home after the loan is paid off, this may not be as dangerous. However, with falling property values and a down market, this can be disastrous. In addition, by only paying interest, you will end up spending a lot more at the end for your home. In most cases, homeowners with this type of loan find that they spend $25k to $50k more for their actual homes.

Another issue with interest only loans is that you will not have the benefit of gaining equity in your home, even though you are making payments every month. If you end up with an emergency on your hands and need to get money quickly, you will not be able to draw on the equity in your home. This is a big problem that many people do not consider. Would you rather have lower monthly payments, or the ability to earn equity in your home with every payment that you make?

Next up, long term loans are becoming very popular as interest rates go up. Most people prefer to keep their payments as low as possible, but right now, that is pretty tough. The solution has been to roll out new long term loans, particularly for cars. As an example, you may be paying only $300 a month for your car, but you will have to keep making those payments for the next seven to eight years. Compare this to the usual time period of three to five years.

That is a lot of extra interest and many people may not even realize just how much extra they are paying. At the end of the loan term, you will have spent thousands more than the car is worth and by then, the vehicle has depreciated to the point where you will never get that money back. Long term loans do make it easier to make payments, but at the end of the day, you’re worse for the wear.

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Originally posted 2008-08-19 05:21:57. Republished by Blog Post Promoter

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