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Tips on Borrowing
When it comes to borrowing, It is important to examine your financial situation beforehand. Compare your income with your regular expenses, and make sure you can repay the debt without causing yourself any hardship. Also, try to anticipate additional expenses that may come up over the next few months/years and include these in your calculations.
Ten questions you can ask your bank:
What types of credit are available: fixed payment, interest only, etc?
What kind of collateral, if any, is required to secure the loan?
What is the interest rate?
Does the rate fluctuate?
How can I increase or decrease, later on, the amount I have to pay each month?
Can I determine the amortization of the loan to suit my cash flow?
How long will it take to get my application approved?
If my credit rating is unsatisfactory, what can I do to improve it?
Is there insurance available on the product?
Will the information I give you be kept confidential?
Remember, the faster you can pay the loan back, the less overall interest you pay.
The following features will help reduce the overall interest costs:
· Shorter amortizations,
· Lower interest rates,
· Higher monthly payment amounts,
· Accelerated weekly or biweekly payments in lieu of monthly payments
· Lump sum prepayments
The unexpected can happen to anyone after borrowing, ie. an accident, illness or a job loss. If it happens to you and you are worried about how to manage your payments, call the financial institution that granted the loan and tell them about it. While you may find this difficult, the loan officer or branch manager can help you work out a plan that will get you through the difficult period. You may also wish to consider optional life or disability insurance, which are available on most forms of credit.
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Mortgage best buys and tools |
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| More from Your Mortgage |
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| When
it comes to household insurance, there are two kinds of
policy.
* Buildings insurance covers the structure of the home
itself, as well as the fixtures and fittings
* Contents insurance covers the contents you would take
if you moved.
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