Credit-Land.com is an independent, advertising-supported web site.
Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site.
Compensation from our advertising partners impacts how and where their products appear on our site,
including, for example, the order in which they may appear within review lists.
Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Posted: September 29, 2011 Updated: December 26, 2012
The content is accurate at the time of publication and is subject to change.
Taking out loans is an all too familiar part of life for the American consumer. It can be a pretty scary experience if you aren’t sure of all the rules and regulations associated with it. You can familiarize yourself with this by reading through the fine print, as always. Because the fine print is always tiny, here are some questions you can ask your lender in size 12 font.
Can I pay my loan early?
Know the ins and outs of your repayment plan. Know how long you have to repay the money and how much interest you will be charged. A creditor might advise that you pay on a 12 month payment plan. When signing up for these plans watch out the APR and monthly rates. Some plans may offer 0 to 5% APR with higher monthly payments or a 60 month payment plan with an APR of 14%. First determine your payment personality to see which of these options a better fit is for you.
The lower interest rates on the shorter term can be enticing, but if you’re a traditional borrower the longer payment plan might suit you because of its lower monthly payments. Either way, make sure that you will not be charged a penalty fee if you choose to pay the loan off ahead of schedule.
How will they calculate interest?
Calculating interest can get kind of tricky. So make sure that if you don’t understand the interest guidelines laid out in front of you, consult your advisor. Lenders sometimes show interest rates as APR rates. So if your interest rate is 12% APR, 1% of your balance would be added to your bill every month. It’s important to discuss the calculation with your lender, because each one does it differently.
One lender might add the interest monthly; some might add the interest daily. If you get a loan that adds interest daily, it can lead you to having a higher principal balance and causing you to pay more money over time. Also, you should know if your loan is an adjustable rate or fixed rate loan. This will determine the limit you are allowed to be charged over time.
Do they report my payments?
If you are looking to rebuild your credit or raise your credit score, this is a very important question to ask. Loans usually don’t have an effect on your credit score unless the three major credit reporting agencies know about it. Talk to your lender to see if they will report your payments to Equifax, TransUnion and Experian so that your credit score can be affected. Most lenders will report the information to the credit reporting bureaus, but they are not required to do so.
Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Days are getting longer, snow is melting and you already feel the lightest breath of warm breeze on your face – spring is here. Summer holidays are looming, and so is Easter with its shopping. You can lift in spirits and let CreditLand… Continue reading
If you’re trying to find the perfect rewards credit card, you might feel like you’re drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often… Continue reading
Paying too much in credit card interest is not fun and you will definitely want to look for a way that will help you avoid paying credit card interest while paying off your debt. A balance transfer is that money-saving option to help you…. Continue reading
You've successfully subscribed!
Please specify the following:All these fields are optional
Your Credit History
Themes you are interested in:
By providing this information you help us make our news letters more useful
and informative. Thank you!