SMART BORROWING

Loans can help you reach big goals, like buying a home, starting a business, or getting your dream car. But before you rush in, take time to understand the details. Knowing the facts upfront can save you money and stress down the road.

1. What’s your credit score? A higher score can lower your interest rate, saving you money. You can check your score through the Credit Union’s digital banking.
2. How much are you borrowing, and what’s the monthly payment? Understand whether you’re getting a loan with a fixed amount or a line of credit. Be sure the monthly payment fits within your budget.
3. What’s the Annual Percentage Rate (APR) and total interest? The APR shows how much you’ll pay to borrow but ask for the total cost of the loan, including interest and fees. Shop around for the best rate and be mindful of hidden fees.
4. Is the loan secured or unsecured? Secured loans require collateral (like a car), while unsecured loans may come with higher interest rates.
5. What’s the loan term? A shorter term may save you on interest, but it could mean higher monthly payments.
6. Are there prepayment penalties or deferment options? Some loans at other financial institutions charge fees for paying off early, and others allow you to defer payments – but interest may still accrue.
7. What fees are involved? Ask for a breakdown of all fees, including any application or origination costs, and be aware of late payment penalties.
8. Any loan use restrictions? Make sure you know how the loan can be used before signing any agreements.

Understanding your loan terms is key to reaching your goals without financial stress. Take the time to compare options, ask the right questions, and be sure you’re choosing the best loan for your future. The right decision now can set you on the path to achieving your dreams!