Managing Debt Can Be Tricky
If you find yourself in debt it can cause you to panic. However, of recent, there are a host of financial institutions that offer loans for bad credit. What type of debt is it. Is it credit card debt, is it a mortgage on your house, is it a car loan. Each of these needs to be handled in a different way. For a car loan you pay it off in installments. Mortgages you also pay off in installments the difference is that In this case is that at the end of the term of the loan there is a much larger payment called a “Balloon Payment”.
The difference between Good Credit and Bad Credit is in your ability to pay off the debt. Paying off your credit cards promptly, and paying them in full every month are the two keys to establishing Good Credit. Good Credit raises your Credit Score. Your Credit Score determines how likely it is that a bank or lender is to give you a loan. Bad Credit can keep you from getting a loan or even in some cases a job. There are three Federal Credit Bureaus, there names are Experian, Equinox and Transunion. When checking your Credit Score you want to check all three Bureaus. Because one Bureau’s report might have information the that does not appear in the other two bureaus reports.
There are two types of Mortgages, Fixed Rate and Adjustable Rate the difference being that with an Adjustable Rate Mortgage if at any time during the term of the mortgage inflation rate goes up the bank can decide to increase the interest rate of your mortgage.
Lets say you have two mortgages they both have a starting interest rate of 3.5% but one is a fixed rate mortgage and the other is an adjustable rate mortgage. If the federal reserve raises interest rates the bank is legally only allowed to increase the interest rate on the adjustable rate mortgage.
The difference between a secured loan and unsecured loan is that a secured loan is a loan is a loan for which the person taking out the loan collateral. Is an object or possession that the bank appraises as having the same value as the amount of the loan. the collateral can be anything the bank deems to have monetary value ranging from a diamond ring to your car or even your house if at any time you are unable to pay off the loan the bank can take the object used as collateral in order to recoup their losses