Interest rates on loans vary, depending on the credit issuer. It is always best to be informed of these things before you accept any offer. There should not be any gray area left in terms of credit conditions and arrangements. Don’t hesitate to ask questions as your financial health is on the line.

Be aware of the annual percentage rate (APR). A typical monthly interest rate of 1.5% is reasonable but do not stop yourself from conducting research and comparison among lenders. There may be lenders that offer introductory “teaser” rates but although these rates are initially low compared with others, they are only effective for a limited time and will soon be increased at much higher rates.

When you are shopping for a house, car or even a credit card, always be on the look out for the best APR possible. For credit cards, some other factors come into play, and these are the duration of grace period, late payment charges, other fees and penalties, as well as possible interest rate increases that have little or no warning.

For home loans, it is best if you can get your lender to guarantee you the best possible rate. Rates may rise or dip so avoid being locked into a relatively high rate if you can, especially when rates are going down.

Before buying a home, know how many points are involved in the transaction. One point represents one percent of the loan’s face value.
Always clarify terms with your potential lenders. Again, ask questions. Is the fixed rate effective for the entire length of the loan? Is it actually a fixed rate or just part of the loan period? Is there a relatively low interest rate period followed by a balloon payment?

If you can, study tax laws to know if interest can be deducted. There are loans such as home equity loans that require interest-only payments. Note that these payments do not reduce the principal and they are only advisable when you are trying to ward off foreclosure or bankruptcy.

For more great credit tips and news tune in to The Graceful Credit Show live every Sunday at 3:00pm EST on WCHB News Talk AM 1200.

GCS Credit Advisors are experts in Personal Credit Restoration, Business Credit Building, and Credit & Debt Counseling. GCS is committed to helping people obtain the credit needed to reach their financial goals through trusted methods that guarantee results.

In order for us to get a jump start in helping you reach your goals and better help service you visit, click on Quick Quote, and schedule your free consultation today.

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