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Its a fact of life and one most people will likely face.
Heres what the experts say about borrowing wisely forthose big-ticket items.
Know Your Credit Score First
Before even considering a loan, check your credit score.
A higher score usually above 720 means better interest rates and terms.
If your score needs work, consider waiting a few months to improve it before applying.
Even a 50-point increase could save you thousands in interest.
Calculate the True Cost
Dont just look at monthly payments.
A $20,000 loan at 7% interest over five years will cost significantly more than the purchase price.
Choose the Right bang out of Loan
Different purchases require different loans.
A 7-year loan for a computer that might last 3 years isnt smart financial planning.
Conversely, stretching home improvement loans over 10-15 years might make sense.
Build in a Safety Net
Dont borrow the maximum amount you qualify for.
Leave room in your budget for emergencies and unexpected expenses.
The best loan is one you’re able to comfortably repay even if your income temporarily drops.
Read the Fine Print
This one is important.
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