Free Article: Financial
You are here:
Directory | Finance |
How To Become A Smart Borrower: Part 2
By Myles Johnstone
1. Shop around for the best borrowing deal. The most recent issue of money or perhaps your local newspaper are good places to start. You can find lists of the best credit cards, as well as the best deals on mortgages, home-equity loans, and car loans in your area. Be sure to call at least half a dozen lenders before taking out a new loan. Two options you should always check out: credit unions and the bank where you have your savings. On average, credit unions offer loan rates that are one to 2.5 percentage points lower than those available at banks and S&Ls. What's more, they have become increasingly flexible about their membership. Also, ask a loan officer where you keep your checking and savings accounts whether depositors get special breaks on loans. You can sometimes get a quarter-point discount on the interest rate by having your payments deducted automatically from your account each month.
2. Review your credit report before applying for a loan. Credit reporting agencies keep data on your debt payment history and the amount of credit you already have. They then sell this information to lenders, merchants, and other credit issuers, who use it to target you as a potential borrower and to decide whether to grant you more credit.
3. Negotiate rates and fees. Though lenders don't like to admit it, with a little arm twisting many today will cut their credit card interest rates and fees, as well as lower costs on all kinds of loans. You can score potential savings simply by asking for a better deal and, if necessary, threatening to take your business elsewhere. In 1994 a team of 28 money reporters (who didn't identify themselves as such) with MasterCards, Visas, or Discover cards called their card's issuing bank and asked for better terms. Result: Of the 88 banks called (some reporters owned more than one card and called more than one bank), 84 waived their annual fee, lowered their interest rate, or did both.
As an example of the difference that dialing for dollars can make, Signet Bank responded to one reporter's call by ditching the $18 fee on her MasterCard and lowering her 19.8% interest rate to a reasonable 13.9%. You can also save more money by asking lenders for lower interest rates and fees on car loans, home equity loans, and mortgages. Most banks have an official rate for each type of loan they make. But if you are an existing customer or have a good credit rating, it's not difficult to convince the bank to lend to you at a lower rate.
Author Details:
Myles Johnstone writes exclusively for finance related sites such as Refinancing Finance Info.com, Vehicle Finance Info.com and finance Solutions info.com
Source: Financial Articles
NOTE: This article may be reproduced ONLY if this note, the author details, source and ALL links remain in place and active.
Articles About Finance:
3 Drawbacks Of Having A Company Monitor Your Credit
4 Reasons Why Real Estate Is A Good Investment
5 Questions To Ask A Financial Planner
5 Simple Ways To Save More Money
6 Rules To Building Wealth And Satisfaction In Life
A Couple's Guide To Following A Budget
Amazing Opportunities Now And In The Future
Are You Financially Insane
Do You Sacrifice Integrity For Short Term Financial Gains
Does The Lack Of FDIC Insurance Make Money Market Funds A Bad Choice
Effective Ways To Reduce Your Federal Income Taxes - Part 1
Effective Ways To Reduce Your Federal Income Taxes - Part 2
Financial Success Through Personal Hard Work
Getting the Pay You Deserve
How To Become A Smart Borrower - Part 1
How To Become A Smart Borrower - Part 2
How To Invest Wisely
Into Mutual Funds - Be Sure To Diversify
Investing In Your Own Business
Minimizing Taxes On Funds
Planning For Retirement
Preparing For Your Children's College Education
Resisting Temptation To Spend Your Money
Simple Ways To Increase Your Savings - Part 1
Simple Ways To Increase Your Savings - Part 2
The Importance of Saving
Two Keys To A More Successful Career
What Is A Mutual Fund
Which Is Financially Easier - Renting Or Buying
Your 1st Step To Financial Freedom - Putting All Of Your Debts In Writing
A few more small articles about finance matters:
3 Rules That Debt Collection Agencys Must Follow
Credit Monitoring Services
Everybody Can Find Money To Invest
Marshmallows, Resisting Temptation, and a Satisfying Life
Need More Money - Then What Are You Doing About It
The Truth About Medicare - Will It Cover You When You Need It
What Are Dividend Reinvestment Plans
What are savings and money market accounts
What Do You Want From Your Money
What Is Estate Tax
What Is My Bank Account Really For
What To Do If You're Already A Victim Of Financial Fraud
See also: Credit Repair