Graylock Advisors| Tips on Finance

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If you are buying a new car, getting a personal loan or even purchasing a home, you are financing it.  Ffinancing is borrowing money with a promise to repay that money and some additional fee, or interest, over a period of time.  

Consumers who finance should be aware of each and every thing in any contract you sign for any type of financing.  Make sure you read it or take it to your attorney to make sure everything is okay.  You may have signed a contract with a horrible interest rate or some type of balloon payment at the end of the contract.  For example, your payments might be $200 a month with a balloon payment of $1000.  Also, your interest rate is determined by your credit score  in any consumer financial loan.  Some companies try and trick you into paying an exorbitant interest rate.

Another thing I would like to talk about with finance is:  Just because a lending agency will finance your purchase does not mean you can afford it.  I had a family member making a HUGE car payment, one he could not afford.  He let the dealership talk him into a loan because his credit score was not in a good range.  If you find yourself  being asked to pay a higher interest rate, then you need to try and save your money to make a bigger down payment or just walk away.
  Try and do things that would raise your credit score, so you can get a lower interest rate.  Make your payments on time and fulfill your obligations. You should at least make the minimum payment and  more, if possible. Your key to a lower interest rate is your CREDIT SCORE!  There are many websites that offer free credit scores and give you tips on how to maintain your credit score or how to increase it.  But, buyer beware, this same companies send you credit card offers.  Again, just because someone offers you a credit card, does not mean you should accept it.

Another thing that affects your ability to obtain financing is you have maxed out all your credit cards.  Lenders do not like to see that.  Ideally, you should pay off your credit cards full amount when you get the bill.  That is:
TO AVOID FINANCE CHARGES.

I also want to touch on 0% loans.  These are given to those that have excellent credit.  But, another thing is  to be aware of any hidden fees associated with these types of loans.  For instance, you finance a car with 0% interest but you are charged an extra $2500 for this type of financing.  Just make sure you read your contract thoroughly before you sign.  

Lastly, we have consumer protection laws that are aimed at helping consumers to NOT get into these type of bait and switch tactics when it comes to financing.  You have rights AND responsibilities when it comes to financing.  Make sure you follow through on your end and make sure you know your rights.


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