Shopping For A First Credit Card

Long before we are old enough to carry credit cards ourselves, advertisers make sure we know about the power of plastic: “It’s everywhere you want to be.” “It pays to Discover.” “What’s in your wallet?”

While using an ad campaign to choose a card is a terrible idea, the slogans have one thing right: A credit card can be a powerful thing. For teens and 20-somethings looking to pick a first card, taking the time to choose carefully can save money and offer a boost in establishing and building a credit history.

An excellent credit score will be helpful when you start to think about buying a car or getting a mortgage. Even if you do not plan to take out a large loan in the near future, your credit information can be a factor in renting an apartment, obtaining a membership at a club or getting hired for certain jobs.

Lenders use credit reports to determine how risky it is to give a borrower – that is, you – a loan. All in all, the lender just wants to know if the borrower will be able to pay back the loan. If the borrower has bad credit, then he or she probably made some major or ongoing financial mistakes and is more likely not to repay. On the other hand, if the borrower has good credit, then he or she has a history of paying back debt, and the lender will most likely grant the loan.

Credit cards are effectively short-term loans that need to be paid back within a short grace period. Getting the first credit card can be tricky. Credit card companies do not have any basis for your credit history since you have not borrowed any money in the past. So how are you supposed to establish and build your credit rating without a history?

One way is to apply for a secured credit card. Secured credit cards are backed by a deposit that you make upfront. Usually, the amount you deposit will be the same as the card’s credit limit. Everything else is like a regular unsecured credit card: You use the card to buy things; you make monthly payments; and you incur interest if you fail to pay off the full balance. A secured credit card should be only a temporary step to building credit. Try to pay off the total balance every month to show that you are financially responsible. After all, not only do you want to build a credit history, you want to build a good one.

Another effective way to start your credit history is to become an authorized user on someone else’s card. Many parents will designate their children as authorized users on their credit cards so that the children can build credit without the legal obligation to pay the balance every month. However, if the person whose account you are authorized to use does not handle the account properly, their mistakes could end up hurting rather than helping your credit.

Once you establish your credit history, you can shop for your first unsecured credit card. You will quickly discover that there are many to choose from. A number of factors can help narrow the search.

The most important of these is how you intend to use the card. Are you going to use it only for emergencies? If not, will you pay in full each month, or will you carry a balance on the card? Once you decide how you will use the card, follow your self-imposed rules. It is very easy, and dangerous, to continually swipe the card and tell yourself it is for a good reason. But it is crucial to be stubborn about establishing good spending habits, even – or maybe especially – early in life.

If you plan to carry a balance on your card, you must be aware of the interest rate of each card you are considering. The interest rate used by credit card companies is the annual percentage rate, or APR. There are cards with variable APRs, which are based on a certain index (such as the U.S. prime rate). There are also nonvariable APRs, which are usually fixed-rate credit cards. As a beginner, you will usually want a low-rate, nonvariable APR credit card, because knowing your interest rate will give you a sense of how much money you will need each month to pay at least the minimum amount due. A low-rate, nonvariable APR card will therefore help when you create a monthly budget.

In addition to interest rates, pay attention to penalties and fees. Reading the fine print in a contract can save you from owing avoidable charges. The most common fees include balance transfer fees, cash advance fees, fees for requesting a credit limit increase and online or mobile payment fees. Many cards also impose penalties for not paying your bill on time or going over your credit limit. You should hold out for a card with minimal fees and reasonable penalties. Even if other features of a particular card seem attractive, avoid the potential for exorbitant fees and penalties that could hurt your cash flow and your credit history.

Understanding your spending habits will help you determine which incentives will be important to you. Most cards offer rewards programs to their customers or offer cash back for certain purchases. Many cards offer 0 percent APR for the first six to 18 months that your credit card is open. These cards are great if you plan to carry a balance from month to month. Some cards even offer anywhere from 1 to 5 percent cash back on all or certain types of purchases. If you know how you plan to use your card, then certain cards’ rewards programs can save you a lot of money.

As a first-time cardholder, once you have chosen the card that is right for you, you may find it exciting to be able to swipe the piece of plastic and not have to pay in cash. But while credit cards can be useful tools, it is important to not fall into the black hole of credit card debt, which can be all too easy for an inexperienced user. Make sure to know how your credit score works and how to avoid penalties so that you will be able to make larger purchases and secure loans in the future.

Your payment history, the amount of credit you use and the number of negative marks on your credit history have the highest impact on your overall credit score. If you can, pay off your total balance on time each month, ensuring that you have a 100 percent payment history. Paying off your card every month comes with the added bonus of saving you from being charged any interest on a carried balance.

You will also want to use as low a percentage of your credit limit as you can. This ratio is called credit card utilization, and most experts recommend that you try not to go over 30 percent at any time. Credit card companies want to know that you are responsible with your spending and that you will be able to pay off your balance each month. You can either spend less each month or increase the credit limit on your card to lower the percentage used. You can also pay more than once per month.

Obviously, you should avoid any negative marks on your credit history. These can include collection accounts, bankruptcies, foreclosures, civil judgments or tax liens. Although someone applying for a first credit card typically will not have had time to worry about bankruptcies or foreclosures, keep in mind that such problems can severely damage your ability to secure credit in the future.

As a first-time applicant, you may find that the length of your credit history, the total number of accounts open or closed in your name and the number of credit inquiries also have an adverse rating on your credit score. Your credit history will be short. You will not have many open or closed accounts. Your first credit inquiry will most likely be from the company where you applied for your first credit card. Be patient. Building a credit history takes time, but as a young adult, staying on top of your finances, and especially your credit cards, will help you in the long run.

Credit cards can be both powerful and dangerous, but they are also a convenient part of everyday life for most of us. A first credit card offers a great opportunity to establish positive financial habits that will serve you well for a lifetime.

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How Do I Get My First Credit Card?

In the economic environment of today, although you may not need to use it, having good credit is vital to survival. It positions you as a fiscally responsible person and can help ensure that:

You get better rates on your mortgage;
You get better rates on your car loan;
Your security deposit, if your utility company requires it at all, is as low as possible;
Your potential landlord favors you over someone with a bad credit rating; and
Your potential boss favours you over a candidate with a bad credit rating.
That being said, you should always keep in mind that the ability to obtain credit is a privilege not to be abused. It takes a long time to build up a good credit record but your reputation can be destroyed in a very short time. Do not borrow money that you cannot afford to repay.

How do you get your first credit card?

There is a slow way to get your first card fast. (And get a good credit rating)

And there is a quick way to get your first card fast. (You only need some collateral)

My hope is that if you are still young enough you will implement the slow way. If you are not – well keep on reading.

The slow way to get a credit card fast

Open a debit or savings account (having an account demonstrates stability.)
Become an authorized user on a parent’s, siblings or friend’s card (do not use this card and make sure that the primary account holder is financially responsible.)
Get a student credit card.
Consider an auto loan (the interest rate is usually higher but it is a simple way to build good credit.)
Pay all accounts on time (set up debit orders to pay your bills or have a reminder system in place so that you’re never late with a payment. This includes utility bills, cellphone accounts and accounts at stores.)
Keep your employment history clean (your work consistency and stability in holding onto jobs is very important.)
Maintain a stable place of residence for as long as possible (this home address can even be that of your parents. Having a fixed home address greatly affects your credit rating.)
Consider a loan from a peer to peer lending site (individuals who offer these loans compete with each other to offer you the lowest rates. Often lower
than the bank’s rates. Ensure that these sites report to all the credit bureaus.)
Get a copy of your free credit report every year and make sure there are no mistakes.
Building good credit is about proving financial responsibility and that you can reliably repay money you are trusted with. A single missed payment can negatively impact your credit score and take many years to disappear.

If all these things have been taken care of, getting your first card will be quick and painless. Just make sure you are able to pay the balances when they fall due or all of your planning and sacrifice will be for nothing.

The quick way to get a credit card fast

1. Pre-approved Cards

Companies which offer pre-approved cards get information from you through an electronic trail that you leave behind every time you apply for a card. If you have a good credit rating, you would be able to get a loan every time you apply and can prove that paying it back will not be a problem. You would also be able to get the benefits and privileges given to people with a good credit rating.

Everything is also visible online if you happen to have a bad rating. Potential lenders are also able to see that you have been disallowed credit and how often. This is a clear evidence that you are in possession of a bad credit rating. Only those with bad credit ratings get continuously rejected.

As such, they send you invitations so that you will be able to get hold of their pre-approved cards. If you take a good look at what they are offering, especially the conditions, you will see that they are asking higher interest rates. But, given your situation, this is may be a pretty good opportunity to try to bounce back.

2. Instant Approval Card

Search online for offers by banks and credit institutions for instant approval cards. These cards can be approved or denied in as little as 60 seconds.

Compare the benefits and obligations attached to these cards.

Apply for those that suit your needs and re-compare all those that are accepted. Most times, you will only need one card. It is not necessary to get all the cards for which you are approved.

3. Secured Card

With a secured card the credit card company will require a deposit held against the card’s use that will be used if you fail to pay the account. The deposited funds for a secured card are not used to pay for the goods and services as you use the credit card. This deposit will also determine the limit on your card.

Secured card providers report to the credit reporting agencies.

Pay all your bills on time and after six months of ‘good behavior’ you can consider applying to the same lender for an unsecured card. By this time, you will have established yourself as a responsible borrower.

If your application for an unsecured card is turned down, find out the reason. Not all lending institutions are the same. Some may require that you wait a little longer before applying for an unsecured card. Say anything from 12 to 24 months.

Do not re-apply every month. Unsuccessful applications reflect on your credit rating and can leave you with an unfavorable rating.

4. Pre Paid Card

A pre paid card is very similar to a secured card in that it also requires a deposit up front. However, unlike a secured card, the amount available from this deposit is reduced every time you make a purchase. In this way, your card actually functions as a debit card. The details of account behavior on a pre paid card are not normally released to credit bureaus. So, if you are trying to build up a good credit rating, this is not always the best option.

5. Retail Accounts

Some retailers issue cards for use only at its own stores, while gasoline companies offer cards for fuel purchases. Gas and retail cards are more likely to approve consumers with little to no credit history. Retailers and gasoline companies report activity to Experian, Equifax and TransUnion and are useful credit rating builders.

6. Joint Accounts

You can make use of a parent, a spouse, a close relative or a friend with good credit by opening a joint credit card account with that person. The bank approves the application based on the other person’s high credit rating, and the account gets reported in both cardholders’ credit files.

Use your card responsibly and always pay on time or you may damage your joint account holder’s excellent records. Make sure that your joint account holder does the same. You will want to get your own card eventually and a bad credit report will hurt the process.

7. Charge Cards

The providers include Diner’s Club and American Express.

Charge cards are similar to credit cards, but the difference is that the balance of a charge card must be repaid in full every month whereas a credit card balance can be carried over to the following month. Charge cards don’t have credit limits either, so you have to be sure to spend only what you can pay off at the end of the month.

The Pros And Cons Of Prepaid Credit Cards

Observers in the lending industry have estimated that there may be at least 50 million Americans who are not able to qualify for credit. These consumers are usually young, often members of the minority groups and unbanked…and they are faced with the long-standing dilemma of credit: how can I build my credit record if no one will give me any credit at all?

One of the answers offered by credit card companies is a variety of prepaid credit cards, designed for use by specific segments in the market. The prepaid credit cards are meant for that significant portion of the population that cannot meet the qualification criteria for regular credit cards, or who qualified before but have since lost their credit due to repeated defaults and other reasons.

Advantages of Prepaid Credit Cards For those who do not have enough credit history or have had it blemished, prepaid credit cards are an effective way to build or slowly rebuild credit. That may not happen immediately, but it is something to work on over time. The banks that issue prepaid credit cards are also prepared to extend normal credit the moment you are able to show that you have become a worthy credit risk.

For the moment, you may have to make do with prepaid credit cards. You can use prepaid credit cards as you would any other regular credit card to purchase airline tickets, reserve hotel rooms, or order items online.

Prepaid Credit Card for Students There is a special prepaid Visa credit card for students, which offers a lot of convenience not only for the students but also for their parents. These reloadable prepaid credit cards offer parents several options on how to reload. Parents can add money to reloadable prepaid credit cards by depositing money, by arranging an automatic transfer of funds from their account (a deposit account or their own credit card account), or by online transfer. Using the prepaid Visa credit card is no different from giving the regular allowance to their child, only they do so by electronic means and there is no more cash that changes hands.

The big advantage of the prepaid Visa credit card is that the student is limited to spend only as much money as there is in the card. The parent is thus able to control to some extent the spending behavior of their child. They can use the prepaid credit card anywhere that the credit card brand is accepted.

Prepaid Credit Cards as Gift Certificates Some prepaid credit cards function like gift certificates. You buy the prepaid credit card for a certain amount, and your recipient can purchase items with it at any of the brick-and-mortar stores or online merchants, and also for mail order items, that accept the particular credit card brand. Your recipient can use the prepaid credit card only up to the amount of money that you loaded on it. This particular version of prepaid credit cards is non-reloadable.

Like any gift certificate, recipients of prepaid credit cards can buy whatever it is they want at any time they want. Unlike a gift certificate that, when it gets lost is lost forever to the recipient, prepaid credit cards may be replaced if it gets lost or is stolen.

Prepaid Credit Cards for Travel There is a prepaid credit card designed for travel. These reloadable prepaid credit cards can be purchased in lieu of travelers’ checks or cash. In a way, it combines the best features of a credit card and a traveler’s check because of its convenience and security features. Should you lose the prepaid credit card while you are on travel, you can easily obtain an emergency replacement, both for the prepaid credit card and some cash.

Prepaid credit cards for travel are accepted all over the world, and also allow you to obtain currency from ATM machines. When you need to reload and you are already traveling you can arrange for the reload by phone or online. Apart from the fact that it is a prepaid credit card, you can use it exactly like a regular credit card. That also means you enjoy other benefits just like a regular card — reimbursements for lost luggage of up to $1,000 per cardholder if your luggage is lost; zero liability if your prepaid credit card is used fraudulently after you lose it or have it stolen from you; purchase security up to $500 per claim for any items you buy with prepaid credit cards, which subsequently gets stolen or damaged for certain reasons.

Generally, you can purchase prepaid credit cards of all the major credit card brands at their participating retailers. You don’t have to worry about not having acceptable credit because prepaid credit cards are made available without need of a credit report or a bank account. The only qualifications you need to have are that you have reached 18 years of age and that you must be able to present a valid identification issued by government.

Disadvantages of Prepaid Credit Cards There are a few things about prepaid credit cards that may not be as convenient as the regular credit cards. For one thing, you load only so much money onto it. You will need to keep track of the balance on the prepaid credit card because not all of the merchant terminals where you use the card may be able to help you determine it. However, there are procedures that tell you how to determine your balance, and you will these detailed on the back of the prepaid credit card and in the instructions accompanying it.

The process of reloading your prepaid credit card may be a little inconvenient to some. If you’re using cash, you would have to visit the participating outlet where you bought your reloadable prepaid credit cards. The more convenient way will be reloading online.

There are also the charges. Prepaid credit cards impose an application fee, the amount of which varies with the issuer, and there is also a service charge that you have to pay monthly. You also have to pay for transaction fees, charges when you transfer funds to top up the balance, when you replace your prepaid credit card, and many other fees. To be sure about the fees, you should read closely the fine print on the prepaid credit card account.

Prospects of Prepaid Credit Cards Prepaid credit cards do not provide credit; it is your money that you’re using. You are asked to pay other charges, so it is not for free. You are paying for the convenience and security of carrying plastic instead of large amounts of cash. People with bad credit will be able to act as if they had a regular credit card and enjoy the convenience of one.

Issuers of prepaid credit cards realize that it is a good way to monitor the credit behavior of the cardholder. A prepaid credit card would be a source of information that indicates to the credit bureaus and issuing lenders about how you as the individual cardholder use the card to pay your bills such as utilities. If these consumer data could be formatted in such a way as to provide the basis for a statistical model on probable future behavior in spending, then this could become the foundation for building a credit history.

You would benefit, because by using prepaid credit cards you are rebuilding your credit. The prepaid credit card issuers would benefit, too, because they would be making previously unproven customers bankable. More people could then qualify for regular credit, and that would mean tremendous incremental revenue for the lenders.

Select a Debt Consolidation Loan Carefully

If you own a house or condo in Nevada, you can take advantage of Nevada debt consolidation loans. Loans to consolidate your debt can lower your monthly bill payments by consolidating your high interest debt into one easy low interest rate payment. Your credit card bills, car payments, student loans and other debts may have interest rates well over 15%. Some of these interest rates may be so high that the balance keeps growing–even though you pay the minimum payment every month.

Consolidating your debt by taking a loan on your Nevada home can give you relief from high interest rates. This is because lower interest rates are typically given to debt consolidation loans backed by a Nevada property. You can then use the money you get from the consolidation loan to pay off other high interest debt, like credit cards. You then pay one monthly payment at this lower interest rate. Instead of wondering if you will ever catch up to that credit card debt, your monthly consolidation payment begins to erase that debt.

Select Nevada Debt Consolidation Loans Carefully

Finding the right Nevada debt consolidation loan for your situation may be confusing. The pressure of steep monthly bills may prompt you to take the first loan you come across to consolidate debt. But, like any important decision, research can pay off. You need to be aware of the fees and closing cost associated with the home loan and factor in those costs when trying to determine how much the loan may save you over time.

Today the internet provides you a very good resource to find the best available debt consolidation loans for your Nevada property. These online resources will give you offers from multiple lenders in your area that can be used to compare against the rates your get from your local bank. Debt does not have to cause sleepless nights. See if a low interest rate home loan can help you get rid of your high interest debt.

Online Loan Calculators and Their Features

When considering a financing option, be it a mortgage for a house or simply a car or a boat loan, it is important to research the future payments involved and how these payments may effect your financial position. There are now quite a few online loan calculators of various types to help give an initial indication of the feasibility of a financing option. These calculators are typically general loan calculators that make certain assumptions in their calculations. For example, some of them may assume continuously compounding interest, and some may ignore any potential tax effects of the loan. When considering a specific loan, it is always important to understand the required payments for that loan and its specific conditions, such as interest calculation methods, any specific fees or charges or conditions associated with the loan, or any tax implications of the loan. A more general loan calculator can however be useful to get an initial approximation of the feasibility of taking a loan for a given financing requirement. In this article, I am going to discuss some of the basic types of loan calculators available and some of their features.
Some of the types of calculators are as follows:

General Loan Calculator: Such a calculator is useful to evaluate the payments required for a general loan. These calculators often allow you to input the loans interest rate, the frequency of loan repayments and the payment amount or the term of the loan. They can then return factors such as the term of the loan if you input the payment amount, or the payment amount if you input the loan term. The total amount repaid over the course of the loan, the total interest that has been paid, and potentially an amortization schedule, which can break down your payments for each pay period indicating how much of the payment is reducing the principle, how much interest is paid each period and the total principle remaining for each period.
Mortgage Refinance Calculator: A mortgage refinance calculator helps give an idea of the feasibility of refinancing a mortgage. In such a calculator, you can input the principle balance of your mortgage, your current payment amount and current interest rate and any closing costs on your mortgage. You can then input a refinancing loans interest rate and term and you will see information such as what your new monthly payment would be, any reduction in your monthly payment, the net savings or costs of the refinancing option as well as how long it may take for the refinancing to break even on any closing costs of your current mortgage.
Debt Consolidation Calculator: Another type of online loan calculator is a debt consolidation calculator. Such a calculator is helpful to evaluate the option of consolidating a number of existing loans into a single consolidation loan. A consolidation loan calculator can take inputs such as your exiting loan details, including their principle balance, their interest rate and your regular payment amount, as well as your consolidation loans term, its interest rate and any consolidation loan fees. The calculator will then help determine the difference in regular payments with and without consolidating the loans as well as the time until the loans are paid off and the total cost of any interest or fees of the two options.

As stated above, such online loan calculators are typically general calculators that can give a basic introduction to how feasible a financing option may be, however specific loans often have their own conditions and other factors that mean you should always have a professional perform the calculations related to a specific financing option when at the stage of considering a specific loan.

Loan Calculators Are Helpful Financial Planning Tools

Without financial planning, it is easy to end up in a bad situation. We would all love to be able to get through life without having to worry about loans and debt, but the reality is that very few Australians have that luxury. Dealing with finances is a necessary part of life in modern society, and it is best to be prepared. Part of being prepared is having a concrete understanding of how a loan works. You don’t necessarily have to have a degree in economics to do this, but you do need to take the time to understand the repercussions of any decision that you make before you set anything in stone. Taking advantage of financial planning tools is a helpful way of doing this.

Loan Repayment Calculators

These are some of the most helpful tools to take advantage of, because it is so difficult to understand exactly what a specific loan entails. Understanding the principle, term, and interest rate of a loan does not tell you what you really want to know, which is how much money you will ultimately spend in interest, and what the size of the monthly payments will be. Using a calculator that can determine this information for you is extremely useful, making it possible for you to determine if it is wise to sign up for a loan. Just because you are approved for a loan, doesn’t mean that it is the right decision for you.

Extra Repayment

One of the best things that you can do to eliminate debt is to make extra payments on your loan. By doing so, you reduce the amount of principle of the loan, which also decreased the amount of interest that you owe on the loan. In order to understand the effect of these payments, there are calculators that you can use in order to determine how making regular extra payments will effect the loan. A good calculator will allow you to specify when the extra payments start in order to see how starting earlier makes a much bigger difference. A lump sum calculator is also worth taking a look at, to see how much of an effect a single extra payment can have on the cost and term of a loan.

Honeymoon Loan Calculators

There are several different types of loan calculators that can be used in order to understand various types of loans, and how financial decisions can affect loans. One example is the honeymoon loan calculator. A honeymoon loan is a loan that comes with an introductory rate and a variable rate. The introductory rate is typically lower than the variable rate that you pay later on in the loan. This type of calculator can be used to help you better understand how a different introductory rate will effect a loan. It requires information about the principle of the loan, and the total amount of time to pay off the loan. It also needs info about the length of the introductory period, and the two different interest rates. Using this information, a honeymoon loan calculator can determine the monthly payments associated with the introductory rate and the variable rate, as well as determine the total amount of interest that will be paid during the lifetime of the loan. This can then be compared to the amount of interest that would have been paid if there were no introductory period.

Loan Comparison

One of the most effective tools to find the best option for you is a loan comparison calculator. A loan calculator can be very useful, but without a comparison it can be hard to understand the relative benefit of one loan over another. A good loan comparison calculator will take into account any fees associated with both loans, as well as the interest rates, including whether or not there is an introductory rate. This information can be used to compare monthly payments and overall interest to find the best option.

Savings Plan

In addition to loan calculators, calculators that can be used in order to understand how finance effects your savings can also be very beneficial. This type of calculator can help you understand how compound interest can work in your favour. A good savings plan calculator will allow you to enter in not only the initial deposit, but the regular deposits that you will make in the future. It will also ask for the interest rate and the term of the plan. It will use this information to calculate your total savings.

Tax Calculator

This information is useful to everybody. Of course, taxes are unavoidable, but without understanding how much of your money goes toward income tax, it is difficult to make any kind of plans about your future. Your salary and your take home income are not the same. The income tax system in Australia is a fairly simple progressive income tax, so it is not too difficult for your total taxes and your net income to be calculated based on this information. There are also stamp duty calculators available that can be used in order to determine the taxes associated with buying a property. These taxes are more complicated, and vary based on your location in Australia, so this type of calculator is extremely useful. With this type of loan calculator Australia will make more sense in terms of property taxes.

Borrowing Power Calculator

If you are thinking about making a major buying decision, like a home, it is a good idea to get some idea of how much you can borrow before you approach a financial institution. You won’t be able to know without actually applying, but you can get some idea using calculators available on the net. It’s good to get some idea of what you might be eligible for. This way, you can start to get an idea of what range is reasonable. This information can come in handy when you start to think about whether or not it makes sense for you to start thinking about buying a particular home, car, or other expensive purchase.

Loan Calculator Australia offers a host of loan calculators created for the sole purpose of assisting people with the assessment of all their financial circumstances and calculations. All types of financial calculators are available for use in any area where there’s a need to estimate the best and most satisfying financial outlook, but the area where they have gained significant importance is in loan [http://www.moneynet.com.au/] calculations.

Use Online Car Loan Calculators For a Clear Picture on Auto Loan Rates

Online car loan calculators are available to determine monthly payment or even car purchase price. Online auto loan rate calculators are available for buying or renting cars. Such tools are helpful in finding out which is the better value to opt for. The only limitation of a car loan calculator is that it is liable to change, as the actual repayments are volatile. Car loan calculators are useful as the car loan payments should be calculated before hand and dealer costs for cars are to be looked up to save one from being deceived by banks and finance companies.

Monthly Installment Calculations

Calculators share general feature and most of them demand the amount of loan to be provided, and the number of installments for paying back. These help find out financial commitment involved. An auto loan calculator can be offered free on the internet as an excel spreadsheet download area.

The Three Factors Affecting Loan

In car loan calculation, it is important to estimate the monthly payments. Three basic factors to consider during car loan calculation are interest rate, total loan principal and loan period. This can calculate our budget and monthly payments. These factors are to be considered and it is as important as asking a loan officer or going online. Online lenders have a simple car loan calculator that is accessible from the website that will help determine the affordability.

The Loan Principal – In car loan calculation, the loan principal is the amount of money originally borrowed and the total interest charges at the end of the loan period depend on the amount of the loan principal and the loan period. The more principal borrowed, the more money will have to be paid back over the loan period. With each monthly payment, the total loan principal gradually deducted. For the first few months, a good percentage of the monthly payments are used to cover the interest costs. A small percentage is used to pay off the loan principle and as the loan matures, more payments will go towards paying the principal and less to pay the interest of the loan.

Interest Rate And The Loan Period – The calculators are available online to determine the loan tenure on entering the monthly installments and the interest rates. Interest rates vary with lender and it depends upon the credit scores of the borrower. Higher the FICO score lower the interest rates would be.

Types Of Car Loan Calculators Available Online
Free Car Loan Calculator – A net facility, for knowing the loan amount to be paid back.

Online Auto Loan Calculator – Online car loan calculators to find the best deal.

New Car Loan Calculator – To work on ideal monthly payments. There are certain calculators which can be used for a variety of uses like used car loans. In these calculators, the end-user can enter his own interest rate for his loan.

Affordability Check Calculators – Affordability check calculators help in arriving at a close approximation reckoning with the installment amount, insurance, fuel and maintenance. The most important decision is whether to buy a brand new or a used vehicle and to buy or lease. Car loan calculators are useful in hastening the decision to buy a car.

Drawbacks

These web based calculators help calculating only the car price but not the affordability. Once the car is bought using a car loan, a person’s budget should add fuel and maintenance costs, which are not calculated. The calculators even miss out on calculating taxes and liens.

Most lenders want people take out as much loan as possible, as it is profitable for them. Car loan calculations give an estimate of the total costs, which will determine affordability.

Choose A Loan Carefully

If you are thinking of taking up one of the many offers that you see on the television or in the daily newspapers. Offering to give you a personal loan that will consolidate your debt into one manageable monthly payment, then before you take them up on their offer, sit down and think it through. This is because they are not as super and as painless as they would like you to believe.

Most of us when it comes to special deals will have a natural thought process of saying that there must be a catch. Though with the consolidation loans, many seem to have a blind spot and only look at the loan amount column and the monthly payment column.

This is the trick that the loan companies only want us to see, as by putting it in as straight forward as this means that we only look at the payments, to decide that we can afford to pay this amount back. Due to it being less than what we are paying in total, to our individual debts.

By paying back the consolidation loan, we will look upon it as paying back the monthly repayments easier. Though what we fail to see past is the other trick that the loan company will install, in the look of the loan and that is the timescale in which you have to pay the loan back. By putting the payments against the amount of months that you have to pay the loan, many will feel that the term of the loan is not too bad. But the simple fact of the matter is that if you are paying the loan for 60 months, therefore simple arithmetic of 60 payments.

What you really must do is put it into years and your whole thinking will change and you may ask yourself, “Do I really want to still have this debt 5 years down the line?”
If the answer is still “yes” then maybe you should look at what this consolidation loan is going to cost you over the term of repayments and maybe your answer may not be so stead fast.

The interest rate on most of these loans is “variable” so can change from one year to the next. OK they may go down but more than likely they will rise, so if you do go for a consolidation loan make sure that the interest rate, is lower than that of your current debts. With another must do is make sure that you work out if you could pay off your existing debts in under the period in which you are taking the loan out for, then do so.

If you cant then the idea of having all of your other debts cleared in one fell swoop, is appealing, but comes with a word of warning.

DO NOT in any circumstances use the credit cards or store cards that you have cleared, as this will only mean that you will build up more debt, sinking you further into a financial swamp that you may find you cant get out of this time.