Financial Planning Online

Financial Planning Online - • Interest Rates on Personal...

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Financial Planning Online: Loan Request Online Go to: http://www.lendingtree.com This Web site provides a set of questions that you can answer to specify the type of loan that you desire. You will then receive up to four loan offers from various financial institutions within the next business day Background on Personal Loans (cont’d) Focus on Ethics: Predatory Lending Beware of illegal lending practices Lender charging high loan fees Lender provides home equity loan with the expectation of default so he can take ownership Lender ties other products to loan approval Lender includes balloon payment at end of loan Loan agreement includes confusing information Interest Rates on Personal Loans Annual percentage rate (APR): a rate that measures the finance expenses (including interest and other expenses) on a loan on an annualized basis Simple interest: interest on a loan computed as a percentage of the existing loan amount Add-on interest: a method of determining the monthly payment on a loan
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Unformatted text preview: • Interest Rates on Personal Loans (cont’d) • Interest Rates on Personal Loans (cont’d) • Simple interest: interest on a loan computed as a percentage of the existing loan amount (or principal) Size of payment depends on size of loan, interest rate and maturity The higher the interest rate, the higher the payment The longer the maturity, the lower the payment • Car Loans • Selecting the car—things to consider Personal preferences Price Condition Insurance Resale value Repair expenses Financing rate Revised car loan contracts • Car Loans (cont’d) • Negotiating the price Negotiating by phone may be beneficial Trade-in tactics can be misleading No-haggle dealers can save time and stress Information is valuable–shop around Purchasing a car online is possible, but not yet a streamlined process...
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