HOW BAD DO YOU NEED MONEY

HOW BAD DO YOU NEED THE MONEY?

Everyone comes to a point in their life where they need to make informed financial decisions. One decision that requires you to be VERY INFORMED is the decision to borrow money.
 How much do I borrow? (the least amount that is necessary)
 What is the interest rate?
 What are the terms? The payment amount and length of repayment?

Television and Internet advertising from companies offering you a loan that has few qualifying requirements, and requires no collateral, sounds too good to be true. If you do not pay attention to the numbers, you may believe that you have just hit the jackpot and found a lifetime source for your loans. Let us review detail from some actual loan documents:

Amount Financed Terms Finance Charge APR Total
Over length of Loan Repayment
 $  2,525.00   48 months  $   11,529.12 138.12%  $   14,054.12
$ 292.79/month
 $  9,925.00   84 months  $    53,170.94 89.68%  $   63,095.94
$751.14/month

You tell me, did these people hit the jackpot? These loan transactions may be legal but that does not make them any easier to swallow. How bad do you need money to fall prey to the companies that will provide it to you for a “slightly higher than normal fee”? Even if, after careful consideration, you determined that you needed to use these companies, you can still control some of your outcome.

Let us use the $9925.00 loan as an example. I have listed some options below:

Amount   Financed Terms Finance Charge APR Total
Over length of Loan Repayment
 $  9,925.00     36 months  $18,932.12 89.68%  $ 28,857.24
$801.59/month
 $  9,925.00      48 months  $26,833.88 89.68%  $ 36,758.88
$765.81/month
 $  9,925.00     60 months  $35,175.93 89.68%  $ 45,100.80
$751.68/month

As you can see, if a person is willing to accept a slightly larger monthly payment, even a loan at 89.68% can be made easier to swallow. How bad do you need the money? Only you can answer that question but be sure to consider all of the options before making a decision.

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