//The Costs of Credit

Loan rates and terms from finance companies, retail stores and financial institutions can vary greatly. Compare these things when shopping for credit:

  • Annual percentage Rate (APR):  This is the standardized interest rate you must pay the lender each year for the use of borrowed money.
  • Finance charge:  This is the total dollar amount the loan will cost you.  It includes fees, interest, plus any other charges.
  • Loan maturity:  A longer repayment period lowers your monthly payments, but increases the total amount of interest you pay.
  • Grace period:  This is the length of time you have before interest is charged.

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