Achieving Your Financial Goals

Sometimes, you may need to borrow to get yourself over the finish line. Borrowing money is a big decision, so it's important to know your options, understand the costs, and prepare for the process. These tips can help.

 

As you start to explore your borrowing options, first decide on the type of credit that may work for your situation. In addition, consider other factors like the amount you need to borrow, the Annual Percentage Rate (APR), your assets, and your financial situation. Learn more about choosing the right credit option for you.

 

If you decide to borrow to help reach your goals, know that the amount you borrow is just one part of the loan's cost. The interest rate, term, and fees all affect the amount you need to repay. The longer your loan repayment term, the more you may pay in interest. Learn more about your total cost of borrowing.

 

When lenders consider a prospective borrower, they look at what's commonly known as "the 5 Cs": credit history, capacity to repay the loan, collateral, capital, and conditions. One aspect of "capacity" is your debt-to-income ratio (DTI), or your monthly debt payments divided by your gross monthly income. A DTI under 35% shows lenders that you’re not overextended. Find out more about the other four factors here.