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Debt Management Advice & Tips

Understanding the best choices to make when it comes to borrowing money to buy a home, pay down debt, or invest for the future can get confusing fast. We can help answer your debt management questions, and make it all make sense so you can borrow with greater confidence to establish your credit history, build your credit score, and get the money you need without the debt nobody needs.

How to Manage Debt Wisely

  • Borrow only what you need and what you can afford to repay.

    • Before you consider what kind of credit to use, you should determine whether you should use credit at all. Ask about the annual percentage rate (APR) of interest charged, if the interest rate is variable, and what fees are charged, if any.

  • Understand Your Borrowing Options
      • Installment loans: These are loans that give you a lump sum of money up front, repayable in steady monthly payments with predetermined repayment terms, such as a fixed interest rate. Car loans and mortgages are installment loans, for example.

      • Lines of credit: These allow you to borrow money up to a certain amount any time you want and generally offer flexible repayment terms. Credit cards offer a line of credit. With both types of credit, the maximum amount you can borrow, or credit limit, depends upon your credit score, income, and other factors that determine your ability to repay.

      • Secured credit is backed by property you own and is usually less expensive than unsecured credit, but you should carefully consider whether you can afford to lose the property you use to secure the credit in case you experience difficulty paying back your loan.

      • Unsecured credit, like that offered by credit cards, will usually cost more, but will not place your personal property at risk, except under certain circumstances (e.g., if you file for bankruptcy). Borrowing money is a serious undertaking that comes with important responsibilities.

Loans are Contracts and Carry Important Responsibilities

  • Understand your responsibilities. Just like with any contract, you need to understand the responsibilities and the consequences if you fail to meet what’s required of you. Even a few missed or late payments can affect your credit record and make it harder to get loans in the future and make them more expensive.
  • If you find yourself having difficulty repaying your loans, you should act right away to address it. The worst mistake people make is ignoring the problem or hoping it will go away. It won’t. Dealing with it early is the best course of action. Below are some warning signs of problems. If these sound familiar, look at the section, “What to Do if You Need Help,” for ways to get your finances in order.

Identify the Warning Signs and Get Debt Help

If any of these reflect your financial situation, you may need help to manage your finances. We'd love to connect with you.

  • Making only minimum payments month after month, or skipping payments.
  • Making late payments.
  • Borrowing money to pay your bills.
  • Frequently using cash advances from credit cards.
  • Applying for new credit to pay off existing credit cards.
  • Having little or no cash for your needs

Helpful Debt Management Resources