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APR Explained: Why A Lower Rate Is Your Highest Priority
How much does your credit card or loan cost you? The answer to this lies in the Annual Percentage Rate (APR). This is a universal measure used to compare the prices of different financial products such as credit cards, loans, and mortgages. To compare different credit products and loans, take a look at the APR and it will give you an idea of how much each costs. This way, you can make a better and informed decision.
What is APR and how does it work?
When applying for a loan, getting the lowest interest rate should be the highest priority. The annual percentage rate is the interest paid for a loan yearly. In the simplest terms, this is the cost of borrowing money.
The APR is shown as a percentage. It contains all the costs and fees related to the loan. The fees and costs are different depending on the type of loan you apply for. For most of the loans apart from mortgages, the fees relate to maintaining the loan and processing.
The most significant advantage offered by APR is the ability to compare loan rates. Take a credit card for example. It comes with different types of costs and fees associated with the account. With the APR, you can compare different cards easily.
The APR is required to be shown to all customers by loan issuers and credit card companies. It facilitates a good understanding of the actual loan rates applicable as per their agreement. Or credit card companies, they are allowed by law to advertise their monthly interest rates. However, they are required by law to state the APR to all customers before signing any agreement.
A loan can be offered with either a fixed or variable APR. The fixed APR loan has a fixed interest rate with a guarantee not to change during the entire life of the loan. The variable APR loan’s interest rate can change any time.
Is the lower APR better?
To put it out there, the lower the APR, the better the loan. However, when it comes to a product like mortgage, the lower APR loan might not be the best. Some mortgage loans give you a lower APR but you pay higher closing costs, higher points and other fees associated with closing the home loan.
Always go for a loan with a lower APR. This is the cost of your loan and the lower you go, the better. However, make sure to read all the details when getting a loan and ask the originator for as much information and details as possible.
In the New Year, it’s an excellent time for a quick change. Most people relate it to education because each year more than 20 million people get enrolled in universities and colleges. Whether you are thinking of enrolling in a program or starting to earn credits in a new field, it’s a great time to learn on the web. Nowadays, everyone uses the internet and stays online for several hours, playing video games or watching videos.
In the meantime, you have seen several ads for online colleges. These online colleges offer several programs that are convenient, flexible and money-saving. But do you think that is enough for you? In this blog post, you will see how you can compare online to offline colleges.
Get to Know About Four Best Ways to Compare Online to Offline Colleges :
1. Compare the Cost of Both:
A Recent survey directed by the American Association of State Colleges and Universities uncovered that 60% of the 400 state-funded colleges reviewed charge the equivalent per credit hour for online courses as they accomplish for study hall courses. The highest contrast in price will be between foundations, not between sorts of organizations.
2. Your Convenience:
You can concentrate on your course load as your timetable permits. It implies that you can keep up your work and other obligations while finishing your training. There’s likewise the driving issue. A study hall course will expect you to communicate, adding time and worry to your instruction.
3. The Piece of Education:
The most important question you have to address while considering your school alternatives is training quality. That is what you’re there for, right? The investigation found that studies in online classes are bound to contribute in-class conversations and have discussions with peers about their significant fields.
4. Worth of Both Colleges:
The genuine issue found for online colleges is their reputation. A few, similar to the University of Phoenix, have a reputation issue. Others, as Southern New Hampshire University, have earned a lot of positive press for their inventive way to deal with instruction. At the point when you’re picking a degree program, look at ranking like US News and World Report’s rundown of best online colleges.
Top 5 Reasons Why Credit Unions are better than Banks
Are you one of those people who walk past a credit union in your community without looking twice? Then you don’t know what you are missing out on when it comes to financial matters. One of the main reasons why some people are not in credit unions is because they don’t know how they operate and what they entail. Credit unions are non-profit organizations with an objective of serving their members rather than making profits from service provision. They offer similar financial services compared to banks such as loans, checking and savings accounts, credit cards, and mortgages.
Here are five reasons why you should choose a credit union over a bank:
The main reason why credit unions exist is to serve their members rather than accomplishing the goals of the institution. Members come first in credit unions then the rest follows. On the other hand, banks are formed with the aim of making profits, and they’ll do whatever it takes to meet their profit margins.
- Better interest rates
Credit unions have lower interest rates on loans, credit cards, and even mortgages. Besides that, most credit unions are less strict when it comes to loan eligibility, and they are not selective of one’s source of income. Savings accounts, CDs, and bonds in credit unions also yield returns compared to having the same in banks.
For those who are not members of any credit union, you might not be aware that credit unions belong to members and they are responsible for their operations. Once you’ve made your first deposit, you are granted voting rights, and any surplus income will be reimbursed as dividends. Being a member means that you get financial services at lower rates and participate in decision making.
- Fee-free accounts
A majority of banks require account holders to maintain a minimum balance which is not the case with credit unions. One of the main reasons why most people are drawn to credit unions is because they offer free checking accounts and no minimum balance requirements to cut down any extra fees.
- Relationship building is valued
Let’s face it, credit unions value members who have been with long enough and they tend to be more lenient when such members want to borrow funds. Besides enjoying lower interest rates, when applying for loans, the terms and conditions are more flexible for such members provided their credit score is high. In case you haven’t joined a credit union, take the time to visit one in your local community; you’ll be surprised to see a big difference between them and banks.
Saving money usually means overlooking all glamorous and luxurious habits in your life and can seem like a drag. It’s a great time to challenge yourself and encourage saving in a fun way. Saving money is essential to achieve a full scope of objectives. Having some cash saved can help you plan for crises that may happen in the future. Saving money for the future doesn’t require you to be a big downer. There are more ways you can make saving fun instead of something you dread to do.
Now make money-saving a fun thing to do:
1. Put a clingy note in your wallet:
While going out shopping, you have to think about what you need. You can write this sentence in bold letters on paper and stick it in your wallet. You can even take a stab at folding it over your platinum card. Ensure you put it somewhere. The thought here is to get you to see it before you make a purchase that is not needed.
2. Make It a Competition:
If you know another person who’s in a similar monetary circumstance, challenge them to a save off! Pick a time frame—express three to six months—and see who can set aside more cash and dominate the match. The ideal approach is to make the challenge reasonable.
3. Go up against your self:
Have you moved yourself to a game? You know, such as checking whether you can make more steps every day, locate the fastest route home, or eat a whole cake in one sitting? Indeed, you can do something very similar to money-saving. Count up how much money you’ve put into the reserve funds each month and afterwards, challenge yourself to beat that months sum.
3 Reasons you should have an IRA (Individual Retirement Account)
Do you have an IRA account? Well, consider getting one soon. An IRA can come in the form of traditional IRA, Roth IRA or Rollover IRA. Financial institutions set up these accounts to encourage individuals to save for their retirement effectively on a tax-free basis. Regardless of the type of IRA you choose, you can rest assured that your money will potentially grow faster than it would in other taxable accounts.
Why should I have an IRA (Individual Retirement Account)?
1. Tax advantages
Having an IRA account can have so many advantages for those planning their retirement. Making contributions to a traditional IRA ensures that your money grows tax-deferred until the day you withdraw it after retirement. Alternatively, your savings can experience tax-free growth if you contribute to your Roth IRA devotedly. You have every reason to smile knowing that no one will tax whatever growth your investment attracts. Saving through IRAs is, without doubt, the most convenient way of generating tax-free income for your heirs. Interestingly; even in your death, your beneficiaries will not experience any taxation complications after inheriting your proceeds.
2. IRA account holders enjoy penalty-free withdrawals of their contributions
Another incredible reason to have an IRA is that holders enjoy Penalty-free withdrawals of contributions even before their retirement particularly if they contribute to a Roth IRA. Nevertheless, Traditional IRA/401(K) account holders are required to pay a penalty of up to 10% if they decide to withdraw their contributions before they are 591/2 years of age. Roth IRA account holders can withdraw whatever they’ve actually contributed and sell their investments (accrued market returns) penalty-free provided they are not yet 59 ½.
3. Flexible savings or contributions
Enjoy the flexibility of distributions by investing in a Roth IRA account. Apart from attracting zero-penalties or taxes, Roth IRA account holders can make their contributions at their own convenience provided they don’t default. Young people should grab every available opportunity to invest their money in IRAs.Why? Well, as a young adult, you are allowed to claim your money back after acquiring a reasonable rate of return on your investment. On top of that, you can manage to pay yourself and contribute to your retirement fund at the same time without unnecessary complications.
The bottom-line: There are a TON of reasons to own an IRA. All you have to do is contact MACCU, make your contributions, and see your investment returns grow. Do the right thing today to enjoy your tomorrow after retirement.