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       HOW DO I KNOW IF I CAN                            WHAT FEDERAL LAWS SHOULD I                             REMEMBER
       AFFORD A LOAN?                                    KNOW?                                                   Budget your money - Provide your monthly
       Use the "Monthly Spending Plan" shown below       Truth in Lending Act - Requires creditors to           spending plan when you meet with creditors. It will
                                                                                                                help them make a responsible decision.

       to determine if you have sufficient income to     give you written disclosures of important terms of
       cover your living expenses. The only time to      the credit agreement such as APR, finance
       take on a new monthly credit payment is when      charges, monthly payment amounts, payment               Shop, Shop, Shop - Compare the costs of
       you're spending less each month than you          due dates, total amount being financed, length of      credit from different creditors. Shop for credit like
       take home. The additional debt load should not    the credit agreement and the consequences of           you would shop for anything else.
       cut into the amount you've committed to saving.   not making monthly payment.                             Beware of "now or never" offers - If it's a
Personal Loans

                                                                                                                                                                          Personal Loans
                                                         Federal Trade Commission's Credit Practices            good deal, it will probably still be there after you've
       MONTHLY SPENDING WORKSHEET                        Rule -                                                 had time to think about it. Don't be pressured into
                                                         • Requires creditors to provide a written notice to    making a quick decision.
                                                           potential co-signers about their liabilty if the                                                                            s Is a Personal Loan Right
       Monthly Take Home                $                                                                        Ask questions - Don't sign on the line until all                       for Me?
                                                           other person fails to pay,                           your questions have been answered.
       Saving                          –$                • Prohibits late charges in some situations; and
                                                         • Prohibits creditors from using certain contract       Read the contract - Don't sign a contract that                       s What Happens When I Apply
       Monthly Expenses:                                                                                                                                                                 for a Personal Loan?
                                                           provisions that the government found to be           you don't understand or has any blanks. (A signed
       Mortgage Payment/Rent           –$                  unfair to consumers.                                 contract with blanks can be completed as anyone
                                                                                                                wishes and it will be legally binding.)                                s Will I Need a Co-Signer?
       Utilities                       –$                Equal Credit Opportunity Act - Prohibits the
                                                         denial of credit because of your sex, race, marital     Keep your contract in a safe place - It's                            s Do I Need Credit Insurance?
       Groceries/Lunches/Dinners Out – $
                                                         status, religion, national origin, age, or receiving   important to keep all paperwork relating to your
       Transportation                  –$                public assistance.                                     credit obligations. If questions come up later, you'll                 s What Terms of Financing
                                                                                                                have your agreement in writing.                                          Should I Know Before I
       Insurance (Home,Vehicle,Life)   –$                Fair Credit Reporting Act - Gives you the right                                                                                 Sign?
                                                         to learn what information is being distributed          Make your payments on time and in full —
       Taxes                           –$                about you by credit bureaus.                           This is one of the best ways to build a good                           s What Happens If I’m Late
       Clothing                        –$                                                                       credit history. Repeated late payments will trigger                      With My Payment?
                                                         Fair Debt Collection Practices Act - Prohibits         late payment fees, and hurt your credit report,
       Personal                        –$                third party debt collectors from using unfair or       which will make it difficult to obtain future credit.
                                                         deceptive practices to collect overdue bills that                                                                             s How Do I Know If I Can
       Entertainment                   –$                your creditor has forwarded for collection.                                                                                     Afford a Loan?
                                                                                                                                      AFSA Education Foundation
       Gifts & Contributions           –$                                                                                             919 Eighteenth Street, NW                        s What State and Federal
                                                                                                                                      Washington, DC 20006-5517
       Family                          –$                ADDRESSES                                                                                                                       Laws Should I Know?
                                                                                                                                      Phone: 888-400-2233
                                                         FEDERAL TRADE COMMISSION                                                     Web site:
       Education                       –$
                                                         Washington, D.C. 20580
       Credit Card Payments            –$                Phone: 877-FTC-HELP (382-4357)
                                                         Web site:
       Other Creditor Payments         –$
                                                         FEDERAL RESERVE SYSTEM
       Vehicle Payments                –$
                                                         Washington, D.C. 20551
                                                         Phone: (202) 452-3693
       Remaining Balance               =$                Web site:
    When it comes to borrowing money, consumers            Information about you and your credit experiences,         WHAT TERMS OF            FINANCING                    SHOP FOR THE BEST DEAL WHEN
    have a variety of choices, ranging from credit         such as your bill-paying history, the number and                                                                 APPLYING FOR A PERSONAL LOAN
    cards to home equity loans. Personal loans
                                                                                                                      SHOULD I KNOW            BEFORE I SIGN?
                                                           type of accounts you have, late payments, collection                                                             Review and compare the financing terms offered
    are used for various purposes such as meeting          actions, outstanding debt, and the age of your                                                                   by more than one creditor.
                                                           accounts, is collected from your credit application        1. Take the time to know and understand all
    family emergencies, purchasing home furnishings
                                                           and your credit report. Your credit history helps             of the terms, conditions and costs of a loan                                 Name of           Name of
    or consolidating other debts. These loans are
                                                           predict how creditworthy you are — how likely it is           before you sign the contract.                                                Creditor          Creditor
    generally short-term. Most personal loans range
    from $100 to $5,000 with the borrower paying           that you will repay a loan and make the payments           2. Review your credit application and loan            Amount Borrowed            $______        $______
    equal installments at regular intervals over a         when due. The creditor's decision to loan you                 documents carefully.
Personal Loans

                                                                                                                                                                         Personal Loans
                                                           money is based upon what appears on your                                                                         Annual Percentage
    determined number of weeks, months or years.                                                                                                                            Rate (APR)                  ______%        ______%
                                                           completed credit application and your credit report.       3. Ask questions about any items you don't
    This brochure will help you understand the terms                                                                     understand before you sign.
                                                                                                                                                                            Credit Insurance
    of financing and issues to consider before entering                     S
                                                           WILL I NEED A CO-SIGNER?                                   Amount Financed - The total dollar amount             (Optional)                 $______        $______
    into a personal loan.                                  A co-signer may be needed if the borrower has:                of the credit that is provided to you.             Finance Charge             $______        $______
                                                           not applied for credit before; an income level too
    IS A PERSONAL LOAN RIGHT FOR ME?                       low to qualify for the loan; seasonal or sporadic          Annual Percentage Rate or "APR" -                     Fixed Rate Financing        ______%        ______%
    When deciding whether to obtain a personal loan,       income, a weak credit history; or excessive                   A measure of the cost of credit expressed
    consider the benefits and responsibilities.            financial obligations.                                        as a yearly rate.                                  Length of Payments
                                                                                                                                                                            in Months or Years          ______         ______
    A personal loan:                                                                                                  Credit Insurance - Optional insurance that
                                                           A co-signer assumes equal responsibility for the
                                                           loan. The account history will be reflected on the            is designed to repay the debt if the borrower      Late Payment Fee           $______       $______
    1. Obligates future income. You'll be required to
       set aside a certain amount of future income for     co-signer's credit history as well. You should exercise       dies or becomes disabled.
                                                                                                                                                                            Monthly Payment Amount $______           $______
       loan payments.                                      caution if asked to co-sign for someone else.
                                                           Understand the terms and conditions before you
                                                                                                                      Finance Charge - The dollar amount you
    2. Requires discipline. Borrowing wisely means                                                                       pay to use credit.
                                                           co-sign and keep a copy of the loan contract.                                                                    WHAT HAPPENS IF I'M LATE WITH
       not borrowing more than you can handle. Don't                                                                  Fixed Rate Financing - The interest rate and
       let the thrill of buying or having a sum of cash    The Federal Trade Commission's Credit Practices                                                                  MY PAYMENT?
                                                                                                                         the payment remains the same over the life
       obligate you to more than you could afford.         Rule requires creditors to advise co-signers about                                                               Creditors understand that circumstances such
                                                                                                                         of the loan. Equal monthly payments of
                                                           his or her potential liability if the other person fails                                                         as unemployment or illness can make it very
    3. Makes it possible to meet unexpected                                                                              principal and interest are made until the
                                                           to pay. State laws can vary in consumer protection                                                               difficult to meet bill payments. If this happens to
       expenses. The ability to borrow and make                                                                          debt is paid in full.
                                                           provisions relating to cosigners.                                                                                you, contact your creditor, explain your situation
       affordable payments can be helpful if an                                                                       Late Payment Fee - A fee that is charged              and work out a repayment schedule.
       emergency arises that requires extra money.                                                                       when payment is made after its due date.
                                                           DO I NEED CREDIT INSURANCE?                                                                                      You also might be offered the option to
    4. Allows you to obtain products and services          Its purpose is to repay the debt if the borrower                                                                 "refinance" or “renew” your loan. Keep in mind
                                                                                                                      Monthly Payment Amount - The dollar
       now and pay for them later. A loan can              dies or becomes disabled. Credit insurance                                                                       that early or frequent renewals can significantly
                                                                                                                         amount due each month to repay the
       provide an opportunity to purchase bigger-ticket    purchased in connection with a consumer                                                                          increase the overall cost of your loan. Each time
                                                                                                                         credit agreement.
       items and use them right away.                      installment loan is optional in most states.                                                                     you refinance, you pay additional fees and
                                                                                                                                                                            interest charges. Refinancing should only be
                                                           In deciding whether to get credit insurance, evaluate
    WHAT HAPPENS WHEN I APPLY FOR                          what would happen if death or disability were to             Other products may be offered for                    an option if it serves to benefit you and fits into
    A PERSONAL LOAN?                                       occur before the loan is repaid. If a borrower wants         purchase with your loan such as a
                                                                                                                                                                            your spending plan.
    You will be asked to complete a credit application     credit insurance, he or she is required by federal
    that may include: your name, social security number;
                                                                                                                        motor club membership, term insurance,              If your situation requires outside help, contact a
                                                           law to sign a statement to that effect. The cost of          or warranties — these are optional and              nonprofit budget and credit counseling agency,
    date of birth; current and previous addresses and      credit insurance coverage must be disclosed in
                                                                                                                        not required to get a consumer loan.                often called a consumer credit counseling
    length of stay; current and previous employers and     writing. You are entitled to receive a copy of the                                                               service. These agencies can work directly with
    length of employment; occupation; sources of           certificate of insurance from the creditor.                                                                      consumers and their creditors to help resolve
    income; total gross monthly income; and financial
                                                                                                                                                                            debt problems.
    information on existing credit accounts.

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