Your Loan Questions Answered

 
 

Your Loan Questions Answered

Perhaps you need some extra funds to make that next big purchase - maybe it’s to buy a new car, renovate your kitchen or to pay tuition bills. In any case, shopping for a loan can be a daunting task, and you most likely will ask yourself questions such as, “How do I get the lowest payment?”, “How do I get the lowest rate?” or “How does the term affect my monthly payment?” This article will help you answer these three questions.

A monthly loan payment reflects the interest and principal of the loan spread out over the loan term. When selecting a longer term loan, the monthly payment is reduced. However, more interest will be paid over the life of the loan.

Typically, loans with shorter terms have lower interest rates, but they also have higher monthly payments because the loan is being paid back over a shorter period of time. A benefit of a shorter term is paying less interest over the life of the loan.

In general, variable rates are lower initially than those on fixed rate loans, but can change monthly. Loans with variable rates have periodic rate changes to reflect market conditions. The rate on a variable loan can go up or down depending upon the index the loan rate is tied to. There is a built-in ceiling on how high a variable rate can rise so that it never exceeds a specific rate. The highest rate that can be reached varies by loan.

Dollar Bank is a proud partner of DCR and is committed to supporting the organization in its efforts to build a well-connected community of residents in downtown Cleveland. Stop by either of our convenient downtown Cleveland Dollar Bank offices (Galleria and Public Square) to speak with our banking representatives so they may answer any further questions for you!

The information presented is general in nature and is for information purposes only. It is not intended to provide specific legal, tax or other advice to individuals.