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How to Outsmart a loan
Transcript of How to Outsmart a loan
Interest: the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding
Loan: money that is borrowed, especially a sum of money that is expected to be paid back with interest
Investment: the action or process of investing money for profit or material result
Why Interest Rates ?
The reason why interest rates exist is because lenders risk their money which could be invested on them or something else that is going to be productive to them. Instead they risk themselves by lending their money to borrowers in which they charge them interest in a way that its going to benefit the lender.
In most cases interest rates depend on your credit. If you have good credit the interest rate will be low, if you have bad credit the interest rate will be high
How many types of Loans ?
There is 12 different types of loans student loans, mortgage loans, auto loans, personal loans, loans for veterans, small business loans, payday loans, borrowing from retirement & life insurance, consolidated loans, borrowing from friends and family, cash advances, home equity loans
All of these loans are similar because its money that you are borrowing. Which eventually you must pay back with an interest rate in most cases
What is a good Investment ?
A good investment would be for example inventing a cheesecake recipe and getting profit by selling it to a big company for a lifetime.
A bad investment would be giving your recipe to the company and not negotiating for a lifetime profit but just a year.
How to Outsmart a Loan
By: Kimberly and Daisy