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Debt Management
How and When You Should Borrow Credit Consumer Loans
– Student Loans– Automobile Loans– Home Equity Loans
Home Mortgages
Pros and Cons of using credit
Disadvantages Outside your means Impulse buying. Future income INTEREST!!!!!!!!!!!! Rates chance “Instant gratification.” Too much = poor credit
rating.
Advantages Bargains Use while paying Emergency funds Long-range purchases Credit rating Paper trail Less cash needed
Wise credit practices
10 percent Outlast the credit payment period Down payment Increase in value More than minimum Shop for credit
Credit warning signals
Putting off payments past-due only the minimum 1 to pay 2 Ignoring interest cash advances Credit limits running out of money Failing to save
Home Mortgages
80/20 mortgageAdjustable rate mortgage (ARM)Rural Housing ServiceFederal Housing Administration (FHA)
insured
Insurance
RISK Types
– Auto Insurance– Life Insurance– Property Insurance– Health Care Insurance– Disability Insurance
Auto Insurance
Rate Factors– Driver
Age and Gender Driving record Marital status
– Vehicle Age and Use Location Cost of repairs to vehicle Safety devices in vehicle
Policy Cost Elements– Coverage
Collision/Comp/UM Medical Liability
– Deductibles
Property Insurance
Considerations Risk factor where insured lives Value of property Amount of coverage and
deductible Type of coverage selected
Health Insurance
Risks involved in insuring a particular person– Age of insured– Occupation of insured– Physical condition of insured– Sex of insured– Medical history of insured
Amount of coverage and deductible Medical-care cost in local area Type of health insurance selected Type of policy selected — group or individual
Disability Insurance
Do You Need It? Rates and Occupation Where Do You Get It? How Much Do You Need?