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Advance Personal Finance

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There seem to be more and more lenders marketing traditional installment loan products to consumers interested in making a large purchase. Finding the product that is right for you of course largely depends on your personal situation, but many times a new credit card is the most attractive and affordable option. Consider that credit cards often times provide an interest free period. Credit cards do not require you to pay the loan off during this promotional period, but rather you start paying interest only on the remaining balance. Interest free periods range from 6 to 12 months and in some cases even longer. They also allow you the option to transfer balances to other 0% interest credit cards. The smart consumer utilizes these interest free periods to eliminate or greatly reduce the interest paid. Many of the new installment loan products are charging an “origination” fee to the consumer, which can be as high as 8% of the loan amount. This additional charge is rolled into the principal and is many time lost as the consumer focus is on the monthly payment. If you need to finance a major purchase, review both options and be sure to understand any fees associated with each option.

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