Notice that the interest paid jumps more than 160% higher at 12% than at 9%!
|
If
your credit is:
|
Expected
Interest Rate
|
Your
Payment
|
What it's
costing you
|
|
Perfect Credit
|
7% |
$655.30 |
----------- |
|
Credit
with only
moderate issues
|
9% |
$804.62 |
$50,155.24 |
|
Bad
Credit
|
12% |
$1,028.61 |
$130,791.63 |
|
If your credit is:
|
Expected
Interest Rate
|
Your
Payment
|
What it's
costing you
|
|
Perfect Credit
|
0% |
$333.33 |
$0.00 |
|
Credit with only
moderate
issues
|
10% |
$424.94 |
$5,496.60 |
|
Bad Credit
|
20% |
$529.88 |
$11,793.00 |
It is important to maintain a good credit rating. Your interest payments on loans depends on your credit history. Even credit with only moderately damaging information can seriously impact whether or not you can afford to purchase that new Hybrid you have always wanted.
Let us examine what is possible for you to pay with perfect credit versus with moderately damaged credit or even bad credit. The following figures are based on a $20,000 Hybrid with payments over 60 months.
Copyright 2008 Karuna Financial Logistics Network. The information contained on this site is the property of KFLN or is used by permission from the various companies we represent.
Remember, your interest rates on a car loan can get as high as 30%! You could end up paying over $40,000 for your $20,000 Hybrid!
You are in a situation where you need to borrow money against your house perhaps to send your brilliant child to college so she can become a Nobel Prize winning scientist. Your bad credit can affect even your child's life if it prevents you from being able to send her to college.
Let us examine now what could happen to your mortgage rates with perfect credit versus damaged and bad credit. The following figures are based on a $100,000 mortgage, refinance or equity loan over 30 years. Notice how much money you are losing just by having your interest rate jump by two or three points.
Imagine how much you will save in interest if you have to take out a $200k or $300k loan for that mortgage.
But it goes beyond just loans and loan approval. Consider employment opportunities you may miss out on, higher insurance rates on your home and automobiles and the high interest rates and penalties of credit cards.
You now need to ask yourself if it is worth the cost of credit restoration to save huge amounts of money on your loans, get that job or promotion you have always wanted, send your children to college, lower the interest rates on your credit cards and reduce your insurance payments.
