Borrowing & Debt
Loan costs, APR, terms, credit cards, payments, payoff methods and debt-help red flags.
Borrowing basics: principal, interest, fees and term
The cost of borrowing depends on the amount borrowed, interest rate, fees, payment structure and how long the balance remains outstanding.
APR vs interest rate
Interest rate and annual percentage rate are related but not always identical measures, and legal definitions vary by jurisdiction.
Why loan term changes total cost
A longer loan term can make scheduled payments smaller while keeping the balance outstanding for more time.
Credit card basics
A credit card is revolving credit with a limit, billing cycle, minimum payment rules, interest terms and potentially several kinds of fees.
What minimum payments mean
A minimum payment is the least amount required under an account's terms for a billing period; it is not an estimate of the cheapest way to repay the balance.
Debt payoff methods: snowball, avalanche and simple prioritization
Common payoff methods organize extra payments differently; the best fit depends on balances, rates, cash flow and motivation.
Buy now, pay later basics
Buy now, pay later products split a purchase into scheduled payments, but fees, credit reporting, late-payment rules and dispute rights can vary.
Debt-help red flags
Financial difficulty can make guaranteed debt-relief claims especially attractive, so verify who is offering help and what they are charging.