Dollars and Sense: Simple Help with Difficult Debts

Many students use student loans to finance their education. Student loans are a reasonable solution to pay for school. You just need to make sure you understand the repayment requirements before you take on a loan.

The more money you put down, the lower your monthly payments will be and the sooner you can pay off your loan. It's estimated that for every $1,000 you put down, your monthly payment is lowered by $50 a month. In some cases, you have the option not to put anything down. However, if there is no down payment, your monthly car payment will be higher.

Yes. Even if you consolidate your student loans, you can still defer your payments. Standard deferment and forbearance options are core attributes of your student loan and are not lost when you consolidate student loans.

Leases are normally offered in 24, 36, 48 and 60 month increments. However, many leases come with stipulations, such as you can't drive more than a set number of miles each year. If you return the car with more miles than what was agreed upon, you may be required to pay additional fees. Be sure to read the fine print with any auto lease.

Interest rates on auto loans are determined based on the condition of your credit, specifically your credit score. Generally, the higher your credit score, the higher the interest rate you’ll pay. Lenders (including car dealers) use credit scores and their own established rating system to determine APRs for auto loans.

The Federal Perkins Student Loan is a low interest loan for undergraduate and graduate students that demonstrate financial need where the school is the lender. However, the loan comes from government funds. When it comes time to repay the loan, you repay the school, not the government.

Assets are everything a person owns that is worth more than what is owed on it.  This can include physical property like a house or car, as well as intangible property, such as stock options.

Automatic Debit is a withdrawal or debit that occurs each month automatically from your account.  This can also be referred to as automatic payment. Many service providers permit their customers to designate a credit card, or ATM card, or checking account to which monthly payments are automatically charged on a designated date each month.

For credit cards or loans, Average Daily Balance is a method of calculation of your credit balance and interest. It's the practice of crediting your account from the day your payment is received. In other words, it's a daily tracking of what you owe. When calculating the Average Daily Balance, the lender adds the beginning balance for each day in the billing.

The book value of a vehicle is the estimated value of any used automobile in a specific region. These estimates are recorded in appraisal guidebooks (i.e. Black Book, Kelley Blue Book) and provide guidance on the value of a car at any given time.

A buydown is a payment made to a creditor by the borrower to reduce the amount of the borrower's repayments. It is typically larger than the regular monthly payment.

Your personal property that is pledged as security to guarantee repayment on a loan. You forfeit your collateral to your lender, if you default on your payment agreement.

DTI is a formula that compares certain debts you have to your gross income. DTI can be viewed as a 'front-end' or 'back-end' ratio. The front end ratio divides your gross income by the total of your mortgage payment, property taxes, and homeowner's insurance. The 'back-end' ratio additionally accounts for debts like car payments, credit card debts, and court-ordered child support or alimony obligations. DTI is expressed as a percentage, the percentage of your gross income that the debts utilize.

If the borrower fails to make a payment before the due date has passed, the borrower is considered delinquent. If a borrower is delinquent on their loans, they may be charged late fees. If the borrower misses several payments, the loan goes into default.

A student is considered a dependent if they live with parents and the parents provide the student with more than half of their support. Both parents cannot claim the same child as a dependent.

Some service providers only allow customers to designate a checking account for automatic payments. The provider will deduct the amount from your checking account on a designated date each month.

Total amount of money earned before taxes and other deductions are subtracted.

The Lemon Law refers to various state laws that protect consumers against persistently defective automobiles.

MSRP is the manufacturer's recommended selling price for a vehicle and accompanying options.

A revolving account is an account issued with a maximum credit limit that does not have to be paid in full every month. The borrower usually is required to make a minimum monthly payment that is based on the  size of the balance. Most credit cards are examples of revolving accounts.

The simple interest method on payday loans is the process of portioning monthly payday loan payments between interest and principal. It is calculated based on your unpaid principal balance, the interest rate on your cash advance loan, and the number of days since your last payment.

Term is the period agreed upon in which the borrowed loan amount is to be repaid.

Upside down is when the balance owed on a mortgage, vehicle,  or some other type of property is greater than the current value of the property.