The debt and loans programs is designed to help individuals learn about loan interest rates, and how to manage and eliminate debt.
Financial Literacy: Beginner’s Debt & Loans:
Purpose & Planning
Loans allow individuals to borrow money for temporary use, typically with interest.
Taking on debt has both benefits and consequences.
Risks of Borrowing:
- Inability to repay
- Credit score damage
- Wage garnishment
- Asset repossession
Responsibilities of Borrowing:
- Learn how leverage is used to control assets.
- Interest and credit score impact
Choosing a Loan:
- Learn key loan terms: collateral, mortgage, risk, interest rate, down payment, equity.
- Understand different types of loans:
- Balloon payment
- Fixed rate
- Variable rate
- Secured vs. unsecured loans
Loan Qualification:
- Loan terms depend on borrower’s financial profile.
- Employment status
- Credit score
- Debt-to-income ratio
- Collateral
- Non-payment affects credit score and future borrowing ability.
Loan Repayment & Management:
- Creditor negotiations
- Bankruptcy
- Short sales
- Foreclosures
- Credit counseling
Financial Literacy: Intermediate Debt & Loans
Purpose & Planning:
- Debt comes in various forms with both benefits and consequences.
- Understand the difference between good debt (e.g., education, mortgage) and bad debt (e.g., high-interest credit cards).
- Debt increases both potential rewards and risks.
Risks of Debt::
- Inability to repay
- Damaged credit score
- Wage garnishment
- Asset repossession
Responsibilities of Borrowing:
- Making timely payments
- Managing interest and credit score impact
Choosing a Loan:
- Learn to recognize predatory lending practices and their long-term financial impact.
- Understand best practices before applying for a loan to make informed decisions.
Loan Qualification:
- Gain knowledge about how lenders assess borrowers.
- Learn steps to prepare for loan qualification.
- Understand consumer protection laws and the rights and responsibilities of buyers and sellers.
Loan Repayment & Management:
- Learn how to create effective repayment plans based on loan type and goals.
- Compare methods of debt payment vs. nonpayment and their effects on financial health.
- Explore debt management strategies to reduce risk and meet financial goals.
Financial Literacy: Advance Loans & Debt
Purpose & Planning:
- Debt can be part of a healthy financial strategy.
- Understand debt’s role in personal financial plans.
- Design a plan that includes or eliminates debt based on risk tolerance.
- Create a realistic plan to manage or get out of debt.
Choosing a Loan:
- Use decision-making tools to evaluate loan options.
- Assess the cost of borrowing.
- Choose loans aligned with financial goals.
- Analyze refinancing or loan modifications.
Loan Qualification:
- Align loan choices with long-term financial goals.
- Compare loan vs. no-loan scenarios.
- Build a personal financial plan to qualify for favorable loan terms.
Loan Repayment & Management:
- Use debt strategically to support financial goals.
- Develop a personalized debt management and reduction plan.
- Create structured repayment plans to maintain financial stability.