Borrowing & credit
Loans, credit cards, credit scores, and paying off debt.
New to money stuff? Start with Money basics, a 10-minute guide.Why this matters
Borrowing can help in a pinch, but the cost adds up fast. Knowing how InterestThe price of borrowing money. You pay interest when you borrow, and you can earn interest when you save.More in the glossary and APRAnnual percentage rate. The yearly cost of borrowing money, including interest and some fees, shown as a percent.More in the glossary work helps you compare offers and avoid loans that cost far more than they seem to.
Lessons
- How interest and APR workWhat borrowing really costs, and how to compare loan offers.2 minute read
- Payday loans and cheaper optionsWhy payday and title loans cost so much, and what to try first.2 minute read
- Paying off more than one debtStay current on minimums, pick an order, and get free help if you need it.2 minute read
Tools
- Loan calculatorSee your monthly payment and what a loan really costs.
- Debt payoff plannerCompare two ways to pay off several debts: avalanche and snowball.
- Payday loan true costSee what a payday or title loan fee really costs, especially if you renew it.
- Credit card minimum payment trapSee how long paying only the minimum takes, and how much a bigger fixed payment saves.
- Buy Now, Pay Later checkerSee your payment schedule and what missing a payment could cost.
- Credit score explainerSee what goes into a credit score, and check how much of your card limits you're using.
Common mistakes
Comparing loans by the monthly payment only.
Instead: Compare the APRAnnual percentage rate. The yearly cost of borrowing money, including interest and some fees, shown as a percent.More in the glossary and the total cost. A smaller payment over a longer time often costs more.
Rolling over a payday loan again and again.
Instead: Look for cheaper options first, like a credit union loan or a payment plan.
Paying only the minimum on credit cards for years.
Instead: Pay a little extra when you can, and focus on one debt at a time.
Avoiding calls from lenders when you're behind.
Instead: Call them first. Ask about a hardship program or a payment plan.
Where to get free help
- Nonprofit credit counseling (NFCC)
A certified credit counselor can go over your budget and debts with you, for free or at low cost.
- Credit union payday alternative loans
Federal credit unions can offer small loans with an APR of 28% or less and an application fee of $20 or less.
- 211
Call or text 2-1-1 for free, private help finding local programs for rent, utilities, food, and other bills.