Loan Tips 101
Ever wondered how you can get the most from your loan?
Find easy ways to save money on your loan with Belvoir Federal’s
NEW Loan Tips 101 Section.
| Before applying for a loan… |
| Review your credit report to see if there are any negative items which may hinder you from being approved such as a collection, judgment, late payment, high balances on accounts, etc. Having a lower credit score may result in a higher interest rate on the money you borrow. |
| Considering debt consolidation… |
| Talk with a financial coach (Kelli Jo Anthon) to see if this solution makes sense for your situation. You may find that your current repayment plan is working, but simply needs to be fine tuned. Certainly, consolidating high interest debt into a lower interest loan is a smart thing to do, but debt consolidation may affect your credit score and lengthen your repayment term, so be sure to consult a financial coach for your best options. |
| Fixed Rate or Variable Rate – Which is Better For Me? |
| Remember, there is a difference between a “fixed” rate and a “variable” rate loan. When reviewing the type of loan you are applying for, make sure you understand the difference. Fixed implies that the rate will remain the same throughout the term of the loan. Variable implies that the rate can fluctuate throughout the life of the loan. |
| Credit Scores Consist Of… |
| Part of your credit score is based on the length of your credit history. If you are trying to build your credit, it is important to establish a strong repayment history. Lenders like to see a positive history of at least 24 months. While paying down debt is the goal, remember that information is needed to calculate a credit score. |
| Making Additional Payments… |
| When you make additional payments to your loan, the time and money spent on your purchase will be reduced, which will free up more money for savings. It is a good rule of thumb to add a little extra to your monthly payments if possible, even if it is just $5 or $10 here and there. If you receive a bonus, apply it to the balance of your loan. |
| Make Sure To Get Belvoir’s Discounts… |
| You may qualify for a discount when you apply for a loan. If the loan rate you qualify for is 9.15% but you also qualify for a .25% discount for direct deposit, your interest rate would be 8.90%. There are several discounts that Belvoir Federal offers, so be sure and ask about them when applying for a loan. |
| Consider A Shorter Repayment Term… |
| Consider a shorter repayment term (48 months as opposed to 60 months) when you apply for a car loan. This may leave a little bit less in your monthly budget but will save you money in the long term. Remember to be realistic when making this decision to insure all payments will be made on time and in full. |
Educational Examples
A Personal Loan Example Before and After Applying these Loan Tips
| Loan Type | Length | Rate | Amount | Monthly Payment | Total Loan Cost |
| Variable | 36 months | 9.15% | $5,000.00 | $159.35 | $5,736.12 |
| Loan Type | Length | Rate | Amount | Bi-Weekly Payment | Total Loan Cost |
| Variable | 36 months | 8.90% | $5,000.00 | $73.15 | $5,705.70 |
By making biweekly payments and applying the .25% discount, you are saving $30.42!
Auto Loan Example Before and After Applying these Loan Tips
| Loan Type | Length | Rate | Amount | Monthly Payment | Total Loan Cost |
| New Auto | 60 months | 5.24% | $20,000.00 | $379.63 | $22,777.73 |
| Loan Type | Length | Rate | Amount | Bi-Weekly Payment | Total Loan Cost |
| New Auto | 48 months | 5.24% | $20,000.00 | $213.30 | $22,183.07 |
By shortening your repayment term by 12 months and making biweekly payments,
you are saving $594.66 on your loan!
The above information was provided by Belvoir Federal’s Financial Coach Kelli Jo Anthon, AFC, CHC. If you have additional questions, please feel free to contact her at (703) 730-1800 ext. 5303 or email her at [email protected]
How can you get more from your mortgage loan?
Find ways to save money on your current mortgage.
Question: How many payments do you make a month on your mortgage?
Answer (that saves you money): Bi- Weekly Payments
| Bi- Weekly Mortgage payments accelerate the mortgage payoff balance. Instead of making a payment once a month, you are paying half of the mortgage payment bi-weekly. This equates to 13 payments in a yr which saves you money in the long run. |
| What are the benefits to the homeowner? |
| 1. Bi- Weekly payments reduces the principal balance and builds equity faster. |
| 2. Convenience payments are automatically withdrawn from your account. |
| 3. Mortgage term can foreseeably be reduced by 6-8 yrs (or thousands of dollars) depending on the initial loan amount and rate (30 yr loan). |
If you have any questions, please feel free to contact Belvoir Federal’s mortgage representatives at 703.425.1204 or 800.231.8855. You can also email the mortgage department here.
Discounts and Rewards on Loans Offered By Belvoir Federal
| Loan Loyalty Discount |
| Members can receive a 0.25% rate discount on a fixed-rate loan, if they currently have at least one loan with Belvoir Federal. Other discounts and rewards can be used in conjunction with this rate discount as long as the final rate does not drop below the floor rate. The discount does not apply to real estate loans. |
| Direct Deposit Discount |
| Members can receive a 0.25% rate discount on a fixed rate auto loan if they have a full direct deposit coming into one of their Belvoir Federal accounts. A share draft account must be open as well. The discount can be applied as long as the final rate does not drop below the floor rate. |
| Happy Birthday Discount |
| Throughout a member’s birthday month, members are eligible to receive a 0.30% rate discount on a fixed-rate loan if it is approved and disbursed throughout the member’s birthday month. Only one loan per member. Not applicable on promotions or real estate loans. The discount can be applied as long as the final rate does not drop below the floor rate. |