Types of credit
Credit Card
Features: Some can be used anywhere - No payoff deadline - Monthly Min Payments Vary - Has highest rate |
Installment Loan
Features: Used for large purchases - term can vary from a few months to years - Monthly payments set for life of loan - Lower interest rate than credit card |
Student Loan
Features: Used for tuition/college - some let you delay payments until you've graduated - usually term is 10 years - Monthly payments set annually, when interest rates are adjusted - lower interest rate than installment loan - may provide income tax break on interest paid to lender |
Mortgage
Features: Specifically loan to purchase home - repaid over 15-30yrs - Monthly payments may be set for life or changed frequently - lower rate than installment loan - may provide income tax break |