Borrow only what you can repay
Start with the smallest amount that solves the need. Build the payment into a realistic budget that includes housing, food, insurance, taxes, and other debts.
Compare APR and total cost
APR helps compare the annualized cost of credit. Also compare the finance charge, amount received after fees, monthly payment, total of payments, and repayment term. A lower payment over a longer period can cost more overall.
Read every disclosure
Review the Truth in Lending disclosure, promissory note, payment authorization, privacy notice, and any optional-product disclosures. Save copies before accepting.
Watch for warning signs
- Pressure to act immediately
- Requests for gift cards, cryptocurrency, or an upfront payment to “release” funds
- Guaranteed approval claims
- Contact from an unverified company or domain
- Terms that differ from the written agreement
Consider alternatives
Depending on the need, alternatives may include negotiating a bill, requesting a payment plan, using savings, seeking help from family, contacting a nonprofit credit counselor, exploring a credit-union product, or postponing a discretionary expense.
If you may miss a payment
Contact the provider before the due date. Ask about hardship options, payment plans, deferment, or other available assistance. Do not ignore collection communications.
Credit and privacy
Understand whether a provider will make a soft or hard credit inquiry and how information will be used. Use secure devices and verify the site before entering sensitive data.