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You are probably already familiar with loans, whether to buy a car, purchase a home, or pay for education. Although your teens may
not be ready or able to take out their own loans yet, it's critical they learn how applying for and paying off loans responsibly can boost their credit
history — and how overextending themselves can lead to major credit problems later on.
Here are a few key points about loans to cover with your teens:
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Types of loans
There are two basic types of loans: secured and unsecured.
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Interest rate varieties
Lenders make money on loans by charging interest.
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Comparing fixed rate and variable rate loans
Your loan's interest rate type can impact your ability to afford payments, so fully understanding the loan's terms and conditions is vital.
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Loan fees, penalties and other charges
In addition to loan interest, borrowers may also be responsible for other fees and charges that are outlined in the loan agreement and that can
significantly boost the overall loan cost.
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Shopping for loans
Each type of loan has numerous lending options available.
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