A creditor is any person or business who lends
money. Creditors may be a credit card company, a bank, a pawn
shop or your dad. The important thing to keep in mind is that
not all creditors are the same. The terms, conditions, interest
rates and repayment demands vary greatly from one to another.
Another important point about creditors is that they often
demand collateral
in exchange for the loan. The creditor may also take possession
of the property, vehicle, jewelry or other valuable item if
you fail to keep your repayment commitment. That makes it
vital to know the creditor you’re dealing with. While
there are thousands of companies ready and willing to lend
you money, be certain that you’re working with a reputable
company and that you fully understand the terms and conditions
a particular creditor has assigned to your loan. Don’t
listen only to a commercial that makes claims of “no
down payment, no payment for one year and no points
required.” You may find – after you’ve signed
the paperwork – that you didn’t qualify for those
particular terms.
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