Borrow Wisely

Use debt only for items that have the potential to increase in value, such as a home, college education, or home remodeling. Avoid incurring debt on items like clothing, vacations, or other luxuries.

Consider a shorter term when applying for loans. Even though your monthly payment will be higher, you will incur much less interest.

Make as large a down payment as you can afford. If you can make prepayments without incurring a penalty, this can also significantly reduce the total interest paid.

Consolidate high-interest-rate debts with lower-rate options. It is typically fairly easy to transfer balances from higher rate to lower rate credit cards. Another option is to obtain a home-equity loan to pay off consumer debt.

Compare loan terms with several lenders, since interest rates can vary significantly. Negotiate with the lender. Review all your debt periodically to find less-expensive options.

Review your credit report before applying for a loan, so you have an opportunity to correct any errors.