Borrowing Basics

Benefits and Tips for Consolidating Your Debt - Early Spring 2014


If your debt is piling up, combining what you owe into one manageable payment may be a good option. Reducing debt is a great step towards financial stability. Before beginning the process, you should check your credit report and correct any potential errors to ensure your credit history is accurate when you apply for a consolidation loan.

Juggling multiple monthly payments can be a challenge. Consolidating your debt offers the following benefits:

  • Receive financial advice from a financial expert
  • Ability to focus on one manageable payment
  • Avoid potential late charges or fees from individual creditors
  • Eliminate confusion of the different repayment terms and payment amounts from multiple credit lines
  • Begin to get your budget and spending habits back on track to eliminate debt and reduce future debt

If you’ve decided consolidation is the best route to go to get your monthly payments under control, you should look for a flexible, low-interest loan that fits your individual needs. Taking out a home equity loan is a common way to consolidate your high-interest debt into one low monthly payment by using your home as collateral. Ensure you are comfortable with the monthly payment and confident that you will be able to pay the amount for the duration of the loan.

If you don’t own a home or have equity in your home, another option is to take out a personal debt consolidation loan. No collateral is required and you should look for a flexible loan with a fixed interest rate that allows you to pay off the loan early with no penalty charge.

First National Bank offers home equity loans and personal debt consolidation loans to help get you on the path to financial success. Managing your debt and continuing to make your consolidation monthly payment on time until the loan is paid off will lead to a more secure future for you and your family. Learn more about lending options from First National Bank.

Tips for Managing & Improving your Credit Score - Winter 2013

Whether you are considering a big purchase in the coming year or just want to ensure a secure financial future, it’s important to protect and manage your credit score. Use the following tips, including obtaining your credit score once a year, not canceling existing credit lines, carrying low balances, and tracking credit card purchases.

  • Monitor your credit score: Good financial health starts by knowing where you stand. This is why it’s important to monitor your credit report at least once per year to take control of your financial future, as well as safeguard against identity theft. First National Southwest credit card holders can now keep tabs on their FICO® credit score for free. Just by logging in every month you can view your credit score online 24/7, discover what key factors have affected your score, and find out what you can do to strengthen your financial heath. To learn more, visit www.fnsouthwest.com/fico
  • Do not cancel existing credit lines: You benefit from a long credit history, which is why it is important not to cancel any existing credit lines. Lenders also take a look at the ratio between the balances on your existing credit lines and your total available credit limit, so closing a credit line could negatively impact that ratio, causing your credit score to drop.
  • Pay your monthly balance in full: It is in your best interest to pay off your credit balance each month in order to maintain or improve your credit score. If you are unable to pay off the entire balance, always make your payment on time and always try to pay more than the minimum payments to limit your interest charges.
  • Reduce your overall debt: Eliminating your debt is the most effective way to improve your credit score. Pay off your accounts with the highest interest first and maintain at least minimum payments on your other accounts. To calculate how much it will take to pay off what you owe, visit First National Bank Southwest’s online calculators.

For those who are not First National Southwest credit card holders, the Fair Credit Reporting Act (FCRA) allows you to obtain a free copy of your credit report every 12 months from each credit reporting company, including Experian, TransUnion and Equifax. You can request yours today at www.annualcreditreport.com.

Remodel on a Budget - Fall 2013

If you have plans to remain in your current home but still want to make improvements, you most likely have a budget you will want to stick to. The following tips will help you stick to that budget while still remodeling a space that your family will enjoy for years to come.

Getting Started

  • Determine what you can do yourself vs. contracting out. Major electrical, plumbing and structural work should be left to the professionals, but installing a simple tile backsplash or changing out a light fixture yourself can save you money.
  • If hiring a professional contractor, find someone who is familiar with the building codes in your area, as updating work that does not pass inspection can be costly. Also, ensure your contract includes the entire scope of your project to avoid unexpected expenses during the remodel.
  • Plan ahead by choosing everything you want to include in your new room design to prevent impulsive, expensive decisions later during the process.

Be Creative

  • Avoid structural changes if possible, and instead revamp the room through paint or other cosmetic changes.
  • During the remodel, look for inexpensive ways to achieve the look you want. Install crown molding and window and door trim accents to give the room a finished look. Swap out doorknobs, handles and hinges to upgrade older doors or windows instead of replacing them.
  • Upgrade instead of replace. Refinish your existing hardwood floors instead of laying new flooring. Paint your cabinets instead of building custom ones. Small, less expensive renovations can provide satisfying results if you give them a try.
  • Choose simple, classic designs to eliminate the need for another remodel a few years later.

Add Finishing Touches

  • Shop secondhand stores or estate sales to find quality and affordable furniture for your remodeled room. Look for pieces with solid construction and classic lines you can reupholster or refinish to make your own and to match the style of your space.
  • Add color to your room through rugs, art and a variety of throw pillows. This is an inexpensive and flexible way to change the tone and mood of a room.

When financing your remodel, consider utilizing the equity in your home. This may provide the perfect opportunity to make improvements and increase the value of your home. Contact First National today to learn more about our home equity loans, with competitive interest rates, payment terms to meet your needs and online access to view account information and make payments.