Borrowing Considerations
If you are considering borrowing to meet your objectives, you will have to go through a series of steps as part of the borrowing process:
The table below summarizes aspects of different ways you can borrow money.
Source of Funds |
Interest |
Fees |
Availability |
Tax-Deductible Interest |
Risk Factors |
Refinance Home Mortgage |
If market rates are lower than your current rate, consider this option. |
Varies |
Fairly easy |
Generally yes |
Risk of losing home if in default |
Home-Equity |
Typically lower than most other loans |
Low |
Easy |
Generally yes |
Risk of losing home if in default |
401(k) Plan |
Fairly low |
Minimal, if any |
Easy |
Generally no |
Risk of depleting retirement fund |
Margin Loans |
Fairly low |
Minimal, |
Easy |
No, unless money is used to purchase investments |
If market value of collateral declines, you may have to make up the difference in cash |
Life Insurance |
May be low |
Depends on insurance company |
Easy if you have sufficient cash value in your policy |
Generally no |
If loan is not repaid, death benefits will be reduced and interest on unpaid amount will continue to compound. |
Business Loan |
Moderate |
Depends on purpose of loan |
Limited |
Yes |
Business assets may be at risk |
Secured Personal Loan |
High |
Minimal |
Limited |
Generally no |
Collateral at risk |
Unsecured Personal Loan (e.g. credit cards) |
Highest |
Minimal |
Limited |
Generally no |
Temptation to mount up expensive debt quickly |
Relatives or Friends |
Varies |
None |
Limited |
Generally no |
Jeopardize relationships |
First United offices will be closed, Saturday, August 20; to celebrate our employees with a company-wide event.
You may still access First United through our ATM Network, or using Online or Mobile banking.