Smart Borrower Blog

Archive for October, 2009

Credit Card Companies Continue to Raise Rates, Lawmakers Shocked

So, remember that new credit card law that will go into effect next February? The law is an attempt to curb credit card issuer so-called abuses and protect consumers from steep rate hikes. Well, not surprisingly credit card issuers are not happy about the upcoming restrictions on their business practices. But since the law, which will prohibit them from raising interest rates on anyone except those who are more than two months late on their payments, doesn’t go into effect until February 22, these companies are continuing with their same practices and raising rates even higher than they previously had... more »

Plans to Acquire a Small Business Loan May Still Need to Wait

If you were hoping that the news of the improving recession means it is getting easier to acquire a small business loan, you likely will have to wait a bit longer. News from Reuters today says that according to PayNet Inc, the number of small business loans that have gone into default, or are behind 180 days or more, increased between August and September. According to Reuters reporter James B. Kelleher, in September, .85 percent of business loans had fallen into default, up from .81 percent in August. There is good news, however, in that the number of small businesses... more »

New Association Aims to Combat Loan Modification Scams

NeighborWorks America, a non-profit created by Congress, has launched a national public education campaign aimed at helping homeowners, particularly those facing foreclosure, avoid mortgage modification scams. Their recently launched website, www.loanscamalert.org, provides information and resources to help spot scams, as well provides a central place to notify authorities of scams they may have encountered. In addition to the website, the campaign will draw on the support of public agencies at all levels of government as well as other financial institutions and non-profits to get the word out. According to their press release: The national foreclosure rate has reached an all-time... more »

Obama Promises More Help for Small Businesses

President Obama is not happy with the nation’s banks. They have been too stingy in lending money to small businesses in the past year, he says. The Federal Reserve backs up his statements, reporting that total loans from banks are down $476 billion since December 2008 and commercial and industrial loans are down $204 billion. Now Obama has a new plan to jump start more lending. Why more help is needed: President Obama in a statement Wednesday - “Small businesses have always formed the backbone of the American economy. The problem is, our small businesses have been some of the... more »

Ten Percent of Community College Students Do Not Have Access to Federal Student Loans

According to the Project on Student Debt, there are about 900,000 students at community colleges in 31 states who do not have access to federal student loans because their colleges do not participate in federal loan programs. What’s more, 362,000 community college students (2 out of 3 students) who do have access to federal loan programs took out private student loans during the 2007-2008 school year, instead of using the more affordable and safer federal student loan options. This decision to fund education with private student loans may be due to deceptive marketing practices of some private lenders, as well... more »

Recession Touches the Wealthy - Lamborghini Now Offers Financing

The recession (which is supposedly over) has made its way all the way to the top. Even luxury sports car company Lamborghini has started to offer payment plans for two of its “most exclusive” cars, the Murcielafo LP640 Coupe and the Roadster, which retail at $345,000 and $382,400 respectively. Here’s how the auto loans work, according to Kicking Tires : “The offers include 5.9% for a 12-year term. Yes, 12 years. If you have really good credit, including a credit score of more than 740, you can get 0% financing for 60 months. That comes out to $5,310 a month... more »

Some May Avoid Foreclosure with Loan Modification

Thousands of people have recently been facilitated with the process of home loan modification during this recession. Recipients are able to repay their loan amount as they’re able, which protects them from ruining their credit and allows them to remain in their homes. Dealing with everyday living expenses and mortgage payments at the same time can become overwhelming and complicated. A majority of people are unaware of the details concerning the numerous qualifications for home loan modification. Don’t be discouraged to apply, even if you have bad credit, because there are many ways to get approval for a home loan... more »

Consumers and Banks Continue to Reign in the Credit

For the seventh month in a row, outstanding consumer credit declined in August, according to a recent Federal Reserve report. Total credit debt dropped 5.8 percent to $2.463 trillion dollars , signaling continued caution on the part of consumers and perhaps continued reluctance on the part of lenders to make credit available. The seven month declining streak is a record not seen since 1991 and consumer credit has never contracted for eight straight months in the history of the survey, dating back to 1943. Revolving credit, including credit card debt, fell to $899.4 billion in August, a 13.1 percent drop... more »

Student Aid and Fiscal Responsibility Act Ends Government-Backed Private Student Loans

In the past, the federal government guaranteed student loans that were financed by private lenders. Recently, the U.S. House approved a money-saving move that will stop guaranteeing private lender loans and replace them with student loans that are financed through Treasury funds and that are therefore less expensive. This will save the government an estimated $80 billion over a 10 year period. How will the government use the $80 bill in savings? The savings are meant to provide larger grants and more grants to lower-income students for their college expenses, and to increase federal aid available to community college students.... more »