| The costs of bad credit
As with any other personal loan, the interest rate you get largely depends on your personal circumstances. However, with this particular type of loan, the single most important factor in determining the rate you get is your credit history. A poor credit rating means that the interest rate you will pay will be markedly higher than with other unsecured personal loans. As most bad credit loans are likely to be variable rate deals, you should be aware that your loan repayments will change in line with interest rates. Click here for more on fixed and variable rates. If you intend to pay your bad credit loan off early then make sure that you know what the early redemption penalties (if any) are. Remember: if you want to repair your credit rating over time then you need to make every payment on any loan you are given.
RBA Reassuring on Banks
Within a month, four of the Big Five banks will produce interim earnings while the Bank of Queensland trots out its figures in the middle of next week.The ANZ, St George, National and Westpac will all produce solid profit performances in the first half of the 2007 financial year and analysts are generally agreed that the main points to be watched will be the level of bad and doubtful debts in housing mortgages and personal, such as credit cards.And while there were fears there could be an upsurge in the level of dodgy loans and actual losses, it is now becoming clear from the APRA and Reserve Bank data, plus the RBA's financial stability statement on Monday that much of that concern was misplaced.In fact the RBA's comments on the banks and the banking system should be read by all bank shareholders: unless the RBA has made a horrible error, it's clear there are no black holes in bank balance sheets.Perhaps the most interesting area to watch is the implicit warning about the contraction of lending margins on housing mortgages because of low demand and high levels of competition.The RBA points out that there are hardly any mortgages being sold where the borrower is paying the bank headline adjustable or fixed rate, such is the intensity of competition.Banks' share prices have increased by around 14 per cent over the past six months, slightly underperforming the broader market.
Banks warned against giving big unsecured loans
Dubai: The Chief of Dubai Police has warned five banks they will be named and shamed if they do not stop giving loans without guarantees and through big enticements, as many people have got into trouble for failing to pay off their debts. Lieutenant General Dahi Khalfan Tamim said he will personally adopt a resistance movement against those banks which are also listed on Dubai Police's blacklist. He pointed out that 60 per cent of cases of bounced cheques or inability to pay back debts come from those banks. Their cases amount to 70 per cent of the total cases. Luxury items The warning came during an open discussion on the security of bank loans yesterday in which bank representatives, legal experts and economy experts took part. Dr Mohammad Murad, Director of Dubai Police's Decision Support Centre, pointed out that banks should contribute 50 per cent of the expenditure of inmates jailed for bank-related cases, as the cost of one inmate amounts to the cost of a person staying in a five-star hotel.
Fraud scheme piques mortgage broker's interest
DEAR BOB: I am a mortgage broker. One of my borrowers owns two properties. The first one is his primary residence. The other is a rental house. He intends to refinance and take maximum cash out from the investment property. Since he can't afford to make mortgage payments on both properties, he plans to default on the rental house by foreclosure. Is this a good or bad idea? What happens to the cash he gets from the refinance? --Julie H. DEAR JULIE: Can you spell f-r-a-u-d? If you knowingly participate in that fraudulent scheme, as a mortgage lender, you should lose your job and mortgage broker's license. Purchase Bob Bruss reports online. The borrower's credit will be ruined by the foreclosure and your reputation will be badly tarnished for participating because you knew he planned to default.
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