http://en.wikipedia.org/wiki/Subprime_lending
Some in congress are crying for a bailout.
Apparently the lenders as well as the borrowers.
Read the Wiki piece and see if you would go for one of these loans.
Subprime Lending Crisis
Moderators: The People's DJ, David Paleg
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genlock
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Big Media
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This goes back to the whole CashCall crap. It is sometimes too easy to get credit. Look at it this way...
Credit cards offer you a high limit low interest. You run up $5,000 in debt paying 8.5% and you monthly payment is 1.5% of the balance. Out of no where, the bank decides that because you applied for a competitor's credit card, you now deserve to pay 18.9% and you minimum payment should be 2.5% of your balance. Your payment has now (effectively) doubled.
Multiply that by the 3 to 5 credit cards that the average consumer has in her wallet and BAM! your credit card payments go from $225 per month to $375 per month on your $15,000 credit card debt.
So you apply for a second mortgage.
$15,000 at a sub-prime rate of 10.9% over 10 years = $205/month
This puts your payment back to what you were paying before the banks got greedy. However, you fail to cut up those credit cards.
Before long, you have $15,000 in credit card debt AND a second mortgage payment. Your are now paying $580 a month! Congratulations. You're screwed!
Credit cards offer you a high limit low interest. You run up $5,000 in debt paying 8.5% and you monthly payment is 1.5% of the balance. Out of no where, the bank decides that because you applied for a competitor's credit card, you now deserve to pay 18.9% and you minimum payment should be 2.5% of your balance. Your payment has now (effectively) doubled.
Multiply that by the 3 to 5 credit cards that the average consumer has in her wallet and BAM! your credit card payments go from $225 per month to $375 per month on your $15,000 credit card debt.
So you apply for a second mortgage.
$15,000 at a sub-prime rate of 10.9% over 10 years = $205/month
This puts your payment back to what you were paying before the banks got greedy. However, you fail to cut up those credit cards.
Before long, you have $15,000 in credit card debt AND a second mortgage payment. Your are now paying $580 a month! Congratulations. You're screwed!
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Zak Tyler
- Lord of Boobies
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hence the reason i decided to have 2 emergency credit cards. a $500 capital one, and a $6,000 discover (just got that one, was really proud of myself for qualifying for that) both do, and will continue to have, $0 balances for as long as i'm employed 
back in the day (2001) i had "DJ credit" (financed a car from tom peden at 20.9%). last year my credit score was nearly 700...
credit cards are bad n'kay
back in the day (2001) i had "DJ credit" (financed a car from tom peden at 20.9%). last year my credit score was nearly 700... credit cards are bad n'kay
I'm not an idiot, but I play one on the radio.