LOANS » Current Rates, News & Information

If you live in Arizona and are looking forward to taking out a payday loan, you may want to look elsewhere for financial assistance. Beginning July 1, payday lenders will be forced to follow banking procedure by capping their interest rates at 36 percent annually.

This is considerably lower than the rates many payday lenders charge, which is sometimes as high as 460 percent annually. With the cap in place, most payday lenders say they won’t be able to stay in business. Those that do say they will likely shift their focus to auto title loans — which can legally push rates to 204 percent annually (AZ Central).

Starting on July 1, the federal government will be lowering the interest rates for many parent and student loans since it will no longer need to pay banks for making federally-backed education loans. This will make them cheaper to repay in the long run. In addition, they will be easier to obtain since they will be handled through one source, the government.

With colleges sending all federal loan applications straight to the government, they will be processed directly, reducing the steps involved and speeding up the process. (U.S. News and World Report)

Jacob became financially independent at age 30 by reducing his expenses and saving and investing 75% of his paychecks to provide enough passive investment income for the rest of his life. He no longer works for a living. He blogs about how to reach financial independence and many other things on Early Retirement Extreme.

A fully amortizing loan is a loan which is paid in equal installments for a predetermined period of time. Although the last few years have seen a slew of exotic financially engineered loans, the basic kind of fully amortizing loan which people are most familiar with is the fixed rate mortgage that runs for 20 or 30 years.

Some for-profit colleges and universities have come under fire for their questionable practices in relation to students and their loans.

On June 24, Steven Eisman, an investment mogul and hedge fund manager, will testify before Senate, citing that schools are encouraging students to take out student loans while also encouraging them to not pay them back.

Similar to the mortgage crisis where some lenders knew the buyers couldn’t repay their student loans, these schools are being accused of having the students take out loans to get federal money flowing through the schools, knowing that repayment for the students is almost an impossibility (Business Week).

In 2009, some provisions were made to allow students to use money from their 529-plan —  one of the best bank accounts for college because it helps to avoid student loans — to pay for computers and other equipment, as well as have their parents make two changes to investments each year instead of one (this expired in 2009).

However, a college savings bill called the Savings Enhancement for Education in College Act (H.R. 1351) is currently pushing to extend the ability to purchase computers and bring back the ability to make two investments. There’s no word yet on whether the bill is expected to pass. (Market Watch)

Bankruptcy filings are reportedly nearing the record two million that was reached in 2005; however, unlike during that time, many believe that majority of the filings of 2010 are not fraudulent. The bankruptcy filing increase follows a trend of defaults that are also increasing.

According to stats from the S&P/Experian Consumer Credit Default Indices, student loan defaults, home foreclosures and bank card loan defaults all increased in the month of April.

The First Time Home Buyer tax credit may have fueled a considerable jump in home sales for the month of April, auto dealers may slide past rules that would require them to be watched over by consumer financial protection regulators and parents may be able to take advantage of a new private student loan option to help pay for their kids’ college.

New Home Sales Increase Due to Tax Credit

As college becomes more difficult to afford, a new report has found that more students are using credit cards to pay their college tuition. In other financial news, unemployment benefits will expire and other pressing issues will have to wait while the Senate finishes its holiday break and it seems that Goldman Sachs is looking for a new investment customer: you.

More Students Using Credit Cards to Pay Their Tuition

Financial aid is an important part of the college process. Since a higher education is not free, and, in some cases, not cheap, many students rely on assistance to pay for schooling.

Many people voice their concern about how much tuition has increased over the years while aid has decreased, but financial aid has been needed and distributed for centuries now.

If you’re looking to buy a new home, it looks like you’re in luck as almost 75 percent of homes around the country are considered affordable. For those looking for student loans, Wells Fargo and other banks are offering enticing private student loan options and if you need a tax break, why not hire your child?

NAHB Says Almost 75 Percent of Homes are Affordable