Advice Blog

This chart could have looked like this in 1997 when the IRS on bulletin No.1997-33 required all banks to stop using the
Rule of 78’s of course they continued until 1999 before most of them was able to change this method of calculating interest. I would say the above chart would show in blue how many where using pre-computed loans with the Rule of 78’s rebate.

Advice-loans.net says only ask for Simple interest loans, that is for everything, mortgages, cars, boats anything that you are financing.

Definition of Simple Interest: Under the United States Rule, interest computed only on the principal balance, without compounding. Simple interest computation is the basis of variable rate consumer lending, an also is used widely in mortgage lending. When interest payments on loans are calculated on a simple interest basis, the borrower pays finance charge on the principal balance actually used.

Is precomputed loans made today? Of course, many car dealers small loan companies float your note car lots. There is also loan companies making Precomputed loans with the rule of 78’s rebate, why because it is so profitable and is not govern by the FDIC. Some States such as Louisana has loan laws that allow 36 APR’s. Tennessee small loan companies are allowed a nominal rate of 24% with a 4% on the total note fee, this fee that is non refundable.

Definition of Add-on Interest: A method of calculation interest which involves multiplication of an annual interest factor times the original principal amount of the loan times the term of the loan in years. For example 7% add-on charge on a $1,000.00 dollar loan repayable over 3 years would result in a dollar amount of interest equal to $210.00 (.07 x 1,000.00 x 3). Prior to Truth-in –Lending the example rate would have bee quoted to a borrower as 7% when in fact the  true annual percentage rate is much higher (just a little under 13% APR).

Are add-on interest loans made today? Of course, but not by banks, look for these especially found in the financing of autos.

Definition of Discount Interest: Another method calculating interest by deducting the interest on an annual basis in advanced. Just like the previous example the borrower is quoted “We can give you a 6% discount rate on your loan for 3 years” which will yield that institution around 18%APR.

Are discount loans made today? Of course, actually some banks still are allowed to do this in some states.

We hope you find the reading in Advice-loans.net not only interesting but helpful when you are making important decisions using your money.

Please remember to ask for simple interest when borrowing money!

Jim Williams

1-19-2009

This is the first of our series on student loans. Many students are
accumulating $25,000 and up in student loans. This can lead to serious
financial problems. Our greatest advice to the student is to get the degree.
A giant loan without the degree is a giant waste of money. Deliver
pizzas and study all night. You are young. You can take it.
Think hours and not grades. You’ll be better off with a C average in 16 hours per semester than with a B average in 8 hours per semester. The person interviewing you probably won’t have a high GPA and could care less. It’s the degree that opens the door, not the GPA. Time is of the essence , young person, push yourself!
The loan is much easier to pay back if you graduate.
So get the degree!
School loans are opportunities. Don’t assume the next opportunity train will come by.
Sieze the day!

Enough advice from Grandpa. Get back you ol’ fool! Who said you could post?

Some interesting sites

Six Steps to Financial Aid

Sallie May

Seven Golden Rules to Lower Your Student Loan Debt

Look Twice at Loan Advice from the U.S. News and World Report

Here is a Student Loan Advice Blog. Looks like a good site

Ten Alternative Ways to Cut College Costs from Bankrate.com

Yessiree,
There are indeed bank ratings and your bank is probably there.
Here are a few:

Bankrate.com
The Safe & Sound® ratings system employs a series of 22 tests to measure the capital adequacy, asset quality, profitability and liquidity of each rated financial institution.

Bauerfinancial
Bauerfinancial provides consumers, corporations and non-profits a convenient way of getting status reports on specific banks and credit unions or on groups of institutions.

A.M. Best Company
Best’s Banking Center focuses on the U.S. market, providing online access to bank ratings, data, special reports, methodologies and news on the U.S. banking industry.

The Federal Reserve CRA Rating system
The database here provides ratings information dating back to 1990 for banks examined by the Federal Reserve. Ratings can be reviewed for a particular group of banks or for a single bank.

Living in a high tech world today

· Everyone seems to get caught up in this fast pace high tech world today. Yes, even Grandma and Grandpa with there update to the new digital converter box for there television. After seeing the problems going on with adjustable mortgages and looking at the lending practices for the last 36 years I have came to the understanding that many Americans need help with there money. Dave Ramsey is out there doing a good job helping people dig out of there financial woes and trying to keep them from Foreclosure etc, which is good and only tells me there is plenty need for this advice.

· Some schools are now running a small bank and teaching the kids how to manage accounts for checking and deposits. I believe there should be more training on loans and the explanation of practices by financial institutions in the US. Just look at our market today,

Do you know that if you borrow from a small loan company that your credit score will be lowered on the average by 50 points? You say well I always pay on time, why is this. Normally these folks will loan you money on anything since there return on investment usually is about 29 to 36 APR. When you call us for advice, we will find out your details and stop you from making mistakes like this. We want you to improve your credit, not destroy it for several years.

Our Goals are simple, we look at your existing loan or about to be new loan, before you make a commitment and give you the best advice possible.

Generally we should be able to answer e-mails quickly or be able to look at faxes of contracts. We do not loan money but would be willing to refer you to good lending sources.

We know there was no such thing as and adjustable mortgage before 1970. People borrowed money on simple interest primarily from banks for mortgages and auto/boat loans. As you can see it took 38 years before our country hit the bottom, due to the bad lending practices on mortgages. Our goal is to see that these types of lending practices are abolished. We need Congress to work on moving back to simple interest and making precomputed and add-on interest illegal. We can all help by not using these small loan companies and credit card companies.

You can help. Email us today at sales@advice-loans.net

November 24,2008