If you are seeking a loan, make sure your credit history is in good standing before seeking a lender. This way you will be assured to receive the most options and favorable terms for your loan. Once you have confirmed your own financial profile is strong, it will be time to conduct some due diligence about your potential lender.

Here are five questions to ask your lender before committing to a loan. There may be additional questions you have pertaining to your specific situation but these questions will get you started in the right direction:

What Is the Loan Requirements/Process?

Before you start completing paperwork, it is important to contact a few lenders to see your options before committing to a loan. You should inquire about the lending requirements they have set including minimum credit score and income amounts. You should also ask about the loan process so you’ll have sufficient expectations for getting your money.

How Is the Interest Payment Calculated?

When you secure a loan, it is vital to understand the interest rate you will be paying back. If you aren’t careful, you can end up paying more in interest than you do on the actual loan. This is especially true with mortgages. Your interest rate will be determined mostly based on your credit history but you need to be sure you ask the lender how the interest will be calculated. Not all lenders use the same calculation and what you don now can hurt you financially

How Does the Repayment Play Out?

When you take out a loan, be assured it must be paid back. How you pay it back is an important consideration. You’ll need to confirm how much is due each month and how long the term of the loan stands. Some lenders will require a direct payment from your bank account while others will allow checks or online payments. Be sure you know your due date, the length of grace periods before a payment is considered late, and if you are allowed to repay your loan early. Some lenders impose penalties for early payoffs because they lose out on interest.

Is Activity Reported to the Credit Bureaus?

Not all lenders will report back to the credit bureaus with your repayment activity so it is in your best interest to ask first. When a lender reports prompt payment information to the credit reporting bureaus, it keeps your credit record up to date and can improve your credit score provided you keep up the prompt payments.

What Happens if I Skip a Payment?

While no one expects financial hardships to come, they often do happen from time to time. If you are having trouble making your loan payment during a month or for a longer stretch of time, you’ll need to know what happens if you go delinquent on your account. You’ll need to understand the consequences as well as the fees associated with late or missed payments.

5 Pieces of Information You’ll Want from Your Lender was created by and is property of American Consumer News.

• Rate increases prohibited- Credit card companies are no longer allowed to increase your interest rate within the first year of opening an account. Consumers who already have an existing balance will also be protected from rate increases on the current balance. It is important to note that credit card issuers can raise your interest rate if it is part of an introductory offer that expires or if you are 60 days late paying your bill. Anyone with a variable indexed interest rate may also see changes in their interest rate. Credit card companies are required to give 45 days notice for interest rate changes that occur under normal circumstances.
• Universal default- In the past, your credit card company reserved the right to increase your interest rate if you were delinquent on other bills, even if you were current with the credit card account in question. That is no longer allowed.
• Over-the-limit restrictions- Over-the-limit fees are a big problem for many consumers, especially those who were unaware a purchase would put them over-the-limit. Under new regulations, credit card issuers must get approval from the card holder in order to honor over-the-limit transactions. Without this approval your transaction will be denied if it puts your account over-the-limit, therefore eliminating over-the-limit fees.
• Co-signer needed for individuals under 21 years of age- If you are under 21 years of age, you will be required to have a co-signer before a credit card can be issued in your name. If you are able to provide proof of your ability to meet payments you might be able to open an account without a co-signer. This restriction will make it more difficult for college students and others under 21 to rack up high debt balances which they cannot reasonably repay.

These changes are designed to make it easier for credit card holders to manage their account . It is still, however the responsibility of each consumer to understand the terms and conditions on individual accounts. Managing your credit responsibly is very important to avoid high interest debt that can make it impossible to reach other financial goals.

Credit Card Changes Go Into Effect Today was created by and is property of American Consumer News.

The bank tax as it is being called will be levied only on the largest financial corporations, defined as those with combined assets across all their controlling interests that amount to more than $50 billion. When this is taken into consideration, the statistics reveal that the majority of the tax revenue (about 60%) will come from the top 10 largest firms.

The Opposition to the Tax.

Of course a tax of this nature is bound to draw severe criticism from those likely to be affected by it. The banks argue that they have in fact already repaid the sums borrowed under the TARP (Troubled Asset Relief Program) and point the finger at the car industry which continues to struggle to keep its business intact.

In fact there seemed to be a mad rush to repay those TARP funds that the financial industry so desperately needed only a short time ago. The major players J.P. Morgan Chase, Wells Fargo, Citigroup, Morgan Stanley and Bank of America were all trying to rush each other to the head of the line in December 2009 to repay the money owed and all this a whopping two years ahead of the deadline.

The logical question to ask is “why was the TARP money repaid early?” The only answer that makes sense seems to be because it would look bad if banking executives continued to be paid millions in bonuses while the debt was outstanding.

What Does This Mean for Consumers?

The American consumer must take those facts into consideration and try to make sense of them. The banks are angry about the Financial Responsibility Fee that came as a result of their bonus payments and they warn that the tax can be passed on to consumers in the form of lower interest on deposits, higher interest on loans and higher or additional fees. The government counters this argument by highlighting that that tax will only be levied on the largest of the banks so taking this route would only make them less competitive.

The affected banks are in talks to pursue legal action against the tax and simply will not take it lying down.

In the meantime the consumer should be on the lookout for sneaky increases and cut backs on services that were once free. Shopping around for the best rate and price will continue to be the best way to save money in the future.

Who Will Pay President Obama’s Bank Tax? was created by and is property of American Consumer News.

This upward swing in new home sales could be a sign that consumers are feeling more confident in the economy as we move forward post recession. Another reason more people may be buying both new and existing homes is the extension of the first time home buyers credit. First-time home buyers are eligible for a maximum tax credit of $8,000 that does not have to repaid for the calendar years 2009-2010. For those who qualify, this tax credit is a good reason to buy a home now versus later.

Another incentive for people to get out there and purchase a new or existing home would be the low mortgage rates that are currently available. Back in 1991 Freddie Mac began keeping track of weekly interest rates and how they fluctuated. Fifteen-year mortgage rates have hit 4.29 percent in November, the lowest in 18 years. The same is true for 30 year mortgage rates, which came in at 4.78 percent which equals the lowest rate since 1971. What this means for potential home owners is lower mortgage payments which in turn increases the number of people who will qualify for a mortgage.

If you are thinking about purchasing a home, now might be a good time to make your move. It is important the everyone, especially first time home buyers goes into the experience knowing what to expect. Financial lingo and mortgage terms can quickly become confusing or overwhelming to a person unfamiliar with the process. Before signing on the bottom line consider the following tips:

• Become familiar with loan types and basic language used in the mortgage process- You can’t make a smart decision without all the facts. If you don’t know what your lender is talking about, you are at a distinct disadvantage going into this arrangement.

• Understand the process- Buying a home can be a complicated and drawn out procedure fraught with obstacles many home buyers never anticipate. Similar to understanding loan types, it is equally important to educate yourself on the entire home buying process. Know the roles of your real estate agent, loan officer, loan processor and anyone else involved in the purchase. You should also have a solid understanding of your own role and responsibilities as a borrower and home buyer.

• Buy what you can afford- There is a difference between what you are qualified to borrow and what you can afford to spend. Consider the impact on your budget carefully before buying a home that will limit your ability to live comfortably and reach other financial goals.

If buying a home wasn’t on your to-do list before you might want to wait until the time is right for you and your family. Conversely, anyone who was previously contemplating becoming a home owner might just find enough incentives in the current market to take the next big step. Whatever your position, buying a home is a serious investment and one that should be not be taken lightly regardless of what everyone else is doing.

Home Sales Are On The Rise was created by and is property of American Consumer News.

Lawmakers have been sending letters to the credit card companies asking them to freeze rates until new changes take effect, because congress is reconsidering whether to move the new law changes up to December of this year. Bank of America and Discover were the first to agree, other have been rushing in before the new law takes effect. Those that aren’t in agreement with the freeze cite the change in the economic climate and the fact that they are getting what is owed to them.

Even those with good credit and no record of missed payments report their monthly payment amount has doubled. Now is a good time to wean ourselves from the credit trap. Not to say it’s an easy task in this increasingly cash free society. It’s difficult to buy big-ticket items without having to save for a long time and tempting when “easy financing” is available for things like homes, and appliances or cars.

Sometimes life’s little emergencies get in the way. The furnace breaks, or the water heater bursts, or the transmission on the car goes out. It is possible, however, to live a more cash only life. In fact it seems to be a coming trend, with more people willing to give it a try.

Consumers are already skittish, with the rising tide of unemployment and growing foreclosures and unprecedented jump in credit card defaults. It’s a wise decision to put the brakes on spending that they can’t afford. While many consumers are putting themselves on a cash only diet others are being forced by financial institutions and lenders. Credit card companies are reducing spending limits and in some cases even revoking lines of credit.

Debit cards that won’t accept transactions larger than the amount of cash available in the consumer’s account are being used more often. As are alternative forms of payment like Ebillme and PayPal. People seem to spend less when a credit card isn’t available to them. Cash limits spending ability.

The shift from credit toward cash and cash-like options shows a clear desire by the consumer to take control of his finances. Consumer credit card use has dropped significantly, while households have increased their savings up to 2% of disposable income. A healthy sign to be sure. It is important to remember that not all credit card use is bad. One can build a good credit history, which in turn makes it easier to rent an apartment, buy a home or finance a car. Then there are the mileage, hotel, travel and other perks that credit card companies offer. That’s makes it hard to resist the trap of living beyond your means. Sooner or later though the bills come, debts have to be paid. Changing spending habits can be a challenge but well worth the effort to avoid paying the price of having high interest debt.

Consumers Choose Cash Over Credit was created by and is property of American Consumer News.

Bank of America was the first company to agree to the rate freeze and Discover just recently agreed to do the same. However, not all companies are jumping on board. Several companies have been rushing in before the new consumer law goes into effect. Those companies that are not in agreement with the freeze cite the changes are due to the economic climate and are only interested in getting back the money owed to them. Consumers with good credit and no record of a missed payment on their account have reported that their monthly payment amount has doubled. The credit card company Chase changed the minimum payment amount for more than one million cardholders as recently as the month of August, seeking more money being paid toward the owed principal. These changes in the industry have made many credit cards unaffordable to consumer and have resulted in a number of bankruptcies. Chase does not have any plans to put a rate freeze into effect before the new law changes. Other banks, like Wells Fargo, also plan to hike the interest rate on credit cards.

Many critics say that credit card companies are out to get as much money as possible before the new law makes it too difficult to make changes. However, those in the industry contend that missed payments and spending over the credit limit by consumers have left them in a bind. There is also concern that if Congress should vote to move the date for the new law to go into effect in December of this year instead of February, there would not be sufficient time to update computers and be sure they are in compliance with the new laws.

Lawmakers have asked the Federal Reserve to start collecting information on current credit card practices so they could effectively monitor the changes after the new law takes place and be sure all are in compliance. Basic information such as credit card terms, the actual cost of credit for the consumer, and how much credit is available has never before been collected in a systematic way.

Consumers who have a credit card outside of Discover and Bank of America are encouraged to stay on top of their monthly statements and continue to analyze them for any changes that are being made. Budgeting for a higher credit card payment may be a good idea even if an increase does not go into effect in order to pay the card off faster. Even consumers who have an excellent credit and payment history with a card company may be subjected to rate hikes, penalties, and doubled monthly minimum payments.

Credit Card Companies Hiking Rates Before 2010 Changes was created by and is property of American Consumer News.

In an effort to get more gas guzzling automobiles off of the highway, banks and credit unions are focusing on environmentally sound vehicle loans and offering much lower interest rates for full-efficient or hybrid vehicles than they are for less environmentally-friendly vehicles. While there has always been some consistent lenders who have been offering better green auto loans for many years, it seems the growing trend for lenders is to improve on the rates for the greener vehicles. As the green vehicle choices also continue to grow, many more lenders are jumping on board to follow suit.

Qualifications Are Many
In order to qualify for a green loan, many lenders will require that the vehicle of choice must be certified as green by the Environmental Protection Agency. Once certification has been established, lenders will learn of their decreased rate of interest. Banks benefit from the offer because according to research, statistics show that customers who purchase fuel efficient cars have also are more consistent in meeting their payment obligations than other groups of borrowers. Less defaults mean more profit for the bank or credit union.

Longevity Of Loans
While it is still early in the game when it comes to green loans, it seems it is a promotional deal that will carry on for some time. More up and coming drivers may have a tendency to be more environmentally conscious than perhaps their parents are, meaning future sales of environmentally friendly vehicles are likely to climb within the next generation. Even with the current generation, sales records show that despite the slump in auto sales (until the Cash for Clunkers program was introduced) in the last two years, sales of hybrids have overall remained strong. People who experienced the personal financial negatives during the recession are also likely to stick with the vehicles that will save them money over the long term since gas prices have been once again rising.

Hunting a Green Loan
Finding a green loan will take some effort on your part. Amongst financial institutions, there is a difference between what constitutes a green vehicle. Some lenders will only consider the deal with hybrids while others rely on the information provided by the Environmental Protection Agency. The personal research will require that you contact several lenders to find out their policies on “green loans”. Not every lender offers the same discounts or the same criteria so it pays to ask specific questions about what kinds of vehicles qualify and in turn if that kind of vehicle meets your own financial needs.

Clunkers Are Out, Green Is Still In was created by and is property of American Consumer News.