Cosigning, don't do it!

Don't cosign loans for your parents and don't let them cosign for you! You shouldn't have to anyway, lenders just want to get more people on the hook!

Even if you aren't paying back a loan that your parents took out and that you cosigned or if they aren't paying one back that you took out and they cosigned. IT STILLS SHOWS UP ON BOTH OF YOUR CREDIT REPORTS.

Even if the main endorser is responsible and makes the payments on time, it still shows the loan balance on the consignors credit. Which effects your debt to income ratio and your overall credit score!

Now that is the best case scenario. The worst case is what happens if the primary on the account is late with a payment? Or if they become delinquent? That also shows up on the consignors credit!

So a word to the wise say no to cosigning.

AES Scam Continued - Electronic/Online Payments

Turns out that AES and Sallie Mae decided to put in some extra fine print when you go to make that payment online. You essentially forfeit your right to apply any extra amounts towards the principle! So your ONLY option is to mail in a check with a letter indicating that any extra amount be applied toward the principal.

What a rip off!

AES Repayment Scam - Paid Ahead Status

So when you pay more than your monthly minimum, you are thinking to yourself "I am going to save money by paying my loan off faster by making payments for more than the statement amount". Well thanks to paid ahead status, that assumption is WRONG. Other lenders may call it something different, but most of them have this stipulation in there somewhere.

So what do you do about these chicken f****** rules? Well, you could:

1) Refuse to pay all of your student loans on principle and have them destroy your credit and garnish your wages

2) Refuse to pay all of your student loans on principle and have them destroy your credit and live incognito for the rest of your life

3) Refuse to pay all of your student loans on principle and have them destroy your credit, but move out of the country and laugh at them because they CAN'T garnish your wages. And only move back when you are dead or the government has collapsed.

4) (Most realistic) - Mail in your payments by check and write a letter indicating that you want the extra amounts (make sure you state what amount is extra) to be applied towards the principal, NOT towards future payments. Also feel free to write nasty things in the memo field of your check.

Remember, STAY VIGILANT and check out the back of your student loan bills. This is what mine from AES said, but after research it turns out that Sallie Mae also states something similar.

Paid Ahead Status: When you make a payment that is greater than your monthly installment amount, the payment is credited first to satisfy any outstanding installments due and then any additional amount is applied toward future installments (and is pro-rated across all loans).

Lending Club Investing

Lending Club out performs most investments and at a risk less than traditional investments (not including CDs, Savings Accounts and Money Market). Diversification, however, is the key to maintaining low risk. Never invest large amounts in one loan, split it in $25 increments and you should be fine.

Yes lending is risky, but banks have been lending forever. If you qualify your risk properly you won’t have any problems. I'm currently looking at no defaults and net annualized return of 9.7%. Granted your results may vary, but why not play around with it for a while?

www.lendingclub.com

Credit Card Rate Increases... Fuck!

So I've received credit card rate purchase APR increase notices from:

American Express, Chase, Bank of Nevada, Pentagon Federal Credit Union, WAMU (now owned by Chase), Cabela's Card. All of these rates have increased by at least 5% and simultaneously switched to variable APRs.

All I have to say is, FUCK YOU banks and underwriters of the world. And why not? Fuck the government too! Somehow you have been able to get monies from the government (the government which is paid for by regular people like myself) while simultaneously fucking over your customers with ridiculous and in many cases unjustified (even on a risk basis) changes to your credit relationships. So you weren't happy with the money that you have made historically from encouraging people to swim in debt? You blew all the money you "earned" and didn't put anything aside for when everyone decided to stop paying you the 20% interest because they have no money left? That was poor planning on your part! But wait, who gets caught paying for you being irresponsible? The other customers that are STILL paying you and every person that pays taxes in our country.

Student Loan Repayment Surprise

I just received a letter that my student loans are going into repayment even though last time I checked they weren't going to officially enter into repayment until the end of 2010! Not a big deal because I've been paying them anyway, but now I "have" to pay them. And I don't like being told what to do!

I figured out that the school I was attending provided the loan companies with an "estimated" graduation date. But as soon as I didn't re-enroll they sent out some kind of notice to the loan companies, that recalculated when I actually stopped going to school. So not only is it way sooner than expected, but since they have to back date it, it starts in 30 days!

Again, if you are paying on your loans already, this shouldn't be a big deal, but if you aren't you could end up with a nasty surprise.

Of course if I enrolled in another class they would probably get pushed back again, but I can't think of anything I want to learn! Plus I don't really have the time anyway.

Bank Scoring System

Apparently for businesses (and I assume personal accounts) banks have a scoring system that assists them in determining if you are worth lending to that accompanies your credit score, regular income, etc. This is the bank that you have an existing relationship with. Basically they look at your average daily balance to determine your repayment ability.

So if you have under $999 you are a high 3 (or is it low 3?)

If you are between 1000 and 5000 you have a separate rating

And 5000-10000, another rating (low 5 I think)

Basically for any type of business loan you want to be above 10000 for at least a 3 month period. So even if it means borrowing the money from someone with interest, it would help significantly.