After more than two years> of tight lending, banks are loosening their grip, offering more mortgages, student loans and credit cards. In a continuing series, SmartMoney charts the slow return of easier credit, and examines the good deals and the bad.
For the rising number of patients who can't pay their medical bills, doctors and hospitals have a new prescription: a health-specific loan or credit card. But as these medical financing programs grow in popularity, patients may be overlooking cheaper options.
It sounds like a bad commercial for a local car dealership: "These rates are so low, we're barely making money!" But more than three years after the recession threw car sales into a tailspin, many dealers have started offering loans at interest rates so low they don't make much of a profit -- and that's turning conventional car-buying wisdom on its head.
For the last two years , its been nearly impossible for subprime borrowers to qualify for a loan of almost any kind. But that's beginning to change as banks slowly return to lending. First up: credit cards.
After more than two years of tight lending, banks have begun originating more mortgages and wooing choice customers with enticing credit card offers--ushering out the worst days of the credit crunch and marking the slow return of easier credit. Why the change of heart after two years of purse-string tightening? With the economy in better shape in 2010, banks feel more confident to lend--and they're looking for more revenue to fuel their balance sheets, something interest rates and fees on loans and credit cards provide.
After many tight-fisted months, credit-card companies began loosening their purse strings this fall, offering generous perks to attract new customers with good credit. Now, in another sign that they're eager to encourage shoppers to charge anew, the card companies are extending those promo rates and cheap balance transfers to their existing customers.
There is no such thing as free money unless, of course, you want to open a checking account. Several banks have started offering cold, hard cash to get new customers in the door. But hidden in the fine print are fees and rules that will wipe out the windfall.
Until recently, a credit score of 680 was something to be proud of. It meant you paid most of your bills on time, got dinged when you went shopping for a refi, but in general, had a solid enough record to get a loan at the best rates.
Remember those 0% interest-rate credit card offers that lined your mailbox before the credit crunch? They're back and this time they might actually be a good deal.
Getting a private student loan is about to become easier. A new push by private lenders and credit unions to capture some of the college lending market could open more doors for students looking to borrow, but the loans these businesses offer often come with higher price tags and less favorable conditions than those offered by the federal government.