Am I the only one who sees this as just WRONG?
Savings interest rate at .01%, Inflation estimated at 1.9% - 2.1%, personal loan rate with decent but not spectacular credit 39.9%*, just under 400x the savings interest rate!
Home equity loans about 8% - 15% depending on amount and term.
So unless you have a home to put in hock don't even think of borrowing, and savings now lose about 2% annually.
*Worse than most credit cards!
Trying to come up with funding to put a shop on my property, tired of paying rent that will never be recovered.
Seems Nevada has NO limit on interest rates, so much for the rumor that the Mob no longer runs this state. 
Unsecured personal loans always have terrible interest rates. That's a bottom of the barrel product. But it sounds to me like you need to shop lon providers. Home equity rates right now are in the 3-5% range if you have reasonable credit.
and yeah savings accounts suuuuuck nowadays.
you need a different bank. We just closed an equity loan at prime + 0 and can get personal loans at 7% all day long with good but not great credit.
Yeah, I have too much in the way of funds parked in a savings account right now. I know my dads trick was to park money in CD's, but the rates on those are bad enough to not make sense to lock up money in...
Need to talk to a financial advisor at some point.
In reply to RichardSIA :
I think some of this depends what you mean by "decent credit". These look like "sod off" rates to me unless you were talking to the local monster megabank or the local money laundromat front for the mob. Hard to tell the two apart at times, I know.
I recommend the following:
- Talk to a local credit union - I've got pretty good experience with Greater Nevada CU and am still a member even though we don't live there anymore
- Check bankrate.com and shop around
It's normal that personal (unsecured) loans charge a much higher interest rate as there is no security, but I'm seeing a fair number of pretty decent offers. The other thing is that a lot of lenders have low-ish maximums on personal loans and you may get offers from companies that are willing to lend a lot more - often targeted towards small businesses, and those are murder on the interest rates.
The cheapest is likely a home equity line of credit or home equity loan, depending on how quickly you can pay it off.
In reply to Apexcarver :
Not a financial advisor (I have been rattling around the financial and investment industry for 15-ish years though), however unless you're willing to assume a lot more risk you're pretty much stuck with savings/money market accounts and CD ladders. If the time horizon is much longer you could look into a combo of bond funds and very conservative income funds, but neither of those carries a guarantee you'll get your principal back if things crater even worse.
The CEO's of every major bank should be jailed for their crimes. Just look at the track record of say, Wells Fargo?
But yeah. Credit Union is the answer here. Not great, but better. There's a reason the corrupt mega-banks lobby so hard against them.
Just refinanced my house with cash out at 2.5%, saved a year and $9K over the life of the loan, and paid off the cars which were not all that high anyway. Credit is 760ish right now.
Be creative.
Yeah, Wells Fargo. Turned down my offer of $200,000 to buy out the loan on my practice, then sold it on Craigslist.
They berkeleyed a whole lot of veterinarians.
News link from 2012.
My 10 year bankruptcy is still running.
I took out a personal loan recently to buy the NC...........40%, not even close to that. Although IIRC my credit is north of 800.....maybe that's the problem?
dps214
Reader
5/13/20 10:25 a.m.
Not sure where you're shopping for loans, but....shop somewhere else. Lightstream's rates currently cap out at 16% for home improvement stuff and local banks are usually able to beat them by at least a point or two. Unsecured personal loans are usually approaching double digits even in the best situations.
Side note, I struggle to understand CDs...I haven't seen any lately that outperform the various options for high interest savings accounts. I guess if you have little enough self control that you need an account that forces you to not touch it for several years it makes sense.
Poked around the web to compare rates.
The 400% disparity really got my attention and is beyond greed.
I will start getting my SS in a couple of months, meanwhile I will pay off my only CC to raise my score a few points.
Guess I'm Old, I remember rates of over 5% on regular pass-book savings.
Current savings rates paid are way below inflation.
It seems that when if comes to loans being debt free is a negative, not continually cycling through debt is a negative.
I was not raised in the current "Just Charge It!" culture, I usually pay cash for everything.
I will raise the money somehow, I always do.
RichardSIA said:
Guess I'm Old, I remember rates of over 5% on regular pass-book savings.
What was your mortgage rate back then? I nearly puked when my dad told me his first mortgage was around 20%.
mtn (Forum Supporter) said:
RichardSIA said:
Guess I'm Old, I remember rates of over 5% on regular pass-book savings.
What was your mortgage rate back then? I nearly puked when my dad told me his first mortgage was around 20%.
I've never had a mortgage, paid cash for the house.
Want to add a shop so as to stop paying shop rent and to avoid the boring drive.
The days of 5% savings accounts have been gone for decades. I may have had that in high school in the 1980s, but not since then.
If you don't use your credit, your scores will suck. You have no history of being responsible, therefore you are a higher risk than someone who frequently borrows money and always pays it back.
I don't borrow money, no mortgage, no car note. I do have a couple of credit cards that are seldom used. My credit score is 720 as of yesterday. Not bad, but not great either. The low score is due to lack of credit use. The lower that number, the higher your interest rate.
dps214
Reader
5/13/20 12:17 p.m.
Back during the '09 crash there was a brief moment when interest rates were high and it was possible to get a ~5% savings account. I had one, I think that rate lasted a fwe months or maybe a year until it dropped to 3%, then eventually slid down to around 1%. Pretty sure that was the last time that was possible.
At this point in society there's really no reason to not use credit. Hardly anyone charges extra for credit versus cash, and most every worthwhile card has some kind of rewards/cash back program.
These people are criminals, and yet they still have customers that either don't care or don't know. We should choose to do business with companies that will respect us and act ethically in accordance with the law.
https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-6.html
In reply to 1988RedT2 :
So the entire organization should be punished for the actions of a few employees and officers?
I've been banking with Wells Fargo since they bought out Wachovia, who I dealt with since they bought out South Carolina National.
Call it 45 years. I opened my first passbook savings account at 9 years old. All of my personal and business banking is with them. In that time I've had zero issues that weren't either my fault or solved within 24 hours. They have done their jobs very well. They are more convenient than any of the local banks or credit unions. Their fraud department is unbelievably quick to handle any issues, frequently shutting down cards before fraudulent charges go through and instantly crediting fraudulent charges that do make it through the system without question. I can speak to a rep in under 5 minutes 24 hours a day when needed. And I seldom need one because they have a awesome website that will do everything I need doing.
I will be staying where I am. I'm not throwing out the entire basket for a few bad apples.
Edit to add: I haven't borrowed money from them. Because I don't borrow money. The borrower is slave to the lender and that's not a positing I am willing to put myself in.
"Officers", so leadership.
My response to WF's reported crookedness is to simply avoid doing business with them.
A PITA since they are the only bank in my town.
My real outrage is the wildly extreme spread between saving and loan interest rates industry wide.
Being punished for being frugal also annoys me but I will work around it.
RichardSIA said:
"Officers", so leadership.
Being punished for being frugal also annoys me but I will work around it.
Officers does not inherently mean leadership. I was an officer at a mid-size regional bank. I assure you I was not part of leadership.
As for "Being punished"... Why would they lend to you at a low rate? You have no history. To them, you're a gigantic risk. And if you're not, but you're using an unsecured loan, if they were to make an exception they expose themselves to all sorts of potential litigation as the demographic that is like you "White male". Disparate Impact has gotten banks in huge trouble before.
Really easy to work around it anyways. Set up some sinking funds with small loans, 6 months for $1,000 or something like that. Get a credit card, and charge every single purchase you make. Pay it off daily/weekly/whatever you want to feel comfortable. In 6 months you'll be in good shape. Also, if you have a friend/relative with good credit and a long history, that you trust completely, ask if they would add you as an authorized user to their oldest card. You don't even need to have the card, just being added as an authorized user will give you the credit history of said card for as long as you're on it (the ins and outs of it are different, this is the simplified version to tell).
In reply to RichardSIA :
You aren't being punished for being frugal. You just aren't in their system as a reliable borrower. It would be like a complete stranger knocking on your door and asking to borrow $100.
It's not personal. It's business. They arent punishing you. They are protecting their owners and other customers.
I've been doing the CC thing for a while now, credit is actually over 700 and will be better in a couple of months when I pay off the balance.
Also own a home outright, no auto loans or other debt.
A home equity loan seems the only way to get a semi-reasonable rate. I'm not happy with the idea of giving up being free and clear.
No matter how I go about buying the new shop I will still be outraged at the spread of hundreds of percentage points between interest paid on savings and what is charged for loans.
I'm reliably paying over $700.00 a month for shop rent, that should prove an ability to do half that in monthly payments.
So yes I do still see it as punishing frugality. There was a time that was rewarded, apparently before the Banksters got control.
In reply to Toyman01 (Forum Supporter) :
Yes they should, from the executives who get $100 plus million dollar golden parachutes when they resign to avoid being charged, to the tellers who open the fake accounts to keep their managers numbers up. Wells Fargo as an institution should be shut down, the executive board executed, the managers imprisoned, and the "front line workers" blacklisted from ever working in a banking environment again.
The illegality of what they've done, and been busted for, over just the last 12 years says "too big too fail/jail" doesn't work. And that's only based on things they couldn't keep covered up. God only knows what kind of shady bullE36 M3 they manage to keep out of the press, like their relationships with the Mexican drug cartels.
A fish rots from the head.
