In our ongoing series of lending factors that affect interest rates, let’s (finally) talk about credit scores and related risk factors. I say “finally” because to many people, the credit score is the be-all, end-all of borrowing. And it is true that credit scores and related risk factors are important, but not always in the way people think. … Read More »
Easily one of the costliest parts of lending are defaults. In short, lenders look to avoid defaults at all costs, since they can be crippling. Defaults are when borrowers, at some point in the loan’s life, cease making their payments. For this post, the reasons why are immaterial – at the end of the day, all that matters… Read More »
Next up in our series of how lenders arrive at interest rates is looking at the true cost of funds. It could also be entitled “How much does money cost?” because, in essence, that’s exactly what it is. One thing that’s helpful in understanding this is to look at money lending as an investment for the lender. If… Read More »
Happy New Year! We briefly interrupt our “lenders and rates” series to bring you the 2025 version of Fletch Predicts. Another year is in the books. I like doing these posts as it’s fun to look back and see where I was right and wrong. My hit rate isn’t bad at all! Let’s start with sports. I hit… Read More »
Next up in our series on lenders and interest rates, let’s take a look at collateral and how collateral will affect the rate. At the risk of being a bit basic, let’s understand what collateral is – it’s something of value that a borrower puts up to “secure” a loan. And if the borrower defaults, the lender can… Read More »