| What Do Interest Rate Hikes Mean For Your Mortgage?
If you've picked up a newspaper or caught the news recently, you've probably encountered a story about mortgage rates and the Federal Reserve banking system. Like many borrowers, you might wonder how the Fed determines interest rates and how - in the event of a rate hike - your personal finances could be affected. Here's a quick overview: Banks, credit unions, and other lending institutions borrow money from Fed banks. Since they borrow these funds on a short-term basis, the institutions are charged at a discount rate that is set by the Federal Reserve Board. This discount rate has a direct effect on the "Prime Interest Rate," the rate banks charge their top-rated commercial customers for short-term loans. .
Is debt killing you? Banks begin to offer a helpline
MUMBAI: Anand Sharma (name changed) was in complete mess after having spent around Rs 1.5 lakh on expensive restaurants, pubs and branded clothes. Lured by easy finance, he had borrowed heavily from different banks through credit cards and personal loans. But, as he discovered later, borrowing was the easier part. On a salary of Rs 10,000 per month, it was next to impossible for him to repay the loan. His wife Malini (name changed) didnt have a clue to what was happening. She was busy mothering their three-year-old kid and managing the house. But the day she discovered her husband fretting about his bills and excess debt, she decided enough was enough. Malini had heard from a friend about a debt counselling centre by the name of Abhay and decided to go there for help.
Banks warned against giving big unsecured loans
Dubai: The Chief of Dubai Police has warned five banks they will be named and shamed if they do not stop giving loans without guarantees and through big enticements, as many people have got into trouble for failing to pay off their debts. Lieutenant General Dahi Khalfan Tamim said he will personally adopt a resistance movement against those banks which are also listed on Dubai Police's blacklist. He pointed out that 60 per cent of cases of bounced cheques or inability to pay back debts come from those banks. Their cases amount to 70 per cent of the total cases. Luxury items The warning came during an open discussion on the security of bank loans yesterday in which bank representatives, legal experts and economy experts took part. Dr Mohammad Murad, Director of Dubai Police's Decision Support Centre, pointed out that banks should contribute 50 per cent of the expenditure of inmates jailed for bank-related cases, as the cost of one inmate amounts to the cost of a person staying in a five-star hotel.
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