Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog
The Federal Reserve is meeting today and widely expected to start to reduce interest rates. I last heard that there was a 55% likelihood for a .50 cut. Frankly, I’d expect a .25 cut. But if they want to reach a goal of 100 basis points cut by year end, they almost have to do a .50 cut today.
So one big question: how much and how quickly will that trickle down to ordinary consumer debt?
A lot of people would like to avoid bankruptcy. I get it. The Wall Street Journal published an article yesterday that while consumer credit debt is up 11% over last year, other sources of credit are drying up and no reasonable alternatives exist.
- Personal loans which are just under a 12% interest rate,
- Credit card rates of interest average 22% per the Federal Reserve,
- Heloc loans average 9%
Not only are rates a problem, but approval is as well. Originations of Helocs have been “overwhelmingly skewed” toward borrowers with very high credit scores per New York Fed data cited by the WSJ. So borrowers in trouble won’t be eligible.
Normally, it takes awhile for deposit funded banks to offer new reduced terms to its customers. But nowadays, fintech firms can act much quicker as much of their funding is dependent upon the government’s rate. Places like Affirm that service the buy-now-pay-later group may be able to approve more loans quickly.
Simply discharging the debt and then rebuilding your credit is probably the most overlooked option. Most people don’t realize that with their high debt to income levels, they’ve essentially maxed their credit making it unusable anyway. Why not see what options exist to get rid of that debt now?
If you are in the Tampa Bay area – the Middle District covers Hardee, Hernando, Hillsborough, Manatee, Pasco, Pinellas, Polk, and Sarasota counties, please contact us using the link below, email to info@christiearkovich.com or call us at 813-258-2808.
