What's going on?? (Banks and loans)

[LAS14]

My son and his wife applied for a car loan. They applied separately - same loan. He is a part time teacher at $40/yr. She is a physician at $200/yr. She has the better credit rating. He got a loan for 3.1% interest. She got a loan for 3.4% interest.

What's up?

[jberryhill]

1. Which one has more current debt?

Do either of them have student debt?

[LAS14]

2. Neither has any debt at all. Not even a mortgage. They...

...own their house outright. Paid it off this year. Although, they do have separate credit cards. Neither carries a balance across months, but at the time of application one could have had more of balance than the other, I suppose. And over 10 years ago she did have credit problems. But isn't that reflected in her current credit rating?

[mythology]

10. What about credit history?

[LAS14]

11. No credit problems at all for the last 10 years, although...

...she was late on a lot of payments before they got married. But wouldn't that be reflected in her (better than his) current credit score?

[democratisphere]

3. The banksters realize she makes more money so they can charge her

a higher interest rate.

[LAS14]

4. This is sarcasm, right??? nt

[democratisphere]

5. Banksters are crooks.

Might even be a higher rate because she is a female. Who knows?!

[LAS14]

7. Well, the sex discrimination thing is the first...

..that popped into our minds.... But for a loan from Bank of America???? On line????

[democratisphere]

9. "Banksters of America" knows more about "You" than "You" know about "You".

[salin]

6. Perhaps because of their incomes the bank think they can - in the long run - make more

money off of your son. Possible late fees, stacked upon possible late fees.

Remember shortly after the Great Crash - we learned that many banks and credit card companies viewed people who paid their debts on time, always, as 'dead wood' (seriously) as no additional money could be made off of fees. Somewhere in the past couple of decades people who pay their bills are considered by some lenders as not as good of an investment as people who are more prone to struggle and be late. Because the business model shifted to view those fees as a main part of their revenue streams.

In that perspective charging a higher rate to the person less likely to pay extra fees along the way might make what to them seems a rational business decision to charge a slightly higher rate to make up for lost "late fees". Its a rather perverse logic - but one that as recently as the late aughts seemed pretty prevalent in banks.

[LAS14]

8. Huh. Maybe.

[redstatebluegirl]

12. They put us through hell during our refinance.

We have a great credit rating, but the fixated on my being part time and older than my husband even though we have been married for 25 years. We finally got one with a good rate but wow was it a pain. I should have said my name was Trump, I could have gotten a great deal and then filed bankruptcy and got out of it clean.

[TheBlackAdder]

13. If the loan is through dealership, many will steer you to a higher loan, so they can get commission.

.

Right now, if it's a new car, you shouldn't pay more that 0.9 or 1.9%, when running specials. Many times, with new cars, you'll get better deals using company financing, rather than going to your local bank or credit union. I have a 0.9% loan right now, wich is through Subaru and is managed by Chase. My local bank wanted around 4% too.

However, some dealerships, especially smaller ones, will use car loans as another profit source. It's like buying appliances, many salespeople won't steer you towards the best appliance, they will steer you towards the one that gives the higher commission and spiffs--because that's where they make their money.

.

[WhiteTara]

14. What do you think is up? I'd say, WMP

or Women/Minority Penalty, how about you?

[Frustratedlady]

15. Because she's a woman? Not supposed to matter, but it wouldn't surprise me if it did.

Or, maybe they thought they could pay for a car outright?

Same bank? I dunno...just throwing some things out there.