Credit scores are used by creditors and lenders to determine whether they will lend you money and what terms (interest rate, how much, etc.) you will be offered. Boosting your credit score will result in considerable savings—better loan terms and lower interest rates. Interest-only and other sub-prime mortgage loans—those with less than stellar terms sold to borrowers with low credit scores or not enough money—have resulted in foreclosure for many homeowners when they couldn’t afford the hiked payments.
When the republican governor of California, was elected, he had promised that he would cut State spending and help private business grow and it seems that he was able to do just that but apparently not to benefit of the residents of California but the California’s banks and credit unions.
According to an article on Bloomberg, Banks and Credit Unions in California will now offer zero interest loans to over 200,000 State employees whose salaries maybe reduced to minimum wage.
“We’re trying to show our support for our state-employee members,” claims Golden 1 Credit Union’s Donna A Bland.
But are they really? Anyone knows that by reducing one person’s employee and offering them installment loan, even a zero interest one, only means trouble. It keeps them under further debt, takes away their ability of paying back the loan or living paycheck to paycheck, which makes them more vulnerable financially for more loans. And when they run out of 0 interest loans, then they start taking interest based loans and even high interest loans including short and long term loans such as payday loans.