Sub-prime lending is a type of credit given to homeowners who do not meet the criteria for regular (“prime”) loans. A typical sub-prime borrower has a poor or limited credit history and a FICO score of less than 620. These factors make them a risky investment for regular lenders, which keeps them from taking out loans. To compensate for the risk, sub-prime lenders impose higher costs on their contracts. For credit cards, this is usually a higher fee for over-the-limit spending or late fees. Sub-prime mortgages usually have higher interest rates and stricter terms. Contrary to popular belief, sub-prime lending is a perfectly legal business. But like many new industries, it has been tainted by lenders who don’t play by industry standards. From 2003 to 2007, shady companies have turned up offering terms ranging from unfair to downright illegal. This, along with the economic slowdown, has contributed a great deal to the real estate crisis that forced many homeowners into foreclosure. Are all sub-prime loans bad? No. There are actually some sub-prime companies who give you good value for your money. If you find a good lender and stay current, sub-prime lending can have its benefits.For example, many people

Most of us know what a bank is. We know that in order to better manage our financial life; we should have both a checking and savings account at a minimum. We also know their services are similar across the board for most banks. Some of these services include:

• Accepting deposits

• Making auto, home, and business loans

• Reporting what you paid and earned

• Issuing credit cards

• Online bill payment

• Providing investments

The list can go on and on, but those are basic things most banks will offer. However, what vary from bank to bank are the terms and conditions. That is why everyone should consider their unique needs and then select the bank that best meets those needs.

Comparing Your Choices

There are national, regional, and local community banks around the country. These banks are further categorized into the following segments:

• Commercial Banks

• Savings & Loans (S&C)

• Credit Unions

• Mutual Funds and Brokerage Firms

• Virtual (Online) Banks

Commercial Banks

Commercial Banks serve both individuals and businesses. They typically have multiple, well-located branches throughout a region, and offer broad range