Finding the Right Line of Credit
Interest for Massachusetts mortgage rates and small business loans are at an all-time low. Yet in a sea of “competitive rates,” the trick is to find a bank that cares about its customers and truly offers low charges.
For responsible adults trying to start their own business without an established line of credit, community banks are a great option.
In 2003, the Federal Reserve Bank of Kansas City published a report that shined light on the different business strategies of large and small banks. They concluded that community banks focus on “relationship building” versus large banks which rely heavily on “hard financial information, computer models, andcentralized decision-making.”Small banks will typically use “personal knowledge of customers’ creditworthiness” as well as their own expertise on the surrounding community to make financial decisions. (http://www.kc.frb.org/PUBLICAT/ECONREV/PDF/2q03keet.pdf)
Basically, community banks understand that some people miss a few credit card payments in college. A low credit score should not make an individual completely unable to get a Massachusetts Small Business Loans. The one-on-one interview is also important.
What if your business requires you to work in a different town or neighboring state?
One popular misconception is that community banks work in a small, confined territory. While it’s true that some banks fall into this category, other financial institutions are considered “community banks” despite having branches in different parts of the country. It all comes down to the bank’s employee size threshold.
Aside from business loans, community banks are a great place to find premium Massachusetts Mortgage Rates. A popular choice for borrowers is the 30-year fixed rate mortgage which demands high yet stable interest. The going-rate for this type of mortgage is around 4.375%. However, APR – the annual percentage rate – is where banks differ.
Community banks may offer APR on 30-year fixed rate mortgages at as low as 4.461%.
Selecting a Massachusetts auto loan for small business can also be tricky. Big banks might advertise rates with APR as low as 3.25%. The only problem is accessibility since international banks rely mostly on credit score versus the one-on-one interview. Local banks are more likely to consider the actual interview as a significant factor in their decision for loan applications.
Additionally, rates subject to APR can rise dramatically if the user’s credit score goes down. For young adults without an established line of credit, it is a good idea to apply for a variable rate loan at a local Massachusetts bank. (Variable rate loans have a fixed-rate and therefore, are not affected by a drop in one’s credit score.)
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ABOUT THE AUTHOR
Morgan is a resident of Massachusetts. She writes about local banking and the difficulties of choosing the best Massachusetts mortgage rates and Massachusetts small business loans. She also writes about Massachusetts auto loans and other local finance related topics.