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Lending money: Finance professor shares tips for navigating

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  Published in Business and Finance on Friday, September 19th 2025 at 12:33 GMT by fox6now
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Finance Professor Offers Practical Advice for Navigating Loans and Credit

Fox 6 Now – Houston, TX – When the word “loan” rolls around, many people immediately think of student debt, mortgages, or payday lenders. In a new feature published this week, Dr. Emily Santos, a finance professor at the University of Houston’s College of Business, breaks down the often‑confusing world of borrowing into a set of clear, actionable steps. The piece, which appeared on the Fox 6 Now website, explores the common pitfalls borrowers face and highlights strategies for making smarter financial decisions.

The Growing Pressure to Borrow

The article opens with a brief overview of the state of borrowing in Texas. According to data from the Texas Department of Banking, nearly 2.3 million Texans have a mortgage, while student loan debt has surpassed $1.1 trillion nationwide, a figure that has only grown in the last decade. “The pressure to take out loans is immense—whether it’s for a house, a car, or a degree,” Santos explains. “But without the right knowledge, borrowers can quickly find themselves in a cycle of debt that’s hard to escape.”

The piece also links to a Consumer Financial Protection Bureau (CFPB) report on “Predatory Lending Practices in Texas,” offering readers a deeper dive into the kinds of lenders that exploit vulnerable consumers. The CFPB report is cited as a key resource for understanding how some institutions tack on hidden fees or set deceptive payment schedules that make it difficult to see a clear path to repayment.

1. Know the Full Cost of the Loan

Santos stresses the importance of looking beyond the headline interest rate. “APR,” she says, “is the real measure of a loan’s cost because it incorporates fees, points, and other charges.” The article includes a quick‑reference chart that compares the APR of a typical 30‑year fixed mortgage with that of a private student loan, illustrating how a seemingly low monthly payment can mask a higher overall cost if fees are not considered.

Readers are directed to the Texas Comptroller’s Office website, where they can find a user‑friendly loan calculator that breaks down monthly payments into principal, interest, taxes, and insurance. The Fox 6 Now piece even offers a downloadable PDF checklist that borrowers can use when comparing loan offers from multiple banks.

2. Fixed vs. Variable: Pick What Makes Sense

A common source of confusion for many borrowers is choosing between fixed‑rate and adjustable‑rate loans. Santos explains that while fixed‑rate loans provide predictability, adjustable‑rate loans may offer lower initial rates that can rise over time. “The decision hinges on your risk tolerance and how long you plan to stay in the property or keep the loan,” she notes. The article cites a recent survey from the Federal Reserve indicating that 42% of U.S. homeowners in Texas have chosen adjustable‑rate mortgages in the past five years—often because they anticipate selling or refinancing before rates rise.

The article links to the National Mortgage News website, where readers can find real‑time data on current adjustable‑rate mortgage rates and how they compare to fixed rates in the Houston market.

3. Understand the Debt‑to‑Income Ratio

Santos emphasizes that lenders use the debt‑to‑income (DTI) ratio as a critical metric when deciding whether to approve a loan. The piece includes a sidebar that explains how to calculate DTI and offers sample scenarios. For instance, a borrower with a $5,000 monthly debt payment and a $10,000 gross monthly income has a DTI of 50%—well above the 36% threshold many lenders prefer.

To help readers get a sense of where they stand, the article links to an online DTI calculator provided by the Texas State Loan Office. The calculator also provides personalized recommendations on how to reduce DTI, such as paying down existing debt or increasing income.

4. Read the Fine Print

One of the most frustrating parts of borrowing, according to Santos, is the fine print. “A clause that allows the lender to increase the rate after a certain number of years can make a seemingly affordable loan suddenly unaffordable,” she says. The article includes a bulleted list of common red‑flag clauses: “Rate‑Cap Violations,” “Prepayment Penalties,” and “Early‑Repayment Fees.” For each clause, the Fox 6 Now piece offers a brief explanation of what it means and how it can impact the borrower’s finances.

Santos encourages readers to use the “Ask the Lender” feature on the Texas Consumer Protection portal, where they can submit questions about any clause they don’t understand. The portal link is highlighted in the article, along with a short guide on how to draft a clear, concise inquiry.

5. Plan for the Future

The final section of the piece turns to long‑term planning. Santos advises borrowers to think about how loan payments fit into their overall financial goals, such as saving for retirement or building an emergency fund. The article references a recent study from the Texas Economic Development Council that found households who prioritize debt repayment often experience lower financial stress.

For readers seeking to improve their credit score—a key factor in securing favorable loan terms—the article links to the Credit Score Council’s “Credit Score Improvement Toolkit.” The toolkit offers personalized tips on paying down revolving debt, correcting credit report errors, and avoiding “credit score penalties” such as opening too many new accounts in a short period.

Conclusion: Empowering Borrowers with Knowledge

In closing, Dr. Emily Santos urges readers to take control of their borrowing journey. “Education is the best defense against being overcharged or trapped in a debt cycle,” she says. The Fox 6 Now article underscores this sentiment with a call‑to‑action: readers are encouraged to download the free “Loan‑Planning Checklist” and schedule a one‑on‑one consultation with a financial advisor at the University of Houston’s Student Financial Services Office.

With its mix of hard‑facts, expert advice, and actionable resources, the article offers a comprehensive roadmap for Texans navigating the complex landscape of loans and credit. By providing clear explanations and linking to authoritative external resources, Fox 6 Now has turned what could have been a dry, technical discussion into an engaging, reader‑friendly guide—an essential read for anyone considering a major loan in the near future.