by KYW's Salil Gutt
An article in this month's issue of Smart Money magazine caught my eye. It reported on price profiling in the loans business. For years, airlines have used a system of pricing that drove people nuts. You pay $400 for an airline ticket. The person sitting next to you paid something else. Now this same concept is being applied to the largest financial transactions people will ever make: mortgages, rentals and car loans.
Here's how this works.
Say you apply for a mortgage at a bank. The loan officer will dig into a mountain of data on you online and then come up with a rate he or she thinks you can afford. It is definitely not a one size fits all proposition. The big lesson here for all consumers: you have got to shop around. Just because you bank at your neighborhood bank does not mean you will automatically get the best deal. The reason for this shift is that consultants have convinced banks that they will make more profits as people may be too lazy to compare rates.
In counterpoint, consumers who comparison shop will save even more than they do now.
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