The stalemate in Washington could interfere with your ability to borrow money. The Small Business Administration has stopped all but emergency disaster loans until the government shutdown ends. A prolonged shutdown could affect Federal Housing Association loans too.
Indiana Bankers Association president Joe DeHaven says ordinary consumer lending shouldn’t be affected — unless the budget showdown spills into the impasse over the debt limit. But DeHaven says he fears that‘s exactly what‘s going to happen.
The Treasury Department estimates the government will max out its credit October 17. If the debt ceiling isn’t raised, DeHaven predicts “havoc.” What form that havoc takes is still uncertain, but DeHaven says bond rating agencies would have no choice but to downgrade government debt. That would force interest rates up for all borrowers, not just the government.