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What Are the Alternatives to Short Term Loans?

By Frugaling 1 Comment

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Some people prefer to go down the road of applying for a short-term loan when they are dealing with financial difficulties. Here at www.creditpoor.co.uk, we aim to provide you with the required financial guidance in order to determine whether you should apply for a loan or look for other alternatives.

A short-term loan can be a great option if you need to get over a financial ordeal or simply make a certain purchase. However, some people prefer not to do so and look for other solutions. Interest rates of short-term loans can be sometimes high, depending on how long you intend to repay the borrowed amount. Here at www.creditpoor.co.uk, we review each specific case and access our massive lenders’ database to find you the best deal possible. We are merely a broker that caters for the need of our clients, and we look for the best deals with the lowest interest rate possible.

However, if you are certain that you would like to look for alternatives to short-term loans, here are some tips that you might find feasible.

  1. Contact the Company You Owe:

It is always better to start with contacting the company you owe money for. Most companies are quite tolerable when you have the intention to pay back their money. They would like their money back, of course, and they would not risk your declaration of bankruptcy.  www.creditpoor.co.uk advises you to contact the company first and explain your situation. They should arrange a plan for your repayment that works for the well being of both of you. But remember, you should not make any vain promises that you would not keep.

  1. Contact Family Members and Loved Ones:

If you have not done that already, you should start contacting you family members and friends. It is the best alternative to short-term loans, as you would not have to deal with the interest rate of lending services. However, you should also consider the financial situation of others. You do not want to fix you problems by inflicting hardships on others.

  1. Contact Your Employer:

If you are employed, you should consider contacting your employer for an advance in pay. If you plan to work there, it would not be a problem to take an advance on the wages you are eventually going to receive. However, try to manage and assess your situation properly; as you would not be getting a salary for the month you are requesting an advance from. www.creditpoor.co.uk usually deals with clients who happen to manage their finances poorly. Try to take smart decision concerning this step, as it might hurt your financial situation even more.

  1. Withdraw from Your Savings Account:

Some people create a savings account to be able to accomplish future goals or have some money to rely on when times are tough. Well, now might be the time to make a withdrawal from your savings account. Try to be reasonable with your withdrawal, and do not make a habit out of it. Once you are debt free and all the stress of your financial difficulties subside, you should return the amount you withdrew from your savings account as soon as possible.

We hope that you find these alternatives to short-term loans have helped you figure out a way to overcome your financial ordeal. With proper knowledge of management and financial arrangements, you should find your situation stable for quite some time. Remember that www.creditpoor.co.uk is always here to help you out when the times are tough. If you plan to apply for a short-term loan, make sure to contact us and leave the rest for us.

 

Filed Under: Money Tagged With: loans

3 Vital Decisions for Financial Fitness

By Frugaling 10 Comments

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Winter in Iowa

Winter is here in the Midwest. A breezy, 20-mph wind cuts through everything. The roads have an icy sheen. My breath is eviscerated as I walk out the door. I choke. My commute — a brisk jog — is bone-chilling. With my backpack rustling back and forth, I gingerly move from foot to foot. Frankly, despite the cold and madness of running in work clothes, I’m going to miss these days. I’m going to miss the toughness of this work and school routine.

I can feel my time in Iowa City is winding down. Over the next year and a half, I’ll move on to my internship (similar to a medical doctor’s residency). That internship will be in a new location — new peers, new streets, new names, and… new weather. As one chapter closes, another opens, right?

The decisions I make today will greatly affect where I end up — physically, emotionally, and financially. The next couple years include challenging financial concerns and I want to openly process them with you. There are three domains of my life that I’d like to consider: possibly buying a car, planning for travel/lodging costs associated with internships, and potentially moving three times in three years.

To buy, or not to buy… a car

One and a half years ago, I said sayonara to a hefty car loan and excess liability. The 2006 Honda Civic coupe was cool, efficient, and reliable. But paying off an $11,000 car loan with little money leftover to save or afford repairs felt dangerous. So, I sold it.

Since then, I’ve used my bike and feet to travel nearly everywhere. While I didn’t need to lose weight, the decision has kept me svelte and fit. When all you have is your physical health to get around, you tend to take better care of yourself. Simply put, I’ve enjoyed being car-less — it’s freeing.

I don’t lavish browsing Craigslist and other used car websites, but I’m increasingly sneaking peeks. In the next couple semesters and moves, a car could help me immensely. I’ll use it to go grocery shopping, visit my girlfriend, and potentially move into a more affordable housing complex. Without a car, these tasks become exceedingly difficult.

Now more than ever, I’m conscious I might be trying rationalize buying a car. That can be financially disastrous. Thankfully, I’m engaged in a careful consideration — unlike my first car purchase, which includes:

  1. Talking openly with family and friends
  2. Browsing used car sites patiently
  3. Scoping out values, which will hold resale and reliability
  4. Considering two price points: dirt cheap and car loan levels
  5. Reviewing how I could potentially get by without a car

I’m motivated to try and buy a car in cash, but heavily limited by my bank account, the stock market’s recent decline, and the two following tasks: internship applications and two apartment moves in the interim.

When I look at my bank accounts, I’m seeing a tiny number: $3487.93. While I’m happy and privileged to have a positive number between my checking and savings accounts, I’m concerned. I make little net income each month as a graduate student. Buying a car would drain nearly all of my liquidity. It’s forcing me to be careful — along with the reminder that I hate debt. I desperately want to stay positive in my net worth. If you’ve got some special advice about car buying or an offer I can’t refuse, hit me up!

Let’s talk about your future, young man

My time in Iowa City always had an expiration date. Graduate school is a relatively fixed duration of 5 years here and then a year-long internship — 6 years total. Afterwards, it’s time to finish up the requirements and look for professional opportunities. And this final transition can be painfully expensive.

In 2011, the average out-of-pocket expenses for applying and traveling to internships cost doctoral students $1,800. When asking classmates, they’ve cited costs around $2,000-$2,500 nowadays. With this financial burden in mind, and aforementioned funds, I’m in a bind. In the best case scenarios, it seems I either use a major portion of savings towards a car — with little remaining for internships — or dedicate it towards internships and remain without a car. At this point in my life, neither sounds smart.

Worse, I might have to take out a car loan to afford the internship experiences or a student loan to afford everything else. Those are both worst case scenarios for my financial present and future. I loath loans and cannot envision them being part of a healthy budget right now. These aren’t home mortgages; rather, complicated instruments that encourage spending, manipulate critical thinking, and have led me into deeper holes.

One thing I can do is redirect some poorly performing investments into internship savings, follow a close food budget for the next year and a half, and pour every extra penny into internship savings. With this drastic action, I might be able to buy a car in cash right now, while continuing to save for this decision. This version is an ideal, though. I’ve learned that financial decisions are often controlled by unexpected and unpredicted events, but I can try.

Moving out, moving on

After four years of easy living in graduate student housing at the University of Iowa, I’m dealing with one of the sadder moments of my time here: being forced to move. Financially, the current apartments I live in have become financially burdensome. When I moved to Iowa City, rent was a competitive, amazing $435 per month for a one-bedroom apartment. Compared to the greater community, rent was dirt cheap and offered month-to-month leases.

Two years after I moved here, a private company built new buildings and prices skyrocketed. Next fall, rents will be $999 for a one-bedroom apartment. That’s $564 in rent increases. I can’t afford this place anymore. It went from graduate housing to luxury living for staffers and University of Iowa faculty making far more than fixed-income students. While complicated, it’s a symptom of the privatization of public resources and universities.

Despite the previous increases, I’ve stayed for consistency and friends. Now, it’s time to move out and on. I’m looking further out from the city center. Prices would be lower and I’d be closer to grocery stores. With my final year in Iowa right around the corner, this is an inevitable and financially necessary decision.

Although, despite savings in rent prices each month, I’ll need to afford moving costs and rental deposits. Even in an effort to save money, I’ll need to spend some. Oh, the irony! And the situation becomes even more challenging: over the next three years, I’ll need to move three times. Moving costs and new rental deposits will be a theme for my life temporarily.

In short, money is tight. Three domains necessitate savings, planning, and careful consideration. Purchasing a car, financing internship applications, and moving will drain my savings, but I’m dedicated to avoiding debt and making smarter financial decisions. Previously, I would’ve made rash judgments and rationalized them as “completely necessary.” I would’ve said “I need to buy this [insert expensive item here].” Today, my financial state of the union is better than ever, but precarious. I have to be careful and decisive — rational and reasonable.

Filed Under: Loans, Save Money Tagged With: car, financial planning, future, graduate school, internships, iowa, loans, moving, school, Winter

The Curious Case Of Rising Interest Rates

By Frugaling 5 Comments

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Watch your savings rate!

On Wednesday, December 16, the Federal Reserve opted to raise interest rates for the first time since 2006. The Fed pointed to healthy economic indicators – specifically, job growth – as the key motivator for action. Chairman Janet Yellen explained that rates would rise from 0 to 0.25 to 0.25 to 0.5 percent. Experts are suggesting this is just the beginning for rate hikes.

I’m not a Federal Reserve expert, fan boy, or aficionado. Nor have I spent years chastising its existence and advocating for a gold standard (I’m looking at you, Ron Paul). But I fundamentally understand the borrowing window. When the Fed keeps rates low, it makes borrowing cheaper. Vice versa, higher rates tend to make borrowing more expensive. Rates can also discourage or encourage greater savings rates.

The Federal Reserve seems to hold the reins on savers. As an advocate for frugality, I wondered how banks had changed their rates since last Wednesday’s decision. CNBC reported that Wells Fargo, JPMorgan Chase, and U.S. Bancorp “almost immediately” changed their “prime rate” (for borrowing). With a higher prime rate, new borrowers would see more expensive car loans, credit card interest, and home mortgages. It should bring new revenue to the banks, too.

A couple days ago I received a notification regarding my American Express credit card. Despite perfect payments, a near-800 credit score, and constant monitoring, my interest rate was being changed. The credit card would now inflict a 22.49% interest rate for carried balances. In other words, if I purchased something and wanted to pay it off over time, I’d be taxed an extra 22.49%. The move corresponded perfectly with the Fed rates, as my interest rate was previously 22.24% (still astounding).

When it comes to credit and borrowing, the changes were swift. Curiously, my savings rate remains unchanged. I still receive 0.10% and 1.00% for my Ally checking and savings accounts, respectively. These sit stagnant. While I understand that banks have an interest in protecting and securing greater profits through higher borrowing rates, I’m struggling to see the same “immediate” benefits for savers. Where is this additional quarter-point interest rate to encourage more savings?

It seems banks play the best of both worlds. When rates lower, they advertise and sell huge amounts of loans. Suddenly, the economy becomes bloated with cheap money and people spend instead of saving. And then higher rates create reason and rationale for banks to raise loan rates, with little care for updating savings rates.

Unfortunately, as banks keep rates low, the average saver suffers. Many low income and vulnerable populations rely on strong savings rates, but haven’t received them for years. Heck, I remember a time when my savings account paid 2-3% interest. Those days seem to be long gone — even with higher rates on the horizon. Today, savings rates can’t even keep up with modest inflation. Maddeningly, putting more in savings simply means you’re losing money each month!

As we consider this double standard in the banking world, let’s consider what we can do and where there’s money to be made:

1. Stay on the capital side

There’s power in capital. Whether you’re lending cash through peer-to-peer lending programs or investing in rental properties, those who put their money to work are handsomely rewarded. The game doesn’t shift much when interest rates change moderately. However, if you don’t have much savings, it’s important to build a little egg before engaging in these tactics.

2. Invest your spare cash

If you’re unable to buy real estate or invest larger amounts in lending, make a simple portfolio to invest your spare cash. There are various platforms that can automatically invest spare change, but nothing is easier or cheaper than opening a Vanguard account and choosing their exchange traded funds (ETFs). I’d recommend Vanguard Total Stock Market ETF (VTI) and Total Bond Market ETF (BND). Together, they afford rapid exposure to the markets with reduced risk due to diversity. Depending on your risk allowance or aversion, portfolios can be split 50/50, 60/40, 80/20, or even 90/10 between the VTI and BND. You’ll likely get a fantastic expected return no matter what you decide — in comparison to savings rates.

3. Advocate for higher savings rates

Unfortunately, the default — savings accounts — are too miniscule to help people who need it most. Despite the Fed’s decisions to raise interest rates, it seems that many interest bearing cash accounts aren’t receiving the benefits. As banks continue to hit record profits, there seems to be some wiggle room for better interest rates. Advocacy isn’t often talked about in personal finance, but speaking out and up is one of the most effective ways to change situations. Write your representatives in Congress and tell them you are waiting for banks to reward savings. Tell your bank that you’re looking for alternative locations for your money, and maybe even leave for a credit union (as they tend to pay better rates).

Filed Under: Loans, Save Money Tagged With: American Express, Banks, credit, Federal Reserve, Interest Rates, invest, lending, loans, savings

Debt: The Destroyer Of Dreams?

By Frugaling 17 Comments

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Colorado State University The Oval

Student loans ruined my relationship with money. It ripped out executive functioning of the prefrontal cortex, spit, stomped, and rolled it flat with a rolling pin. The critical-thinking components died an unfriendly, brief death. Suddenly, I couldn’t think straight or make sense of the “cost” of anything. I was the walking automaton with a mantra that wouldn’t stop: click, swipe, buy, repeat.

When you own nothing, the bank owns you. The lack of money became a thief of sleep, calm, and patience. This emotional vertigo sucked the fun out of future-oriented goals and dreams, as everything had reservations: lives comprised from decades by debt. In this confusing, cyclical spin, I temporarily lost the clarity that can be found within goals.

New questions refused to leave me alone. Why did I pursue this route in the first place? How will I possibly pay this off? Who can actually help me if something goes wrong? Where do I go for objective advice and feedback?

Then came questions about aging. How old will I be when the debt is done? What age will I be when I retire? How will I retire? Will I ever retire? How can, potentially, six-figures of student loan debt be paid off?

Lastly, were the questions about life and debt. What happens to my debt if I die before paying it off? Will it be passed on to a spouse, child, etc.? What if I left the country and never came back? What would I do if I got injured and either missed or was no longer able to make loan payments?

I briefly considered debt forgiveness plans. In some circumstances and areas of study, the federal government “forgives” debt after on-time payments after agreed upon periods of time. Debt forgiveness would allow me to wipe the slate clean, and be free faster. But I couldn’t wrap my head around the concern that might come from not graduating or being able to pay on time. What if something/anything interrupted my plans?

Debt is the ultimate restriction of freedom. From dreams at night to dreams of the future, debt knows no boundaries. It doesn’t politely wait for your day to begin or end. It’s the constant burbling and gurgling noise that confuses focus. And I’d be shocked if debt doesn’t restrain students’ ability to study and proficiently pass through school.

Nobody deserves this discomfort and stress. While many parents fork over gigantic savings for their children to attend college, countless undergraduate students pay their own way. As a culture, we’ve exalted the role of higher education and repeatedly shown statistics for success. “You’ll make more over your life as a college graduate,” they say. And they’re right, most people do.

Unfortunately, not everyone can or will take the same path. What if you aren’t excelling in college and decide to drop out? What if you get hurt in the four years of college? What if, what if, what if…?

For every student that decides to pay their own way through college, they take a leap of faith in themselves. Our culture admires their choice, risk, and self-investment. But despite this admiration, we do not reward them by heavily subsidizing their educations. Instead, we enshrine them in debt bubbles that are ready to burst.

Debt becomes the great opportunity maker; unfairly, as only some of us will carry this burden and it totals over $1.2 trillion.

As a country, we need to attack this debt — the wealthy and impoverished, together. The United States should be a leader in education for the masses. Between 5 and 18, we suggest that people deserve it. We say it’s a right. Children should receive a rounded education. Then, you graduate high school and — poof! — the right becomes a privilege afforded to the wealthiest among us.

To solve the debt crisis, we must rethink the entire privilege-based system of higher education in America. Fundamentally, we need to wrap our heads around our economic needs for an educated, working-age populace. The immoral shackles of debt that we place on hardworking students shouldn’t exist.

Filed Under: Loans, Social Justice Tagged With: college, debt, education, loans, Student Loans, Students, university

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