Archive forAugust, 2015

Nonprofit offers car loans to consumers with bad credit

Bad credit can make paying for a car an expensive proposition. Buta nonprofit group that serves people who cant get conventional loans from banksis jumping into the car loan business.

The Capital Good Fund has been granting emergency payday loans to Rhode Islanders for years.The biggest loan under that program is just $500.Now its offering car loans for up to $13,500.The interest rates will be from 9 percentto 15 percent.

The founder of the company, Andy Posner, saidit will save people thousands of dollars.

We take some time to get to know the client …so we can do that, Posner said.

The program will give access to car loans to people who currently may be priced out.It also will allow the Capital Good Fund to expand, since the program will generate more money for the fund.

For more information, check out the Capital Good Fundwebsite.

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Car finance options: Best way to buy a 65 plate

There were 1,376,889 cars registered between January and June – 324 more than the previous best first half, in 2004, according to the Society of Motor Manufacturers and Traders. The boom has been attributed to a combination of low interest rates, attractive finance deals, and fierce competition between dealerships.

According to Ian Crowder at the AA, people are becoming increasingly confident about using either a personal loan or finance arrangement with the dealer. There are bargains to be had on the forecourt, he said People have better job security and the economy is improving, so they feel more optimistic about taking out credit.

So if you want to be behind the wheel of a brand new vehicle with a 65 plate from next week, what are your options?

Borrowing from friends or family

If you know someone who can lend you the money either free of interest or at a very low rate then clearly that will be the kindest option for your wallet. Bear in mind, however, that plenty of friendships have been destroyed and family rifts created over money.

Loans and credit cards

If you can get a decent interest-free period on new purchases – and you can either clear the debt or switch it to another card at the end of the term – then a credit card might be worth considering, depending on whether the issuer grants you a large enough limit.

Meanwhile there has been a surge in rate cuts in the loans market, according to Rachel Springall, finance expert at the data provider Moneyfacts, with leading deals of around 4.4 per cent – compared with the market average of 8.4 per cent APR. She cautioned, however: Headline-grabbing loan rates are designed to attract new customers, but borrowers should keep in mind that most [of the attractive] rates focus on loans of £7,500 or more.

Advertised rates are given to only 51 per cent of applicants, so you are not guaranteed the best deals.

In any case, she added, a loan might not be needed. If people need to borrow only a small sum, such as £3,000, they could be wasting their money on the interest. They might find that by using a credit card offering 0 per cent interest, and sticking to set monthly repayments, they will clear debts faster.

Car finance agreements

Dealers will make some form of finance arrangement available – including 0 per cent offers – but its important to understand how they work before you decide whether they will meet your needs.

The first type of deal is hire purchase, a simple form of finance secured on the car. You pay a deposit and then repay the balance, plus interest, over the loan period, explained a spokesman for the consumer group Which?

There are also administration fees and its worth noting that until the final payment has been made, you wont own the car – or be able to sell it, unless the lender agrees. However, if the car goes wrong during the loan period, the lender is jointly responsible with the dealer for fixing it.

Then there are 0 per cent finance deals. You often find these are offered on cars that a dealer is looking to shift, especially models that are about to be superseded.

While tempting, you need to consider that they will require a large deposit (often in excess of 30 per cent), while any missed payments can result in you being bumped on to a higher interest rate.

The next option is an arrangement known as personal contract purchase (PCP). You pay a deposit – around 10 per cent of its value – and then monthly payments for the life of the plan, Mr Crowder explained. You also agree to look after it and not exceed an agreed mileage. At the end of the arrangement you can either hand the car back, buy the car, or possibly renew the arrangement with the dealer for a new vehicle.

Finally there is a leasing agreement. This is similar to PCP except that you have no option to buy. The cost of the lease will depend on the type of car, length of plan, and agreed mileage limits.

The most important thing to be aware of when taking out car finance is how much its really going to cost, according to Helen Saxon at the advice site For this, you need to know the monthly payment youll be making and whether it is affordable, she said. Youll also need to know what APR the finance agreement is charging. All agreements need to have this information, so ask if youre not sure.

Would-be buyers also need to watch out for add-ons such as service packages and warranties. While they can be useful, especially if thrown in for free, dont pay over the odds for them, Ms Saxon added. You can always shop around for the best deal.

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Snapchat Names Former Mattel Executive Drew Vollero Its Finance Chief

Snapchat Inc., one of the most highly valued private tech startups, finally hired someone to run its finances.

Drew Vollero, a former finance executive at toy maker Mattel Inc., is joining Snapchat as vice president of finance and acting chief financial officer, the company told The Wall Street Journal on Tuesday. Mr. Vollero will report to Imran Khan, a former technology banker hired last year to oversee strategy at the mobile…

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‘Easier to get unsecured loan than business finance’

It is extremely difficult to get finance from South Africa banks to buy a business, according to Aldes Business Brokers director Ferdi van Greunen.

Aldes is exibiting at the Money Expo taking place at the Sandton Convention Centre on Friday and Saturday.

He says having centralised decision making and with little representation on the ground, banks shy away from financing business transactions. They follow a tick-box approach and in reality it is easier to get an unsecured loan than one to finance the purchase of a productive business.

Aldes, that facilitated the sale of 380 small- to medium-sized businesses last year, does assist buyers through its subsidiary Aldes Finance to link up with private investors.

Van Greunen says another major source of finance is seller finance, where a portion of the sales price is paid to the seller in instalments over an agreed upon period. “We have a large book of instalment payment agreements that we administer,” he says.

Aldes assists sellers to get their businesses market ready by among other things doing a market valuation and ensuring a true reflection of drawings in the financial statements, advising sellers on the terms they can expect when selling, ensuring that the rental contract for the business premises and all required licences are in place and that tax matters are in order. It also advises sellers on unlocking maximum goodwill.

Van Greunen says some businesses are very closely linked to the owner, which makes it a challenge to get more than the asset value when that owner decides to sell it. “We recently sold a physiotherapy practice for R500 000 after structuring the hand-over period in a way that ensured the retention of regular patients.”

The biggest indication of selling price is however profit, he says.

Aldes has a database of 1 200 businesses currently for sale and 31 000 prospective buyers, about 5 000 of whom are currently active. Not all are qualified buyers though, Van Greunen says.

In the recent past the ratio of inquiries where prospective buyers have the means to enter into a transaction, has increased from about 1/40 to 1/25.

About 75% of buyers and sellers are highly qualified white professionals with years of experience in a specific industry, trying to get out of the public sector, he says. Aldes has also seen an increase in inquiries from India and China, especially for opportunities in mining.

Typical buyers are investors who don’t want to get involved in the day-to-day running of the business and want to focus on return on investment, entrepreneurs who plan to run the business themselves and look for something that fits into their lives, and people who currently earn a salary and try to find something that will equal that. The last group has a large focus on risk.

Good quality inquiries from South Africans looking for opportunities in Namibia, and Gautengers looking for opportunities in the Western Cape and KwaZulu-Natal have also increased, Van Greunen says.

He says businesses in the security industry are currently selling well, as are those in education, including nursery schools and distance education institutions. Transport, including shuttle services, and businesses in alternative energy like generators and solar energy are also popular, he says.

Inquiries for businesses in the food industry remain strong, thanks to the good margins, but high rentals are becoming an increasing burden, he says.

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The best credit cards for people with bad credit

Poor credit makes it difficult to get approved for a credit card, but theres something out there for everyone.

We asked personal finance and credit card comparison site NerdWallet to highlight options for those with a low credit score (300 to 629).

The roundup consists of secured credit cards cards designed to help you build up your credit.

They require a cash collateral deposit equal to the credit line, generally have higher interest rates than unsecured cards, and dont offer as many rewards as regular cards. With responsible use and timely payments, you will eventually qualify for a unsecured (regular) card.

If youre looking to start or improve your credit history, consider one of these:

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Student debt a rising concern on college campuses

Grants and aid

College administrators speculated that the 2008 recession and its aftermath likely contributed to the growth in borrowing levels outpacing cost-of-attendance increases between 2003 and 2012.

#x201c;More families had to take out more significant loans because of the circumstances they found themselves in after the recession,#x201d; said Currie. #x201c;Families were trainwrecked in #x2019;08-#x2019;09.#x201d;

Houghton#x2019;s financial aid office still sees the impact of the economic collapse. A decade ago, the office might have had #x201c;hardship appeals#x201d; from 15 or 20 students in a given year asking for more aid. Now, the college fields 50 or 60 such appeals, said Currie. The size of federal and state grants also hasn#x2019;t kept pace with tuition, fees and room and board increases. The maximum Pell Grant, for example, increased from $4,050 to $5,550 between 2003-04 and 2012-13.

#x201c;When you look at the purchasing power over the past 10 years, it#x2019;s barely gone up,#x201d; said Daniel M. Tramuta, associate vice president for enrollment services at SUNY Fredonia.

Some colleges and universities have responded with new tools of their own to help students with debt.

Houghton, Niagara University and Canisius College recently contracted with a Boston-based nonprofit organization, American Student Assistance, to provide a financial education program known as SALT for students and alumni.

#x201c;It#x2019;s as focused on our incoming freshmen as it is on our second-semester seniors,#x201d; said Kevin Hearn, vice president for enrollment management and student affairs at Niagara.

Houghton is in the second year of a program that offers loan repayment assistance to students who graduate and make less than $38,000 per year. The college decided to continue the program after surveys of last year#x2019;s freshmen indicated the loan repayment guarantee helped sway a significant number of families, said Currie.

At Fredonia, Tramuta gives a 45-minute seminar on financial aid and loans during open houses for prospective students, then sends a 28-page booklet to their homes.

#x201c;Five years ago, I didn#x2019;t do that,#x201d; he said.

People sometimes forget that the federal student loan program has been around for 50 years and has been a great deal for many students, said Tramuta. #x201c;Borrowing isn#x2019;t the devil,#x201d; he said. #x201c;It#x2019;s a terrific program. It#x2019;s enabled students and families to attain their dreams. Smart borrowing is an investment that students are making in themselves.#x201d;

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International Personal Finance Plc Receives GBX 501 Average PT from Brokerages …

Shares of International Personal Finance Plc (LON:IPF) have earned a consensus recommendation of Hold from the eleven research firms that are currently covering the stock, Market reports. Two research analysts have rated the stock with a sell recommendation, two have given a hold recommendation and seven have issued a buy recommendation on the company. The average twelve-month price objective among brokerages that have covered the stock in the last year is GBX 501 ($7.84).

Shares of International Personal Finance Plc (LON:IPF) opened at 401.8000 on Friday. The firm has a 50-day moving average of GBX 415.42 and a 200 day moving average of GBX 458.35. International Personal Finance Plc has a 52 week low of GBX 348.00 and a 52 week high of GBX 548.00. The firm’s market capitalization is GBX 929.76 million.

The business also recently disclosed a dividend, which will be distributed on Friday, October 2nd. Shareholders of record on Thursday, September 3rd will be issued a dividend of GBX 4.60 ($0.07) per share. This represents a yield of 1.19%. The ex-dividend date of this dividend is Thursday, September 3rd.

A number of research firms have recently commented on IPF. Liberum Capital reiterated a sell rating and set a GBX 358 ($5.60) target price on shares of International Personal Finance Plc in a research report on Wednesday, August 5th. RBC Capital restated a sector perform rating and issued a GBX 440 ($6.88) price objective on shares of International Personal Finance Plc in a report on Wednesday, July 29th. Numis Securities Ltd reaffirmed a buy rating and issued a GBX 565 ($8.84) target price on shares of International Personal Finance Plc in a research note on Wednesday, July 29th. Panmure Gordon downgraded shares of International Personal Finance Plc to a hold rating and set a GBX 540 ($8.45) price objective on the stock. in a research report on Thursday, April 30th. Finally, JPMorgan Chase #038; Co. restated an underweight rating and set a GBX 460 ($7.20) target price on shares of International Personal Finance Plc in a report on Thursday, July 30th.

International Personal Finance Plc is engaged in international home credit business. The Company serves approximately 2.6 million customers and operates the Provident brand in Poland, the Czech Republic, Slovakia, Hungary, Mexico, Romania, Lithuania and Bulgaria markets. It provides home credit in the form of affordable, unsecured, short-term cash loans to people who need a small amount of money. Customers can repay their loan by money transfer to a bank account or through its optional home collection service delivered by its network of agents. The Company’s wholly owned subsidiaries include IPF Holdings Limited, International Personal Finance Investments Limited, Provident Financial sro., Provident Financial Zrt., Provident Mexico SA de CV and Provident Financial Romania IFN SA

Receive News Ratings for International Personal Finance Plc Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts ratings for International Personal Finance Plc and related companies with MarketBeat.coms FREE daily email newsletter.

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Financial education can pay off for students

You#x2019;re about to begin college, and you thought of everything. Right?

Maybe a few hundred dollars were put aside for books, a hundred more were spent on Penn State apparel at a downtown store and that first mega loan took care of the fall semester.

Daad Rizk, Penn State#x2019;s financial literacy manager, would like to say not so fast. She offered some tips on helping college students adjust to being on their own financially, because a strange roommate and homework for a brutally tough professor aren#x2019;t the only things young scholars have to get used to in college.

Set goals, not just academically, but with the little money left over after paying for a bundle of books and that first week shopping spree.

#x201C;The hardest thing is to make the commitment and take actions to improve one#x2019;s financial literacy,#x201D; Rizk told the Centre Daily Times in an April QA. #x201C;Money is a medium of exchange, but financial literacy is what helps us make informed decisions in line with our values and attitudes toward money management. It is easy to acquire the knowledge and get the skills, but taking actions toward a healthier financial life is what determines the level of financial literacy.#x201D;

Budgeting, according to Rizk, is the first step.

#x201C;Start with a monthly budget and graduate to a semester, year or duration-of-your-degree budget,#x201D; Rizk said in a press release. #x201C;This will help you understand the full cost of your education and how much financial aid is available to offset the cost. Practice tracking expenses to make sure you have enough to cover your basic living expenses. Find a method that works for you to manage your money #x2014; whether it#x2019;s a cellphone app, an online spreadsheet, a ready-to-use software program or simple pen and paper.#x201D;

Practices around budgeting include opening savings and checking accounts.

#x201C;Challenge yourself to live within your means,#x201D; Rizk said. #x201C;Today, banking is mostly online and financial transactions show up immediately in account records. But you still need to keep track of your account balances to make sure you don#x2019;t overdraw and spend money you don#x2019;t have. Saving is a learned behavior.#x201D;

Other tips should be fairly obvious.

A part-time job can help pay for smaller, everyday expenses and puts an onus on students to learn to budget time in addition to money. Taking an additional class when Penn State caps tuition at a flat rate for 12 or more credits will take thousands off the overall bludgeoning a bank account takes.

Long-term objectives should also be a part of a student#x2019;s financial plan.

College is a student#x2019;s first chance to build credit history.

#x201C;Credit cards should offer a reasonable interest rate, good rewards and no annual fees,#x201D; Rizk said. #x201C;One Visa and/or one MasterCard should be sufficient to start establishing credit. Never charge more than you can pay in full and on time each billing cycle.#x201D;

Smart borrowing is also a hurdle.

My Smart Borrowing, a service of the Pennsylvania Higher Education Assistance Agency, assesses student loan borrowing capacity in light of potential future income.

Students can also get direct tips and information Penn State#x2019;s Student Financial Education Center, which offers free in-person, student-to-student financial education at 307 Paterno Library.

More information is given by a free monthly workshop called the MoneyCounts Financial Literacy Series

Shawn Annarelli can be reached at 235-3928. Follow him on Twitter @Shawn_Annarelli.

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Should You Care About Rising Interest Rates?

Dear Carrie: It seems pretty clear that after many years of below-normal levels, interest rates are about to start climbing. What does this mean for my investments and for my finances in general? — A Reader

Dear Reader: Predicting when the Federal Reserve will begin raising interest rates seems to be the top focus of economic forecasters these days. And for good reason. The federal funds rate — the interest rate that banks charge one another to borrow federal funds overnight — has been effectively at zero percent since 2008, so any rate increase would be big news.

Why should the average consumer care what interest rate banks charge one another? Because that same interest rate is used to determine a variety of other short-term rates that touch us all in our daily finances, such as interest on bank deposits, loans, credit cards and adjustable-rate mortgages. And it will ultimately have an effect on both the bond and stock markets.

Overall, the fact that the Fed is considering raising rates is a good thing because it means the economy is doing well. However, a raise in rates would have a different impact on different people. In general, an increase in rates is good for savers and bad for borrowers. For investors, its more of a mixed bag, depending on the types of investments you hold.

The current prediction is that the Fed will begin to raise rates this fall or winter. However, its also predicted that any rate increase will be slow and gradual rather than dramatic. Theres no need for consumers and individual investors to panic, but its a good idea to know what to expect and what changes you may want to make in your own financial strategy.

Impact on Bond Investors

When interest rates rise, bond values decrease. However, the impact will vary depending on your circumstances. Here are three possible scenarios, courtesy of my Schwab colleague Kathy Jones:

–If youve been on the sidelines waiting for interest rates to rise, around the time the Fed begins to raise interest rates, you might consider investing in intermediate-term bonds or bond funds that mature in five to 10 years to boost income in your portfolio. You might also consider building a bond ladder by buying individual bonds or bond funds with different maturities. Bond ladders work because they give you the flexibility to make changes as interest rates change.

–If youre currently invested in long-term bonds, this could be a good time to add some short-term bonds or cash to add balance and reduce volatility.

–If you are already invested in intermediate-term bonds or already have a bond ladder, you may not need to make changes. But again, you could consider adding some short-term bonds or cash to reduce potential volatility as rates change.

Impact on Stock Investors

Generally speaking, interest rate hikes depress stock prices. That also usually means more market ups and downs. The good news is that because of all the speculation on when and by how much rates will rise, its most likely already somewhat built in to stock prices. So a rate increase might not have that big of an impact.

As always, keeping a long-term view is important, and diversification is king. But if you are looking to invest, focus on companies that have a strong balance sheet, meaning they have good reserves and less need to borrow. Also, an uptick in interest rates would most likely mean different things for different sectors. For example, financial companies might do well because rising interest rates can increase their margin, or the difference between what they charge for lending and what they pay on deposits.

Impact on All of Us

When it comes to the rest of your financial life, there may be cause to celebrate, as well as areas in which you should proceed with extra caution. If youre a saver, you can look forward to eventual better returns on your money in savings accounts. Short-term certificate of deposit rates should also begin to go up. That can be especially good news for retirees who have been struggling with very small returns on their cash.

However, borrowers need to beware. If interest rates go up, mortgage rates will rise, which is significant if youre applying for a new home loan or have a variable-rate mortgage. This could hit first-time buyers especially hard. Consider that a 1 percent interest rate increase can increase the cost of a $100,000 mortgage by over $700 a year. Home equity line of credit rates will start to inch up. Other loans also will be more expensive, so whether youre financing a car or carrying a balance on your credit card, its going to cost more.

Interestingly, rising interest rates might also lead to a decline in home prices (unless youre in a particularly hot real estate area), so sellers will want to factor that into their plans. And as borrowing costs go up, people tend to buy less, which affects businesses in general.

Keeping a Balanced Perspective

No doubt theres a lot to be aware of, but its also important not to overreact. Its easy to be swayed by the constant hype and never-ending media speculation, but if you keep on top of your own financial situation, stay diversified and true to your goals, and carefully consider your borrowing needs, you should be able to lessen any negative impact of a rise in interest rates, and perhaps you could turn it to your advantage.

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New Website Launches that is Changing the Bad Credit Industry by Providing …

Bad Credit Lifeline is changing the sub-prime financial industry online, by providing education and transparency that no other company has dared to do before. was a website founded by a team of professionals who saw a big problem across the sub-prime financial industry.  This problem was the lack of education and transparency by these companies.  Bad Credit Lifeline tries to present both the bad and good sides of the sub-prime financial industry and goes on to educate people about it in detail.  The website provides education on how to use these tools correctly in case a financial emergency does arise.
“As someone who has used a bad credit loan or payday loan as known by many, I resented the way that these lending companies provided information to their consumers,” says Steve Davis, founder of Bad Credit Lifeline.  “They are usually very discreet about the problems that can happen from payday loans, and thus have become seen as being predatory in the media.  Bad credit loans have very high rates, and must be paid back very quickly, but there many are instances where these loans can be a life savior to many people.  Many people would rather pay the high interest rates than lose their job or car
Bad Credit Lifeline explains the process of getting a bad credit loan, the interest rates involved, what happens if someone misses a payment, and the various other aspects of getting a short-term loan online.  The website offers instructional videos, and a matching service for people who need a loan immediately.  While the website is not the front for a lender, it does have the ability to put people in contact with payday lenders who are willing to assist with a temporary loan.
“My website exists because I understand that when you need money it doesn’t make things better to get a lecture or be told what kind of person you are,” says Steve Davis.  “Back then I was someone who needed a loan.  Today, I have the money to put up a website and help others.  There is no one type of person who needs an emergency loan.  That’s the truth.”
For more information on Bad Credit Lifeline, visit:


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