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Hulk Hogan By the Numbers

April 15, 2014 | Loans | No Comments

HULK HOGAN INFOGRAPHIC
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Do’s and Dont’s of Payday Loans

February 26, 2014 | Loans | No Comments

If you’re in the market for a California payday loan, you’ve probably realized already that you have a number of options. However, just because they’re broadly available doesn’t mean they’re always easy to use. There are some distinct strategies you should be using if you want to make use of payday loans, both for optimal returns and your own financial security. The following are some simple tips to keep in mind if you want to move forward with a payday loan.

First of all, you absolutely need to get clear on the interest rates and conditions that apply to the loan. You may be approaching the loan with the idea that you’ll pay it back within the week, but it’s still important to know what the conditions of the loan are. If something blindsides you and keeps you from paying your loan back, you need to know what you’re getting into. In that circumstance, you’ll have enough on your plate to worry about already.

Following that, you’ll want to look into the terms and conditions that surround getting an extension. This isn’t always going to be available. Some states require that there be an extension process. Some companies allow it on their own terms. Either way, you need to understand what it takes to qualify. Not qualifying for their extension process doesn’t rule out the use of a loan, but you should still know whether or not you could apply for one if you needed to. Conditions allowing for an extension usually relate to your employment or ability to provide collateral, rather than your credit rating.

It’s very important that you don’t plan to pay off a loan with another loan. This isn’t a sustainable process, even if it seems to be. Sooner or later, the interest will catch up to you. It’s best to have a backup plan if something might prevent you from paying off a payday loan, as this can prevent your finances from suffering even further as you try to keep up with your debts with more debts.

There are proper ways to manage a payday loan to make them work for you, but they require you to keep yourself informed and on top of the situation. Always do your homework and your due diligence when you choose a payday lender, and be sure you have a backup plan in case things go sour. Don’t leave anything to chance.

Lending Club vs. Prosper – The Top 2 Social Lenders

October 4, 2011 | Investing | Loans | 3 Comments

The two biggest players in Social Lending (also known as Peer-to-Peer Lending) are Lending Club and Prosper.  If you are seeking to invest in Social Lending, you may wonder what the differences are with both companies.

But first if you are not familiar with Social Lending, Social Lending are online communities connecting people so they can loan and borrow money from each other thus eliminating the middle man, the bank. Because the bank is eliminated, lenders and borrowers can lend and borrow money at better interest rates for both parties with extremely low fees. 

Major Differences Between Lending Club and Prosper

Both Lending Club and Prosper are now very similar.  In the past Prosper used an eBay auction style where the interest rates are set by lenders via a bidding process. Lending Club sets the interest rate based on a formula and lenders and borrowers have to accept the rate. There is no bidding.

Prosper decided to change their business model and now operate just like Lending Club.  Now Prosper sets the interest rate and loan grade based on a formula which takes into account  Prosper Rating, Expected Loss Rate, Loan Term, Economic Environment and Competitive Environment.

Lending Club sets interest rates for the borrower and lender based on the borrower’s credit score and other financial parameters. A loan grade is then established which takes into consideration Assumed Default Rate, Lending Club Base Rate, and Adjustment for Risk and Volatility.

Investing at Lending Club

Since Lending Club started in mid 2007, the net average annualized return for investors has been over 9.5%. That is a fantastic rate of return! Lending Club average borrower has a FICO score of 713. The required minimum FICO score is 660. Individuals and organizations can be lenders. Lenders invest in loans called “notes”. (Note: Currently Lending Club is offering a 2% Cash Bonus on your initial investments.)

Requirements to becoming a Lending Club Investor:

  1. Must be U.S. residents of states where Lending Club does business which includes California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Minnesota, Missouri, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming, and is not available or sold to residents of any other state, the District of Columbia, any other territory or possession of the United States, or any foreign country.).

  2. Must have a bank account to transfer money to bid on loans.

  3. Must be at least 18 years old with a valid Social Security Number.

  4. A minimum of $25 is required to open an account.

  5. Individual lenders who are residents of states other than California or Kentucky must have an annual gross income of at least $70,000 and a net worth (exclusive of home, home furnishings and automobile) of at least $70,000; or have a net worth of at least $250,000 (determined with the same exclusions).

  6. California residents must (a) have an annual gross income of at least $85,000 and a net worth of at least $85,000 (exclusive of home, home furnishings and automobile); (b) have a net worth of at least $200,000 (determined with the same exclusions); or agree not to invest any more than $2,500 in Notes if you do not meet either of the tests set forth in (a) or (b).

  7. If you reside in Kentucky, you must qualify as an “Accredited Investor”. See website for further details.

  8. Lastly, regardless of your state of residence, individuals may not purchase Notes in an amount in excess of 10% of their net worth, determined exclusive of the value of an individuals home, home furnishings and automobile.

Borrowing at Lending Club

Lending Club is very selective with accepting borrowers. Borrowers at Lending Club get loans for a variety of reasons (paying off credit card debt, purchasing a car, consolidation of debt, education, home improvement projects, wedding, small business, elective surgery, balance transfers, etc..)

All Lending Club loans are:

  • Unsecured 3-year (36 months) or 5-year (60 months) fully amortized personal loans.

  • Have a fixed interest rate for the life of the loan and is typically lower than rates offered by credit cards and banks.

  • Monthly payments are fixed, and can be automatically deducted from the borrower’s bank account.

  • Borrowers can pay the loan in full early with no penalty.

  • No hidden fees

To qualify borrowers need a FICO score of at least 660 with a debt-to-income ratio (excluding mortgage) below 25%. Additionally, credit history must prove that you are a responsible borrower:

  • At least 1 year of credit history, showing no current delinquencies, recent bankruptcies (7 years), open tax liens, charge-offs or non-medical collections account in the past 12 months,

  • No more than 10 inquiries on your credit report in the last 6 months,

  • A revolving credit utilization of less than 100%, and

  • More than 3 accounts in your credit report, of which more than 2 are currently open.

  • Must be US citizens or permanent residents and at least 18 years old.

  • Have a valid bank account and social security numbers

Loans are issued by WebBank, an FDIC insured Utah chartered industrial bank located in Salt Lake City, Utah.

Investing at Prosper

Prosper Investors invest their money directly to people. Prosper charges a 1% annual loan servicing fee which is already taken into account in the rate investors bid on. Investors have access to each borrower’s credit history and why they want the loan. Prosper rates borrowers which help investors make informed decisions. Additionally, Prosper offers investors portfolio pans to help with automating the bidding process. (Note: Currently Prosper is offering a 2% Cash Bonus on your initial investments.)

Requirements to becoming a Prosper Investor:

  • Must be U.S. residents of states where Prosper is currently available (California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maine, Minnesota, Missouri, Montana, Nevada, New Hampshire, New York, Oregon, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin and Wyoming.)

  • Must have a bank account to transfer money to bid on loans

  • A minimum of $25 is required to open an account

All Prosper loans are:

  • Unsecured 1-year, 3-year and 5-year fully amortized personal loans.

  • Have a fixed interest rate for the life of the loan and won’t change for any reason, even in the event of late payment.

  • Monthly payments are fixed, and can be automatically deducted from the borrower’s bank account.

  • For finalized loans there’s a one-time closing fee.

  • Borrowers can pay the loan in full early with no penalty.

 There are three ways to invest:

  • Search for individual loans and manually invest by clicking “Invest Now” from any loan
  • Use Quick Invest
  • Invest in Notes on Prosper’s trading platform

 

Quick Invest allows you to efficiently invest in a group of loans. You specify the Prosper Rating and any other selection criteria and Quick Invest will find loans that meet your criteria, so you maintain control of your investments. A diversified loan portfolio may enable you to spread your risk among many borrowers, so consider investing in small amounts across many loans.

Borrowing at Prosper

If you are looking for a personal loan, Prosper can get you a loan via person-to-person lending, eliminating the bank. If you are looking to buy a car, consolidate debt, pay for education, have a wedding, remodel your kitchen, etc., Prosper is a place to get a fixed rate loan with a very competitive interest rate.

All Prosper loans are:

  • Unsecured 3-year fully amortized personal loans.
  • Have a fixed interest rate for the life of the loan and won’t change for any reason, even in the event of late payment.
  • Monthly payments are fixed, and can be automatically deducted from the borrower’s bank account.
  • For finalized loans there’s a one-time closing fee.
  • Borrowers can pay the loan in full early with no penalty.


Risks for Investors

Unlike a bank, when you invest in loans, your money is not FDIC insured. Only when your money is in cash in your account is it FDIC insured by both Lending Club and Prosper. Keep in mind this is investing and not a savings account. There are risks involved. The main risk is for lenders having borrowers who default on their loan.

For more information visit Lending Club and Prosper. Currently Lending Club is offering a 2% Cash Bonus and Prosper is also offering a 2% Cash Bonus on your initial investments.

Related Articles:

 

The 10 Best Jobs for College Students to Reduce Debt

October 13, 2010 | Financial Tips | Guest Post | Loans | No Comments

With tuition, books, room and board, transportation, and all the rest, the costs can really add up. Having a job during this time can help you cover some, if not all of these costs, and hopefully keep debt to a minimum. Here are some options for jobs that are often well suited to students and might offer an opportunity for employment at or near your school or maybe when you go home for the summer.

1. Bartender: Taking on the role of bartender while away at school might not be for everyone, but the money can be good and the work exciting and entertaining. Depending on the state or location in which you attend school, you may or may not have to be 21 years of age to serve alcohol. It you do end up at as a bartender, you may find that several hours of work here and there on the right days and at the right times (Friday and Saturday nights are often most busy at many bars, especially on college campuses), can have you raking in some pretty good money.

2. Waiter/Waitress: Similar to bartending, working as a waiter or waitress could have you making some serious cash while minimizing the number of hours you work. Often, the key to making good wages at this type of work (besides providing good service) again may depend upon the restaurant at which you work as well as the days and times you work.

3. Golf Course Employee: Many college campuses have golf courses in close proximity to campus and that may be associated with the school itself. Working at a golf course in a position at the pro shop or in concessions may provide a pleasant, often relatively stress free environment that might offer a lot of down time that could allow for a bit of studying. This type of work can also make for a good summer job.

4. Delivery Driver: If you have available transportation while away at school, you might consider working as a delivery driver. Depending on the type of food being delivered, you could make decent money. The downside to this type of work is that you will need reliable transportation, which will come with the usual associated costs (insurance, upkeep, etc.), and how much money you make may largely depend on current gas rates and customer tips. On the upside, there is typically a lot of this type of work in college towns during the school year.

5. Work Study Program Through School: Work study can provide a variety of roles that allow you to make money while still keeping an eye on your studies. Consider checking your school’s Internet website to search for available work study program opportunities.

6. Lifeguard: While the pay may not always be great as a lifeguard, it could make for a nice break after an exhausting school year. Depending upon the geographic location in which you attend school or live during the summer, this could be solely a summer gig, or it could be an opportunity for five or six months in a warmer climate, or even all year long if you work at an indoor pool. This job can be a great way to stay in shape and help others.

7. Coach: If you’re into sports, you might find that coaching could be a good way to earn money for school. Whether it is by way of coaching baseball, basketball, soccer, tennis, golf, swimming, etc., there could be a variety of options that might meet with a sport skill that you have.

8. Summer House Manager: If you are a member of a fraternity, being the summer house manager (if your house remains open over the summer) could be a great way to live rent free or receive discounted rent over the summer. You might serve as the summer caretaker with duties involving tasks such as cleaning, cutting the grass, general maintenance and repairs, and similar activities.

9. Internship: While an internship might not make you much money toward paying down college related debt, it could help you earn at least a few bucks. More importantly, if you can get an internship related to your degree work, it could provide valuable experience for getting a better paying job after school that could help you pay off your school related debt more quickly.

10. Zoo: The zoo can be a fun and relaxing environment in which to work during school. This work however may be seasonal, and more zoo positions may open up as summer nears and the zoo heads into its peak season.

Tom Becker works at Money Choices, a comparison service where you can compare savings accounts and keep track of interest rates.

What is Social Lending?

January 17, 2010 | Loans | 1 Comment

Social Lending (also known as Peer-to-Peer Lending) are online communities connecting people so they can loan and borrow money from each other thus eliminating the middle man, the bank.  Because the bank is eliminated, lenders and borrowers can lend and borrow money at better interest rates for both parties with extremely low fees.  The current major players are Lending Club and Prosper.

Both Lending Club and Prosper are very similar except that Prosper uses an eBay auction style where the interest rates are set by lenders via a bidding process.  Lending Club sets the interest rate based on a formula and lenders and borrowers have to accept the rate.  There is no bidding.  

A borrower at Prosper offers a maximum interest rate; however, the interest rate can be reduced if enough lenders bid on the same loan.  Lenders who bid on a loan must offer the lowest interest rate they are willing to accept.  The offered interest rate is not disclosed to the borrower or other lenders.  As more lenders bid on the loan, the interest rate will be reduced.

Lending Club sets interest rates for the borrower and lender based on the borrower’s credit score and other financial parameters. A loan grade is then established which takes into consideration Assumed Default Rate, Lending Club Base Rate, and Adjustment for Risk and Volatility.

Unlike a bank, when you invest in loans, your money is not FDIC insured.  Only when your money is in cash in your account is it FDIC insured by both Lending Club and Prosper.  Keep in mind this is investing and not a savings account.  There are risks involved.  The main risk is for lenders having borrowers who default on their loan.

For more information visit Lending Club (Lenders / Borrowers) and Prosper (Lenders / Borrowers).  You can discuss social lending at Social Lending Forums.

Lending Club Offering Low Interest Car Loans

November 16, 2009 | Loans | No Comments
lending-club-auto

Lending Club is offering very low interest rate for car loans.  Rates are starting as low as 7.89%.

Lending Club allows you to borrow from $1,000 to $25,000 as an unsecured loan that can be used for any purpose such as debt consolidation loans, housing and home improvement loans, auto loans, home and small business loans, student loans, etc.

Lending Club is only available to United States residents.  To qualify borrowers need a FICO score of at least 660 with a debt-to-income ratio (excluding mortgage) below 25%.  Additionally, credit history must prove that you are a responsible borrower:

At least 1 year of credit history, showing no current delinquencies, recent bankruptcies (7 years), open tax liens, charge-offs or non-medical collections account in the past 12 months,
No more than 10 inquiries on your credit report in the last 6 months,
A revolving credit utilization of less than 100%, and
More than 3 accounts in your credit report, of which more than 2 are currently open.

To see if you qualify for a loan visit LendingClub.com.

Facts About FHA Loans

October 12, 2009 | Loans | No Comments
FHA-loans

Back in the days of no-money-down lending most people bypassed using a government-insured Federal Housing Authority (FHA) loan, which allows borrowers to purchase a home for as little as 3.5% down payment.  

With today’s real estate market, FHAs are the only alternative for buyers who cannot afford the minimum down payment of 10% that many banks now require for a conventional loan.

According to a Zillow.com survey, about one-third of buyers have 10% or less saved for a down payment.  As a result, FHA loans have increased dramically from 3% to 25% of the loan market.

Below are some facts about FHA loans:

  • FHA loans are not only for low-income borrowers.  There is no cap on what a borrower earns.
  • The max loan is $271,050 in areas where real estate is cheap, $729,750 in expensive markets such as California and New York.
  • Thorough appraisals are required for FHA loans by the government.  Sellers must fix all issues before a buyer can close on a FHA loan.
  • Nominal interest rates for FHA mortgages are comparable to conventional loans; however, there is a 1.75% upfront charge and a 0.5% annual insurance premium for 5 years and until the principal balance hits 78% of the sales price or the home’s appraised value.
  • FHA mortgages now only takes a few days longer that conventional loans to close.
  • FHA loans require written documentation of income which includes pay stubs and tax returns.