Wages have been in stagnation and decline since the 1970s, something the Paycheck Fairness Act would have done nothing about. Image: CC Jack Photos/Picasa Web Albums

The Paycheck Fairness Act was blocked by a Republican filibuster in the U.S. Senate this week. The Paycheck Fairness Act was a measure aimed at enforcing equal pay for women in the workplace. But data shows that while men make more than women on average, wages for men are declining faster than for women and wages in general have stagnated for 20 years.

Paycheck Fairness Act aims at wrong target

The standard Republican argument against the Paycheck Fairness Act was that it amounted to more big government meddling in private business decisions. However, in the last three years wage growth for all middle and low-income workers in the U.S. — not just women — has grown at less than half the rate it did before the Great Recession. Median wages for both men and women actually shrank in the year ending in June. Wages for men without a high school diploma and men with bachelor’s degrees both lost ground. Wage declines have affected access to credit for these demographic groups. To borrow money, they increasingly rely on short-term credit provided by the cash industry in the form of  installment loans and unsecured personal loans.

The lost decade

Wage stagnation for U.S. workers began long before the Great Recession. According to a Washington think tank called the Economic Policy Institute, the economy expanded from 2002 to 2007 but wages fell. Wages improved in the early part of the decade on the momentum of the booming 1990s. But after the 2001 recession they never recovered. The gradual decline has affected just about everyone but the super-rich. Both high school graduates and college graduates made less in 2009 than they did in 2000.

The fruits of labor

As wages have declined, worker productivity has increased, leaving employees with little leverage for demanding a better deal. Labor economist Heidi Shierholz told MarketWatch the assumption that productivity and wages increase together started changing in the mid-1970s. With no real wage growth, Americans maintained their lifestyles by spending their savings and increasing their debt. The house of cards finally collapsed when the housing crisis nearly destroyed the U.S. financial system. Wall Street escaped unscathed and is earning more than ever. Meanwhile, middle and lower-income spending power continues to shrink.

Sources

MarketWatch

Huffington Post

Seattle Times

Wells Fargo is going to be chopping 3,800 jobs along with the Finance Division. Image from Flickr.

After acquiring Wachovia Bank and taking heavy losses from subprime mortgages, Wells Fargo has announced that it will be shutting down its Finance Division. This move will chop about 3,800 jobs from the 14,000 person division. Wells Fargo will still offer line-of-credit loans and other financial products — just not through a separate division.

Wells Fargo Finance Division

In existence for the last 100 years, the Wells Fargo Finance Division has been separate from Wells Fargo banking services. The Finance Division has been responsible for providing small loans, large loans, auto financing and mortgages. The Finance Division currently holds about $24.7 billion in real estate loans, and all but $1.5 billion is considered subprime. The division lost about 4.62 percent of value in the first quarter, which is about on-level with other major lenders.

The Wells Fargo merger with Wachovia

In 2008, Wells Fargo started a merger with smaller lender Wachovia Bank. This added branches for the conglomerate bank but also brought on additional liabilities. There are about 6,600 branches of Wells Fargo/Wachovia banks and an additional 2,200 Wells Fargo Home Mortgage offices. The takeover of Wachovia was forced by government regulators, who wanted to ensure that Wachovia bank would not fail. Formally, Wachovia was dissolved on March 20, 2010.

Wells Fargo to continue lending

Though Wells Fargo is shutting down its Finance Division, it has announced that the bank will still provide services for customers who are borrowing money. Auto loans and fast personal loans will now be offered inside Wells Fargo branches. The company does still intend on offering mortgages, but rather than subprime offerings, FHA-backed loans will be the focus. These federally backed housing loans are less likely to default, in theory. The current $14.7 billion in auto loans and $7.6 billion in unsecured personal loans will continue to be serviced by the company. The move is intended to cut operating costs and “streamline operations.”

College students already use federal student loans to pay for everything from tuition and books to housing. Image from Flickr.

Tucked inside the health care reform bill that congress passed on Sunday was a bill that will reform the student loan system. Focused mainly on how student loans are administered, the student loan bill will create $61 billion in savings over 10 years. Of those savings, $30 billion will be put back into education, while another $10 billion will go to deficit reduction. Banks and financial institutions will no longer act as the money lender on these loans — instead, the Department of Education will administer the loans.

Student loan bill changes administration

The biggest change that the student loan bill will implement is in how the student loan program operates. Currently, Congress sets eligibility rules, interest rates and most of the rules about how student loans are administered. The Department of Education then works with lenders like Sallie Mae and colleges to help students apply for the low rate personal loan.

The lending institution then distributes money to the school. The lending institution receives subsidies from the government for providing this service. The student loan bill will simply cut out government subsidies for lending institutions. Instead, the Department of Education will act as the lending institution. Just by cutting out subsidies, the government will save approximately $6.1 billion a year.

Reinvesting in education through the student loan bill

With the savings of the student loan bill, the Department of Education will be able to reinvest about $30 billion back into education. According to the student loan bill, this money will be used to increase the maximum Pell Grant, which is used to help low-income students pay for college. The bill will also reduce the monthly payments that some students have to make on their loans, which will help make college more affordable for more people.

Criticisms of the student loan bill

Even though this bill saves the government billions of dollars a year and reinvests in education, there are criticisms. The costs of college have been rising at double-digit percentages each year, and the increase in the Pell Grants will not come anywhere close to covering that increase in cost. There are also fears that by cutting out the loan industry, the government will effectively be cutting jobs. However, most estimates say that comparatively few — if any — jobs will be lost, as the government will need to hire personnel to administer the loans. Finally, some worry that interest rates on these unsecured personal loans will begin to rise. However, the student loan bill does not change the fact that Congress sets the rules, eligibility and interest rates for student loans.

Sources:

Columbia Spectator
Campus Progress
The New York Times

Christmas is here and it can be costly

Many buyers are looking for unsecured personal loans to get them through the holiday season. Despite discounts and specials, consumers are going to have shortfalls in budgeting. The easiest way to manage the holidays is to understand the tactics retailers use to draw you in. Here are some tools they use and how to avoid them.

Debit-card fees

Debit cards are convenient. They act just like credit cards, but they withdraw directly from your savings account. Normally any store that takes credit cards will take your debit card. With debit cards there are no high-interest rates to deal with so many people believe that they are safe buying options. Though it may sound like the easy thing to do, but be sure to check with your bank’s policies regarding transactions.

One thing to check for is your bank’s over-limit purchases procedures. In the past, a debit card would automatically be declined for purchases over the available balance. Banks are changing that policy. Now you can still make an over-limit purchase, but the bank charges you the overage amount and an additional fee that can range anywhere from $25 to $40. If you go to various stores and make numerous over-limit purchases, you can be charged the fee for each one.

If you are making a big purchase, it’s best to pay with credit and then pay the full balance off at the end of the month. Credit cards offer a lot of added protection in terms of identity safety and disputing retailers over charges. If you have to make small purchases and know that you have enough to cover the purchases, then a debit card will work just fine.

Watch out for sales

Everyone knows how sales can attract customers. Black Friday and Cyber Monday are both huge sales days for retailers. Although their specials may sound nice, the reality is that a lot of them are nothing more than ways to get you into the store. Many retailers feature a limited-quantity product and once it is gone, they have a backup product ready. That equitable backup is notably higher in price. If you come to the store with a limited budget from savings or from an unsecured personal loan, you may be disappointed. The best way to protect yourself is to first do some research. Find the item you are looking for online and compare prices at various retail and online outlets. If the item is notably lower at one retailer, it most likely is not worth your time.

The extended warranty

Almost every retailer will try to up-sell you with the extended warranty. Appliances, electronics and machinery are all high-ticket price items. You may be spending thousands on them and retail outlets will try to get a couple extra hundred dollars in special extended warranties. They will tell you how any repairs for a year, for example, will be free of charge. Though extended warranties seem like good ideas, large items normally come with manufacturer warranties already. The best thing to do is do research and find out how long the manufacturer warranty is. Most likely it is at least for one year and it’s free with purchase.

Don’t be fooled by gift cards

Gift cards are convenient. You walk into a store and pay for the card. Then the user can use the card like a limited debit card. Unfortunately more and more companies are attaching fees to gift cards. Some cards come with processing fees, activation fees, expiration dates, transaction fees and inactivity fees. Another concern with gift cards is that according to a recent study, 25% of people who received gift cards, still hadn’t used them a year later.

The easiest way to avoid all the fees is to pay cash. Almost everyone remembers receiving cash in a check from relatives when they were a child and it makes sense to go back to that method of gift-giving. If you need a gift card though, there is a way to avoid fees if you do some research. For example, American Express announced recently that it would no longer impose fees on any gift cards, but it would still charge $3 to $7 to buy one.

Managing during the holidays

Managing sales during the holiday is important. The bottom line is that retailers want to get you into their stores by any means necessary. Competition pushes them to create discount advertisements that work on customers. If you have a limited budget from savings, credit limits or unsecured personal loans, you have to be smart about your spending.

Apply here for a Personal Loan

Unsecured personal loans saved a hefty portion of consumers throughout the 2008-2009 recession. Many people who believed that they were safe financially got a wake up call when the economy took a turn for the worse. They realized that financial tools they used in the past quickly became irrelevant. Lenders closed their doors to everyone except their premiere customers. Home values declined severely putting people in even more debt. It was a difficult time and it is first now that consumers are seeing some hope that the market will return to normal. One thing that many people recognized, however, was the need to educate themselves and their children on how to manage money. With an unstable economy, it’s imperative for people to be ready with tools to manage and pass those tools onto the next generation of consumers.

Things to teach children regarding money

The next generation of savers and investors need to be taught the general rules of managing money. It’s no doubt that the global market is shifting and it will be critical for young people to be able to make wise decisions. Here are some tips to follow:

1) Educate children on the value of the dollar. When children are in school they learn about reading, writing, and arithmetic. Most of their schooling is centered on the basics of maneuvering value, but unless they delve deeper into the field of finance when they get older, that’s the only education they will get on the topic. “It’s sad how we teach children about binomial functions, something few will ever carry into their adult lives, but neglect finance, something they will need every day for the rest of their lives,” said Mike Mooney, of BankRate.com. It’s up to parents to education children on life’s fiscal challenges.

2) The sooner the better. Anyone who has seen a retirement savings schedule knows how time is key to maximizing money. If children can be taught that value of saving, they can also be taught the value of starting a savings account early. Mooney also said, “Children need to be taught to develop strong saving habits, learn how to make smart purchases, begin to understand the true meaning of ‘investment’ and why delayed gratification is number one when it comes to money.” Education should begin with simple topics like how to save, but then move on to more complex issues as a child ages. Things like payday loans, car loans and investments need to be addressed when children are ready.

3) Mom, dad, and money. Most children think that money comes from their parents. It isn’t until they push too far with buying that they get an explanation of the hard work involved in earning money. It’s best to teach children right away that work means compensation. Small chores are the best way to teach value. As a child grows, bigger compensations can be given for bigger responsibilities.

4) Saving is exciting. One of the best tools to use is teaching children that saving money is a good thing. Piggy banks, shoe boxes and all the old tools are the most appropriate for young children. Older children and young teens can use bank accounts to be introduced to financial institutions and how they work.

Making sense of money

Mixing money with a recession is a formula for financial confusion. No one knows the future or what the economy will be like when today’s children are adults. It’s best to teach children from the beginning about saving, investing, unsecured personal loans, mortgage loans, stocks, and credit. Taking their training step by step as they age is the easiest way to empower them financially for the future.

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Some parents are trying to fund their children’s college tuition with unsecured personal loans. Mary Eggertt, mother of two college students in Ohio, said, “Personal loans are bridging the gap for us financially. …We don’t have a lot of savings, and when a bill comes up, we don’t have a lot of other options.” Eggertt is just one of millions of parents looking for ways to fund their child’s education. It’s estimated that the average private college costs about $30,000 a year and an in-state public university can cost $12,000 annually. With numbers like this, average people will have problems putting their child through college.

Despite the problems of funding college, is it a good idea for parents to stretch their budgets to make payments? Experts are weighing in on the issue and giving a lot of advice concerning why parents should not make funding college their primary reason for saving.

Retirement needs to come first

Sure children’s education is important, but when parents are continually putting off their own saving to fund it, there is a problem. Financial experts cite that there are no loans for retirement. If a parent reaches their retirement years without necessary funds, they could see their golden years quickly diminish. When it comes to college, kids will be able to get loans to fund it if necessary. There are also scholarships, grants and part-time jobs. Also, psychologists argue that having a child personally invested in their education makes them more appreciative and serious about studies.

College savings funds

There are a lot of options for saving for college, but not all of them are reliable. First of all, if parents use these education funds, there are few investment options. A lot of funds pay interest only, and some don’t allow owners to invest. Parents can’t use an education fund to invest in real estate, for example. That may bring a higher return than the education fund would. If putting money into other investments brings a higher rate of return, parents may only need a few small unsecured personal loans to cover the gap.

On top of being inflexible when it comes to investing, education funds are also difficult because of their reliance on tax code. Tax rules change from year to year and it’s difficult to gauge a parent’s income in five years. There have been many cases of parents having income that is too high for them to be eligible for tax advantages they were expecting to use. Gail Prittman, Financial Aid Director at Cornell said, “Too many parents want to do everything they can to start a college fund for a child right away. The problem is that predicting the future just isn’t possible.”

Other education options

While it’s nice to say your child went to an Ivy League school, is it really worth it? There are no guarantees in college funding that say if a child has a Harvard education they will find the perfect cushy job. Overall experts are telling parents to save for themselves first, and then move onto their children’s college funds. Worst case scenario there won’t be enough for children to go to the college of their choice, but there are options. They can get jobs, work at the college for a discount, use unsecured personal loans, get scholarships or start off at a less costly college.

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Financial disaster may come knocking, but that doesn't mean they have to be a permanent houseguest. There are personal loans, you know. (Photo: flickr.com)

People are using unsecured personal loans to fight their way out of debt. The recession wreaked havoc on finances—both business and personal. Consumers are still regrouping and trying to dig their way out of the aftermath of the economic downturn. Many people suffered huge losses including bankruptcy, foreclosure and divorce. Here are some ways to mitigate the consequences of each one.

Life After Bankruptcy

Kevin Chem, president of Total Attorneys in Chicago, said, “Only by doing a detailed analysis of your debt-to-income ratio and your ability to impact a change in your expenses or income are you going to get an idea of whether you should consider bankruptcy.” These days bankruptcy isn’t as negative a word as it once was. In fact, experts agree that filing for bankruptcy can sometimes be a better option for building credit than continuing to struggle. Chem added, “If you are borrowing money constantly from family in order to pay your bills or if you are getting notices of garnishments on the job, it may benefit you to look into bankruptcy.”

If you do go through a bankruptcy, your slate is clean. Once your debt is eliminated you may be in a better position in terms of your credit health. You won’t be a prime candidate for the best rates, but you will be able to get some credit. The best way to fix your finances after filing bankruptcy is to stop spending. Experts suggest that filers need to realize that what got them in trouble in the first place was over-spending and they need to be willing to stop. Chem adds that people should get some form of secured credit and start building a credit history right away. It’s the best way to bring scores up.

Life after Foreclosure

According to the Mortgage Bankers Association’s National Delinquency Survey, about 13 percent of mortgage loans are currently in foreclosure status, or at least one payment past due. Of course if you are past due, it’s best to call your mortgage company and discuss options as soon as possible. Most companies have loss mitigation departments that focus on helping homeowners in financial distress.

If you end up having to go through a foreclosure, there are also some things you can do to help your credit. Foreclosure will show up on your credit report for seven years, but its impact will lessen with time.

Michael Kay, Certified Financial Planner in New Jersey, said, “People who are in the midst of foreclosure can only see the problem and they can’t see a solution. Because they are just so invested in those feelings of failure, disappointment, and shock, the first thing I would say is acknowledge that you are where you are. Then get into offensive mode. Stop wallowing in misery. Yes, it is a bad situation, but let it go and commit to moving forward from where you are.”

Though you are in a financial difficulty, you still most likely will be able to get credit, unsecured personal loans and other lending aids if you are careful. Figure out why you fell behind and do an honest assessment of what happened. Then commit to changing your ways and start building credit little by little.

Divorce Thrown into the Mix

Divorce is another issue that many people are going through as a result of the financial stresses of the recession combining with marital stresses. One of the biggest concerns with divorce is the huge legal cost, but there are ways to mitigate it. First, try to divorce amicably. For the best options, try to come to resolutions on your own. Lisa Rosenberg Moore, family law attorney in New Jersey, stated, “You are being billed at an hourly rate and every hour you sit on the phone with your lawyer starts to add up.” The best thing to do according to Moore is to focus on how to best create a financial solution for your children and money, rather than focus on hurt feelings.

Getting Through Difficult Times

In the end, financial and family disasters have the ability to alter lives greatly. Though bankruptcy, foreclosure and divorce are difficult to maneuver, there are ways to manage. Be sure to be honest and take a look at what created the situation, then commit to altering your habits. With some intentional and proactive work, you should be able to qualify for credit cards, unsecured personal loans and mortgages sooner than you think.

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Consumerism is American. Free market capitalism and payday loans are all part of necessary competition, despite what critics would have you believe. (Photo: flickr.com)

If media and banking industry critics of payday lending are to be believed, payday loan outlets are perched in the reeds, muscles coiled in anticipation of springing upon unsuspecting consumers. “Predatory lending” is the fallback term such misinformed critics use, under the assumption that people who use payday loans are tricked or somehow lured into doing so. Yet ample evidence exists that indicates that payday loan customers are educated and take time to consider their options before choosing the short term loan product.

Understand Who Uses Payday Loans

Edward Lawrence and Gregory Elliehausen studied who uses payday loans and why in their April 2008 Contemporary Economic Policy article “A Comparative Analysis of Payday Loan Customers.” Using a national survey that takes into account numerous payday loan outlets belonging to industry trade association the Community Financial Services Association (CFSA), the authors reach beyond the veil of anecdotal evidence as they interview 427 payday loan customers from the survey. Rather than finding an uneducated, unsophisticated group that is being victimized against their will or better judgment, Lawrence and Elliehausen found that payday loan customers consider their decisions carefully and weigh the cost of payday loans against other costs both monetary and environmental.

Consumers, Consumption and Debt Burden

Consumer credit fills a definite need, particularly for segments of society without a great deal of liquid assets at their easy disposal and a significant debt burden. Building upon Juster and Shay’s 1964 study “Consumer Sensitivity to Finance Rates: An Empirical and Analytical Investigation,” where consumer credit is seen to be used on household durable goods, and multiple studies that suggest that such a method is financially feasible when the rate of return is high, Lawrence and Elliehausen point toward a model where high interest payday lending may be optimal for certain consumers. The conditions under which the authors see this would be the case are “relatively high-return investment opportunities, low current income and strong preferences for current consumption.”

Yes, We Live in a Consumer Culture

Americans see it as their right (and their curse) to “keep up with the Joneses.” When this behavior is left unchecked, personal debt can spiral out of control. Thus, when consumers look to short term loans like payday loans to handle financial shocks, they do so in large part because they do not have the liquid assets available to handle their debt obligations in lump sums. Creditors know this, so they tend to limit the amount of credit they extend so as to protect themselves from default. Unsecured personal loans are available from payday lenders to make up the difference. They are available at a cost that the authors find consumers are more willing to swallow than more expensive or socially taboo alternatives.

The Rise of Rationed Borrowers

The authors refer to the Juster and Shay study in stating that borrowers constrained by their debt loads are “rationed” borrowers. Juster and Shay theorize that rationed borrowers are “in early family life-cycle stages where rates of return on household investments would be high.” Their income would be low to moderate, which would explain the small amount of liquid assets available. Furthermore, their demand for consumer credit would be connected less to interest rates and more to the general lack of standard credit available.

That’s the way Juster and Shay saw it in 1964, 45 years ago. Things have changed a great deal since then. Creditors have a greater technical facility for assessing and pricing risk, say Lawrence and Elliehausen. The requirements for equity have lessened and the time for short term loans to reach maturity have lengthened. Unsecured credit through bank-issued credit cards has also become more readily available. There is a “subprime credit card market” for today’s rationed borrowers, but there are other alternatives that do not deal so heavily in the constant spiral of revolving debt. Payday loans have been a prime alternative for rationed borrowers.

NOT Preying Upon the Elderly

Some critics of payday loans claim the industry preys upon the elderly. However, numerous recent studies indicate that young and middle-aged consumers have contributed to an increasing demand for short term loans. Their drives are somewhat different, as Lawrence and Elliehausen’s findings show. For the young, their demand for payday loans has been predicated on how quickly they can pay off their short term loans (seven to 20 days is standard) and hence regiment their budget, whereas middle-aged  consumers’ demand is more in tune with obtaining better interest rates.

Budgetary Discipline

This sense of maintaining a budget in the face of environmental pressures resonates through various other studies. Katona’s “Psychological Economics” (1975) indicates that consumers “may be reluctant to increase credit card debt because they fear that they will not have the discipline to make payments on the additional debt.”In this case, Lawrence and Elliehausen hypothesize that consumer use of payday loans via a standard contract may be expensive in a traditional sense, but if the alternative is increased vulnerability to higher debt or even an inability to access credit, the short term loans are preferable in the long run.

Survey Says

Payday loan customers surveyed by Lawrence and Elliehausen tend to break many of the stereotypical notions spread by critics of the industry. They are not in fact poor; just over half had family incomes between $25,000 and $49,999. Considering that having an active checking account is a requirement for obtaining a payday loan, unbanked households (generally lower income) are not being exploited by such short term loans. In terms of age, two-thirds were under 45 years old, with more than one-third under 35. Only 10 percent were 55 or older, so clearly the elderly is not being targeted. Family situations indicated more than half were married or living with a partner, and 65 percent of respondents had children under 18 years of age living in the household. These are young families with debt loads who are attempting to deal with financial shocks as best they can. Now that America is in a recession, I’m sure that if Lawrence and Elliehausen conducted their survey today, the numbers would continue to support this idea.

Do They Have Other Options?

The survey indicated that a whopping 91.6 percent of payday loan customers do rely on other types of consumer credit at times. However, considering the finding that payday loan customers are less likely to use revolving credit like credit cards, one would think that they find an advantage in using the more regimented payday loan model. I would offer that it is precisely that budgetary discipline discussed earlier that makes payday loans more appealing for these rationed borrowers.

Of course, having other credit options tends to go hand-in-hand with the potential for a greater debt burden. As such, the authors’ survey found that 73 percent of payday loan customers had been turned down or limited in their ability to secure other types of loans over the past five years. Payday loans become a necessity during financial emergencies if other options are limited. In fact, two-thirds of respondents claimed they used payday loans due to unforeseen financial events.

Making Informed Decisions

Lawrence and Elliehausen found that respondents to the payday loan survey tended to follow cognitive models suggested in other consumer credit studies. Specifically, they go through a process where they recognize need, gather details, consider options, decide and then evaluate how it went in the aftermath. As the majority of consumers in the survey appeared educated (the majority were high school graduates or had college experience), it would stand to reason that payday loan customers tend to display cognitive ability and efficiency. In the case of details like APRs and finance charges, greater education tended to equate to greater awareness (where such factors were considered important in the decision-making process).

Young Families Who Consider Options Carefully

Lawrence and Elliehausen’s findings speak to the financial realities facing many American families. They’re just starting out, their wages are not yet high and they don’t have many liquid assets lying around for a rainy day. Used in a non-habitual fashion, payday loans help absorb financial shocks during times of financial difficulty. They give consumers “a little control over their financial affairs they otherwise would not have,” write the authors. Is it any wonder then that customer attitudes toward payday lending were positive in the survey? There is peace of mind in being able to handle one’s own affairs. Since the majority of those surveyed did not show signs that they were using payday loans beyond the fashion for which they were intended, why is it that the government should be so gung-ho to step in with heavy regulation and taxation? By stymieing competition in a free market economy and restricting payday loan availability, aren’t they harming both consumers in need and their own capitalist system?

She's looking for instant cash without the hassle. She's looking for unsecured loans. (Photo: picasaweb.google.com)

Most people want to find a way to borrow money easily; unsecured loans could be the ideal solution to this problem. Almost everybody needs to borrow money at some time in their life. Borrowing money is seen as a very normal thing to do. This is because we sometimes need to spend more money than we can afford at a certain moment in time. Everybody has credit cards, mortgages and personal loans. These are used to supplement your income and make it possible to buy large purchases up front. If it wasn’t for our ability to borrow money, then few people would be able to buy a house, car or cope with any unexpected expenses.

Coping with Emergencies

An emergency by nature is something that you know nothing about. This means that you don’t have time to prepare for it and this can put a real strain on your finances. One of the most common reasons why people need to borrow money using personal loans is because they experience an unexpected emergency. A financial emergency can strike at any time and be caused by a variety of things. You might need to repair your car, house or plumbing. Whatever you need the money for, unsecured personal loans could be the answer to your prayers.

Low Risk

There are two main types of loan; these are secured or unsecured loans. Most personal loans are of the unsecured variety and thus a much lower risk. Your mortgage is an example of a secured loan, and this is where the loan is secured against the equity in your home. Few people like the idea of putting their personal assets at risk in order to borrow money. Using an unsecured personal loan is a fantastic option for many people because there is much lower risk. You don’t need to worry about using any of your assets as collateral. However, this doesn’t mean that there won’t be consequences if you fail to repay the loan.

Finding a Loan

These instant unsecured personal loans are actually quite easy to come across. There are many different lenders who are more than happy to lend money to anyone who is trustworthy. There is no security for the lender if you default on the loan and so the lender will first inspect your credit rating to decide whether or not to lend you the money.

How Much You Can Borrow

The amount of money you can borrow will depend on the lender in question. Typically you can borrow less money than with secured loans. It’s normally possible to borrow up to $5,000 with these unsecured personal loans. It’s not just banks that you should talk to about personal loans. There are many other companies who can assist you to get the best deal possible.

Instant Cash

Many of these online unsecured loans companies are able to instantly decide on your application and then the money will be transferred to your account as quickly as possible. As long as you are over 18, employed and have a bank account then you shouldn’t have a problem applying for one of these loans.

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Improper punctuation can be dangerous. Image from Flikr.com.

National Punctuation Day is a holiday like no other. Unlike most holidays that are invented seemingly out of the blue, National Punctuation Day wasn’t created as a business promotion.

It’s sort of like Talk Like a Pirate Day. It doesn’t make anybody any money. It doesn’t spread publicity for a business. It is simply there for people to celebrate something they love. You don’t need an unsecured personal loan or any other form of financing to celebrate National Punctuation Day.

Either you’re in, or you’re out

National Punctuation Day simply exists to encourage writers, editors, other types of wordsmiths and lovers of the printed word to celebrate properly used punctuation, rather than complaining about, correcting and berating others for incorrect punctuation. Of course, they will still do that, too. They can’t help it. But today, we celebrate as well.

You see, some humans are afflicted with a very real condition that causes them to feel extreme anxiety when they see misplaced punctuation. This may manifest itself through a physical reaction, such as tightening of the chest or gritting of the teeth. Similarly, some with this condition will go to great lengths to remove the offending punctuation from their sight or alter it if possible. Others exhibit auditory responses, such as heavy sighs, general angry noises or yelling punctuated with profanity.

Then there is everyone else — the “normal” people. They do not even notice improperly used punctuation and often misuse it themselves.

More manifestations of condition

I have a “friend” who once stopped following her acquaintance’s Twitter account because he purposely misused both “your” and “you’re” in the one tweet. He clearly does not understand the seriousness of this condition. She was so angry she decided to stop following him. She didn’t even tell him.

That friend later realized, as much as she hated to admit it, that apostrophe misuse was not worth ending a friendship over. This same friend once saw a sandwich board sign on the sidewalk that had a misplaced apostrophe. Fortunately for the business owners, the wording on the sign was made of stickers, so she simply peeled off the offending apostrophe and continued in her travels feeling relieved and lighthearted.

Celebrate National Punctuation Day

Some grammarians may choose to celebrate National Punctuation Day in this manner, correcting any improper usage of punctuation they can reach. However, many people who have the above described condition do things like this on a regular basis. The same friend who peeled the sticker off the sign once altered every copy of a poster in her favorite bar because they were missing  apostrophes.

None of these incidents happened on National Punctuation Day. Being offended, angered, saddened and irritated by incorrect punctuation is an everyday occurrence, especially as communication becomes more and more text-based, thanks to Facebook, MySpace, Twitter, text messaging and instant messaging. Thus, I think National Punctuation Day should be a day of celebrating correctly used punctuation, something we grammarians often take for granted.

Celebrating good punctuation

For instance, my friend once wrote a Facebook status that contained a semicolon. In response, one her her friends commented: “Way to go with using a semi-colon. I don’t think I could do that to save my life!”

I think this is an excellent way to celebrate National Punctuation Day. So just for today, pay extra attention to your own punctuation. Also, seek out proper usage of punctuation and give compliments, preferably in a public forum such as a Facebook wall or MySpace comments. Also visit The “Blog” of “Unnecessary” Quotation Marks, and have a good laugh.

Thanks to the government’s giant stimulus program, many Americans seem to be feeling a little better about their finances. Despite rising unemployment, personal incomes still rose 1.6 percent in May, according to the Commerce Department. But instead of heading back to the mall with that extra cash most Americans are making a beeline for the bank.

The U.S. savings rate recently reached 7 percent of disposable income – the highest it’s been since early 1990s. In the short term, such penny-pinching could delay economic recovery by suppressing demand. But in the long run it’s a good thing. It means families are working to reduce high debt levels, rebuild retirement accounts, and be better prepared for financial emergencies without resorting to unsecured personal loans.

Interest rates are down

Unfortunately, interest rates on most savings products are currently very low. Interest on savings accounts typically tracks the Federal Reserve’s funds rate, and right now that’s hovering between zero and 0.25 percent—its lowest level ever. One-year bank CDs are a slightly better option, recently yielding about 2 percent on average. Think twice, though, before committing to any period longer than that. “Short maturities give you the ability to reinvest so you can continue to stay ahead of inflation once rates and inflation perk up,” says Bankrate.com’s Greg McBride.

Treasury Inflation-Protected Securities are an attractive option over the longer term. Uncle Sam pays a fixed rate – recently 1.25 percent – plus an “inflation kicker.” If consumer prices go up, your principal will be supplemented.

Slightly higher online

A few banks are paying decent interest on checking and savings accounts, but you have to play detective to find them. Many smaller banks offer “rewards” checking accounts yielding 4 percent or higher in order to attract customers. But as Daren Fonda said in SmartMoney:

Does that make them a good deal? That depends. You can usually find a slightly better rate online, especially at one of the Internet-only banks that don’t have to pay tellers or other branch expenses and can pass on the savings. But the gap has narrowed as Internet banks have started to focus more on profitability than growth. “We’re getting as much money as we need,” says James Kelly, chief operating officer of ING Direct, the largest online-only bank, explaining why ING’s rates aren’t higher. Indeed, ING is now trying to get customers to branch out from basic savings to other services such as checking accounts and mortgages.

There’s only so much banking you can do with the click of a mouse, though. Most online-only banks have limited services, so you have to go elsewhere for extras like lines of credit or auto loans. Firms like ING Direct and Discover Bank don’t have their own ATMs, and customers may be charged fees if they want to withdraw cash from another bank’s ATM. Cashing a check can also be a hassle with a branchless bank. Customers either have to go through a traditional bank or mail in the check.