All Articles Tagged "loan"
Too many relationships have been torn asunder over money. As a result, lots of people have personal rules about lending money to family and friends in order to avoid the heartache and turmoil that can come with the transaction. The most common rule: “I don’t lend money to family or friends.”
But what is a friend or family member for if not to lend a helping hand to a loved one in need? In these tough economic times especially, when some are struggling to find a job, living week to week, or trying to pay down debt that may have accumulated during a rough patch, having someone to call on can be a godsend.
U.S. News & World Report lists some of its tips for loaning money to friends and family that is focused on a big amount changing hands, such as the down payment for a house. “Family and friends will often provide loans at a lower interest rate than banks, and the deal enables borrowers to avoid additional fees tacked on by traditional lenders,” the story says.
If you’ve got a friend or family member that can lend that kind of money, good on you. The people looking for a few hundred bucks or less, however, is probably the bigger proportion of the family/friend loaning that’s going on.
These cases should be treated much the same way: have clearly defined rules for when this money is going to be paid back and put it in writing if possible.
And communicate. Oftentimes, it’s not the money that causes issues. It’s a miscommunication that makes the person doing the lending feel like they’re being take advantage of. Or the person who has asked feels terrible about being in need and would prefer not to talk about the loan any more than they have to. Lay everything out in one comprehensive conversation where you talk about the terms of the loan and what each person expects.
And that’s where the explaining should end. Once you make a loan, it’s not your job to become that person’s financial manager. You lay out the terms, come to an agreement, and then wait to get your money back at the appointed time. The person taking the loan should adhere to what you’ve discussed. But giving a loan doesn’t mean you were invited into that person’s wallet.
Finally, if you’re the one doing the loaning, let this be your mantra: Don’t lend money that you can’t afford to lose. There’s always the possibility that the person who’s getting the money can’t get it back to you at the time they promised, if at all. Maybe they fall into even more dire straits; maybe they’re just irresponsible. If you’re giving someone your rent money or mortgage payment, you’re asking for trouble. If you can’t do it, you simply can’t.
Summer’s over in less than a few weeks. The vacations are coming to a close and we’re putting away the bikinis and 50 Shades of Grey. And with the end of summer comes the back-to-school season for many. It’s time to pull out the syllabi and textbooks for another school year.
Whether you are going back to college or attending college for your freshman year, here are a few tips and reminders of how to get prepared.
Double-Check Your Financial Aid Packet
Financial aid is the gift that keeps on giving. Log-in to your college Web portal and make sure your financial aid packet meets all of your needs like your tuition, housing and meal plan. If there are discrepancies, follow-up with your financial aid office quickly to ensure your grants and loans are situated.
Main piece of advice: Get a firm mattress — to store money in! End of story.
Just kidding. Saving for rainy days is a great rule of thumb. Think long-term. For example, before you buy that house or lease that car, think about where you will be in five years. Leasing a car means you will still have to pay it off before it’s yours. If you choose to buy, the cost may have been more comparable if you had just purchased the car originally. Having a house means insurance, property tax, repairs and more. But renting doesn’t invest your money into anyone’s pocket besides your landlords. There are many large and small decisions to consider in the scheme of the future.
(Wall Street Journal) — Every year, business owner Jim Fab lends his 25 employees as much as $4,000 interest-free for personal expenses they can’t afford up front, ranging from down payments on homes and cars to funeral and legal fees. Most pay him back – eventually. “I had a guy send me $300 a month for three years after he quit,” says Mr. Fab, whose electrical-contracting company, Fab Electric Inc., has been in operation in Gaithersburg, Md., since 1978.
(CNNMoney.com) — As the economy begins to mend, the cost of borrowing money for a big purchase could start to increase.
Mortgages, in particular, have flirted with record lows during the recession. Credit card rates have been bouncing upward and, while auto loan rates are expected to stay low for a little while longer, they can’t stay low forever.
The Obama administration Friday said its mortgage modification program continued to make progress, with the number of homeowners receiving permanently reduced monthly payments in February increasing by 45% to 168,708.
An additional 91,483 three-month trial modifications have been approved by the companies servicing the mortgages and were awaiting acceptance by the borrowers, the Treasury Department reported. Though the numbers continue a steady increase in recent months, only about 15% of homeowners who have started trial modifications have had them made permanent.