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Payday Loans Entrap the Most Vulnerable – Roll Call


Payday Loans Entrap the Most Vulnerable | Commentary

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By Galen Carey

As our economy continues to improve, there is a crushing weight holding many back: payday loans. While state and local leaders have taken up the cause in certain jurisdictions, this is a national problem that requires Congress to act. Unscrupulous lenders lure those who are already facing financial hardship into a debt trap from which it is very difficult to escape.

Drawn by slick marketing, desperate borrowers are induced to accept unfavorable terms they may not fully understand. The cost of a typical payday loan exceeds 300 percent annual percentage rate. By requiring full repayment from the next paycheck, payday lenders virtually guarantee that the borrower will be forced to ask for a new loan, with additional fees and interest, to pay back the old one.

This violates the underwriting standards applied to virtually every other type of loan. Payday loans perpetuate a cycle of debt, poverty and misery.

Three quarters of the fees payday lenders bring in come from borrowers, mostly low income, who have taken out 10 or more loans in a single year. More than half of all payday loans are renewed or rolled over so many times that consumers wind up repaying at least twice the amount they originally borrowed.

We have just come through the busiest season for payday lenders. Their ads promise an easy solution to the pressure of unbudgeted holiday expenses.

Parents understandably want to buy their children Christmas presents, and the lure of readily accessible extra cash masks a real threat to their financial health.

The reality is that a short-term loan almost always creates a debt that the borrower cannot repay in two weeks. Interest and fee payments balloon while the principal remains unpaid. The debt burden often continues long after the Christmas toys have been broken and discarded.

Last October, the National Association of Evangelicals addressed the devastating impact of payday loans with a resolution calling for an end to predatory lending. We are asking churches, charities, employers and government agencies to work together to help our members, neighbors and co-workers in ways that do not exploit them and lead to further misery. Other religious groups, including the Southern Baptist Convention, have made similar appeals.

The Bible prohibits usury, exploitation and oppression of those in need, and there is growing evidence that payday loans, as they are currently structured, often violate biblical justice. Predatory lenders who oppress the poor incur the wrath of God (Exodus 22:21-27). They should apply their expertise and resources to developing stronger communities rather than tearing them down.

Every family needs a rainy day fund to cover unexpected expenses from time to time. Churches should teach the spiritual disciplines of tithing and saving that position members to provide for themselves and generously care for others when special needs arise. It is our responsibility as neighbors and as churches to save and give generously, to provide the neediest among us with every possible opportunity to achieve and succeed. Churches, charities and employers should support households in their communities in times of crisis so as to prevent neighbors from being drawn into long-term debt.

In 2006, Congress passed bipartisan legislation capping the rates on loans issued to service-members at 36 percent annual interest. We need similar leadership from Congress today so that all Americans are protected from financial predators. The Consumer Financial Protection Bureau, an agency established to monitor the increasingly complex array of financial products offered to the American public, plans to unveil a new rule in coming months. We hope the bureau thoroughly investigates the payday industry and establishes just regulations and that Congress supports this process. State agencies should do the same. We need common sense guidelines such as requiring that loans be made at reasonable interest rates, and based on the borrower’s ability to actually repay.

Credit can change lives. It can be a source of opportunity or cause of devastation. How we use and safeguard this powerful tool is our choice. Caring for and lifting up our neighbors is our responsibility.

Galen Carey is vice president of Government Relations for the National Association of Evangelicals.

The 114th: CQ Roll Call’s Guide to the New Congress

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Loan sharks 'no longer just men threatening violence'

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They could be friends down the pub or a mum at a school gate – the truth is more subtle than most people think

Muscle-bound, male, and prone to threats of violence, is the public image of a loan shark.

The truth is more subtle.

Laura Derbyshire, money advice coordinator for Salix Homes, which manages Salford’s 8,000 council homes, says the extent of illegal money lending across the city is ‘huge’.

She said: “It is one of those taboo subjects that people don’t like to talk about. People might not realise they have taken a loan from a loan shark. it could be the mum you talk to at the school gates.

“The biggest impact is on people’s health. They are worrying about the knock on the door. It is so intimidating to not feel safe in your own home.”

“It could be a grandad, the friend down the pub you have known for five years.”

In March this year foster mum, Sandra Dawn Lowe, of Hulme, Manchester, was jailed for three years after being convicted of 16 counts of illegal money lending.

One victim ended up paying back £125,000 over seven years after borrowing £30,000.

Laura Derbyshire from Salix Homes

Special report: Loan sharks poised to strike in run up to Christmas

Alec McFadden of Salford Credit Union, said: “It is often a middle-aged woman – she will have back up – but she will be the one knocking on the door – offering the loan. There will be no advertising – just word of mouth on who to go to for a loan.”

Ms Derbyshire said: “Loan sharks will threaten to take a victim’s car, take their bank cards and demand the pin number, so when cash is paid into an account they get it first.

“They will say ‘I know where your kids go to school. I know the way they walk home’.

“Because historically people in Salford don’t like to grass, they could be shouldering the burden of a loan shark on their own for a long time.

“A lot of it goes unreported. I think the two recent court cases in 2010 and 2013 involving Salford loan sharks were just the tip of the iceberg.

“The biggest impact is on people’s health. They are worrying about the knock on the door. It is so intimidating to not feel safe in your own home.

“It is a growing industry and more needs to be done to educate people that it is criminal behaviour. We need to start educating people at high school level of the dangers of falling into this cycle.

“The most important thing is to ask for help. If speaking out is going to risk putting one of our tenant’s at harm we would look at moving them.

“We have a specialist money advice team so we can help our tenants find a way out.”

Case Study: Loan shark victim left on brink of suicide

Matthew faced a stark choice after two years where his life had been ruled by an illegal money lender.

He sat in his living room with enough painkillers on the arm of his chair to kill himself.

In his hand, was the phone.

“I am so glad I made that call. Without the Illegal Money Lending Team I would not be here today.”

“It was a choice between ending my life and calling for help,” said Matthew.

“I decided I couldn’t leave my family so I called the Illegal Money Lending Team.”

The loan shark who had led him to the brink of suicide was arrested and prosecuted.

Matthew’s slide into despair started with a £20 loan to buy his family food.

It got out of control until he was borrowing £200 every fortnight and paying back £300 – most of his benefits.

The spiral of debt ended with him borrowing £900 and being told he owed £3,000.

In an attempt to shake off the loan shark, he sold his car, went without food, and borrowed £2,000 from family.

The lender turned up at his home after midnight, banging on his door demanding cash, and threatened to put in his windows.

Then he made him sit petrified in the back of a car with ex-boxers either side while he threatened him.

Matthew called the lender ‘Dr Jekyll’ as he seemed helpful at first, having befriended his disabled wife. But he turned vicious when challenged about the payments.

He said: “I am so glad I made that call. Without the Illegal Money Lending Team I would not be here today.

“They never judged me. It was like getting an extra family who looked after me. They were in touch all the time to check I was OK and helped me set my finances straight.

“I cannot stress enough how important it is that anyone in the same situation as me makes the call. It’s best thing I ever did.”

Case Study: Elderly disabled couple were ripped off by loan shark

PENSIONERS Bob and Doris turned to a ‘friend’ when they hit severe financial trouble.

They had known Jody since she was 14, and trusted both her and her husband.

Living on disability living allowance benefits, they were struggling to pay bills and other debts.

They borrowed £18,000 from Jody’s husband. He told the couple, from Manchester, that the money was a bank loan he had secured.

But they never saw any paper work, despite asking for it.

The loan went up to £23,000, then £32,000.

Jody’s husband – a loan shark – just told them the bank added interest every April.

Doris went to the post office every Monday and drew out £250 to pay him.

Struggling emotionally with the trap she was in, Doris finally got help and the Illegal Money Lending Team stepped in.

Tragically, Doris was so used to paying out cash she asked her liaison officer how much it would cost for help, and was told it was free.

The loan shark had told Bob – who was very ill – that it didn’t matter who died first, he still wanted his money from the other one.

Investigators found that Doris and Bob had paid the loan shark £27,000 from their benefits over two years.

They visited the loan shark and his wife, and told them if they continued to collect money from the couple they would be arrested.

In 2013, the Birmingham-based Illegal Money Lending Team in England made 100 arrests, which led to 50 prosecutiuons.

It has 30 specialist investigators who move to an area once a suspected illegal money lender is identified.

An estimated 310,000 households in the country are borrowing from illegal money lenders.

The highest interest charged was calculated at 131,000 per cent APR.

Cash obtained by IMLT from loan sharks through Proceeds of Crime Act is ploughed back into campaigns to raise awareness of the issue.

In Salford, a music project was funded with cash confiscated from illegal lenders.

Salford Music Foundation’s song writing competition was one of five projects to receive funding.

The winning song ‘Bite The Hand That Feeds’ by singer/songwriter Dominic Williams was turned into a video to reflect the desperation of victims.

[…]

SBI cuts home loan rates 5-15 bps, offers uniform rate

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State Bank of India (SBI), the country’s largest lender, on Tuesday cut its home loan rates by 5-15 basis points to a uniform rate of 10.15%, making its loans the cheapest in the market for all new home loan customers.Irrespective of the quantum, women customers will get home loans at 10.10%. General customers can avail loans at 10.15% irrespective of the loan amount.Existing customers of the bank can avail of the rates after paying a nominal switch fee.One basis point is equivalent to one-hundredth of a percentage.Earlier, male customers could borrow up to Rs 75 lakh at 10.30% and women customers at 10.25%.A senior SBI official said, “We have lifted the slabs and made the rates uniform irrespective of the quantum of the loan. We will charge a nominal fee for existing customers who want to switch to the new schemes.”Experts said with corporate loan demand not reviving, banks are sitting on huge pile of cash which is forcing them cut rates on retail loans. SBI itself has excess cash of Rs 84,000 crore.With the Reserve Bank of India reducing the amount of money that banks are mandated to hold in government bonds in its monetary policy announced on August 5 and hopes corporate recovery dimming with the latest Supreme Court ruling cancelling the coal block allocation, retail loans will continue to be the focus of most banks, experts said.HDFC and ICICI Bank, the two other big players in the home loan market, recently cut rates to attract retail customers. HDFC, the second-largest mortgage lender, cut home loan rates to 10.15-10.65% for new salaried and self-employed professionals for loans up to Rs 75 lakh. The special rates are applicable for loans applied before August 31, and the first disbursement availed on or before September 30. For self-employed non-professional, HDFC charges higher rate of 10.25-10.75% for loans up to Rs 75 lakh.Earlier this month, ICICI Bank announced a single rate of 10.15% for all floating rate home loans up to Rs 5 crore for salaried individuals. For self-employed individuals, floating rate interest 10.15% for loans up to Rs 75 lakh and 10.35% for loans from Rs 75 lakh to Rs 3 crore. Women customers can get 10.10% for loans up to Rs 25 lakh.The new rate of interest is effective from August 14 for loans sanctioned up to August 31. The bank has also launched a 10-year fixed rate home loan product at 10.25%. […]

Beware fraudsters targeting the MoneyPak cash service

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There may be nothing new under the sun, but when it comes to crime there are certainly variations on old themes.

A cash transfer product called MoneyPak has attracted online fraudsters who use old schemes to scam their victims. The product, sold by financial services company Green Dot (GDOT), has come under attention from the Senate Special Committee on Aging, which last month held a hearing about scams targeting the elderly.

MoneyPak cards are targeted toward “unbanked” and “underbanked” Americans, or the 34 million households who lack bank accounts or who have some type of account but still rely on services such as check cashing. The reason why MoneyPaks have caught on with criminals is that they carry a 14-digit code on the back that provide access to money that customers have place on the product.

Play Video Fight Against Fraud New tool for fighting fraud: A credit card with its own keypad Dynamics CEO Jeff Mullen shows CBS News his company’s new invention: A password-protected credit card. Alexander Trowbridge reports.

In some frauds, the criminals impersonate a utility or law enforcement official and claim their target owes money. They then tell the victim to pay up by loading money on a MoneyPak and giving them the 14-digit number. That allows the criminal to gain access to the funds loaded into the product.

Other scams involve criminals telling their victims that they’ve been pre-approved to apply for a loan, but first they’ll need to make payments, which can be made through a MoneyPak.

The scrutiny on MoneyPak comes as more Americans are relying on pre-paid money cards. In 2011, consumers loaded $57 billion on prepaid cards, a number that is expected to reach $167 billion this year, according to the Consumer Financial Protection Bureau, which cites data from Mercator Advisory Group.

And it’s not only MoneyPaks that are targeted by criminals. Americans lost more than $73 million to impostor scams last year, the Senate Committee on Aging said.

Play Video MoneyWatch Sam’s Club offers chip card to prevent fraud Most U.S. credit cards use decades-old technology. It is easy to hack and leaves customers vulnerable to fraud, but now Sam’s Club is the first m…

While MoneyPaks aren’t pre-paid cards, they allow consumers to load up those cards with cash or add money to their PayPal account, without requiring a bank account. Consumers can also make same-day payments to companies with the service.

The 14-digit code is hidden under a scratch-off strip on the back of the card. That may be the service’s Achilles heel, since anyone gaining access to one of the codes can also get their hands on the money loaded on that card. Enter the fraudsters.

MoneyPak even warns consumers not to give out the code, cautioning in a red box around the scratch-off strip that anyone asking for the number could be scamming them.

The good news for consumers is that Green Dot is phasing out the service with a similar product called Reload @ the Register. The updated service eliminates the 14-digit codes and uses a “swipe” to load money for customers. Walmart (WMT) has already replaced its MoneyPaks with the newer service, the company said at the Senate hearing.

“Green Dot is committed to educating consumers about how to avoid becoming victims of financial fraud scams and has partnered with the Consumer Federation of America to help enhance these efforts,” Green Dot said in an emailed statement to CBS MoneyWatch.

It added, “Consumers should protect their MoneyPak numbers just as they would cash, and Green Dot makes vigorous efforts to remind consumers on the MoneyPak packaging and website never to give their information to a private individual, to someone claiming you have won a prize or lottery, or to pay for items purchased from classified ads.”

© 2014 CBS Interactive Inc.. All Rights Reserved.

[…]

When contemplating a payday loans despite the fact it can be alluring

Created By Ufghdfg Sdferff Ndfgdf – Be certain not to get beyond to suit your budget to pay back. For example ,, if he or she make it easier to obtain $1000 and put the car as collateral, yet you only require $200, borrowing far too much may bring about the loss of your automobile for those who are can not pay off your whole financing.

When working to attain http://www.lån-penge-billigt.com a cash advance just like any get, it is advisable to spend some time to search around. Various spots have blueprints that differ on interest rates, and satisfactory types of security.Try to look for financing that works well in your best interest.

Oftentimes people see on their own during a career from which they may have hardly any other solution than to get a payday advance. If you can circumvent this process, you could try your best to do so. Or perhaps associate that you can acquire from, look into asking them before turning to getting a pay day loan specialist, when you have a family member.

When researching a fast cash advance vender, investigate whether they definitely are a lead loan merchant or an indirect loan merchant. Special loan companies are loaning you their unique capitol, unlike an indirect mortgage provider is in the role of a middleman. An indirect bank has to get their trim way too, however the service is in all likelihood just as good. This means you shell out a much higher rate of interest.

Don’t just enter your drive and auto towards local cash advance centre to acquire a connection loan product. When you would possibly know exactly whereby they are really, verify the postings in the vicinity of your region for others that might have bring down percentage rates. Only a couple of a short time of scientific studies could save you big money.

Find out about disguised . prices. Who knows what a professional might possibly charge you until you speak to, therefore you are transparent about what you need to know. A lot of folks wind up owing in excess of they meant immediately after, they have already without a doubt agreed upon relating to the loan. Do your very best to avoid this by, analyzing all the information you are presented, and constantly questioning everything.

Have a look at other assets, before taking the plunge and choosing a payday advance. The interest charges for payday advances are substantial and for those who have improved choices, check out them first. Check if all your family will loan you the financial resources. Conversely, use a typical mortgage provider. Cash loans should really be considered an final option.

Pay day loans can help in desperate situations, but understand that you could be billed finance allegations may possibly equate to almost 50 percent interest. This tremendous interest rate makes repaying these lending options nearly impossible. The bucks should be subtracted starting from your income may possibly force you most suitable into the payday loan home office for lots more some money.

When evaluating a payday cash loan, you should not decide on your initial organization you find. Preferably, look at several statistics since you can. Even though service providers is only going to charge about 10 or 15 percent, many people would probably bill you 20 and also 25 %. Do your homework in order to find the most cost effective small business.

An important point for people acquiring payday cash advances will never be to lay within your application form. Lying with regards to your application form will be tempting to achieve a loan authorised or perhaps very high amount borrowed, yet it is, inreality and scam, and you could be charged criminally for doing this.

If you find yourself taking into account getting a lån på nettet fast payday loan to repay a unique type of think about, reduce and credit ratings regarding it. It could finally end up costing you greatly significantly more make use of this method about just paying for overdue-fee cost on the line of credit rating. You may be tied to investment allegations, application premiums besides other charges which are associated. Suppose very hard and huge when it is worth it.

Continuously have a look at other mortgage companies until now, choosing try using a online payday loan program. When you can obtain from a member of family, secured a financial institution loan product, and even a visa or mastercard, it is far better for ones pocketbook. The charges engaged in these other options are commonly a great deal less, as opposed to those for a payday advance.

Look into each of your possibilities. Any time you invest time to contrast some your own mortgages vs cash advance loans, you may find that there exists some financial institutions that, actually provide a stronger cost for online payday loans. All of it depends upon your credit track record, and how much cash you need to use. Scientific studies is likely to help you save a large amount of your money.

More often than not, you will need to have a nice checking account to get a online payday loan. The reason is , loan companies most commonly need you to authorize straight monthly payment on your checking account the afternoon the financial loan arrives. It will be taken as soon as your paycheck is slated that needs to be deposited.

Fees who are related to online payday loans are made up of a variety of sorts of costs. You will have to find out the interest rate range, penalty charges if there can be app and digesting expenses. These expenses will change anywhere between a number of loan merchants, so be sure you think about various creditors before signing any arrangements.

Take care going well over any kind of fast payday loan. Often, everyday people feel that that they may pay for on the next repay cycle, but their financing winds up taking greater and more substantial until they are departed with virtually no funds arriving using their income. They happen to be identified within the pattern just where they http://www.lånpengeudensikkerhed.com/lån-med-lav-rente are unable to pay up it to come back.

You must are aware of the reimbursement words, before you take out a fast payday loan. These loans offer high interest rates and tough fees and penalties, and also fines and deals only amplify for anyone who is delayed making a check. Prior to now 100 % critiquing and learning the phrases to avoid these complaints, you should not acquire a loan.

[…]

Small Business Week Brings Special Loan Programs, Incentives from CDC Small Business Finance

SAN DIEGO–(BUSINESS WIRE)–

In celebration of National Small Business Week (May 12-16), entrepreneurs can take advantage of special SBA financing programs offered by CDC Small Business Finance to buy their own building, expand their company and create jobs.

SBA Green Loan – this financing program provides higher lending amounts for small business owners who want to buy or upgrade commercial/industrial buildings and make them more energy efficient. Buildings over $20 million can be financed using this unique program offered jointly by a bank and CDC Small Business Finance. Small business owners need only demonstrate a projected 10% reduction in energy costs by deploying one or more energy-saving improvements (e.g. insulation, lighting, heating/air conditioning).

VetLoan Advantage Loan – military veterans who own small businesses can save up to $3,000 with this program. Incentives apply to several types of loans:

SBA-504 loans are used to purchase commercial/industrial buildings. Vets can take advantage of a low-down payment (typically 10%), long-term fixed rates (now 5.07%). CDC will issue a cash rebate up to $3,000 for any funded loan to help veteran owners offset loan expenses. Community Advantage loans provide up to $250,000 for working capital, equipment, inventory, tenant improvements and business acquisition. CDC will waive the packaging fee for veterans, a savings of up to $2,500. SBA Microloans provide up to $50,000 for working capital, equipment, inventory, tenant improvements and business acquisition. CDC will waive the 2% loan fee for veterans, a savings of up to $1,000.

“The doors are now wide open to small business owners who want to grow and expand their businesses,” said Kurt Chilcott, president/CEO of CDC Small Business Finance.

The SBA-504 loan program offers additional advantages, including:

Cash preservation Tax savings No balloon payments

To qualify for an SBA 504 loan, businesses must be:

Owner-operated For profit Organized as a sole proprietorship, corporation, partnership or LLC Have a business net-worth below $15 million and a net-profit after taxes below $5 million within the last two operating years Community Advantage is an excellent loan choice for new and existing businesses that need between $20,000 and $250,000 in business capital. The loan can be used to start or expand a business. The SBA guarantees a portion of each loan. This allows CDC to make loans that may not be available through banks. To be eligible, applicants need to show their ability to repay the full loan amount and meet other guidelines.

Small business owners can find out if they qualify for a loan by using the company’s Prequalify Today tool. For more information call 800.611.5170, visit www.cdcloans.com or check CDC on Twitter @CDC_Loans and LinkedIn. To see short videos of small businesses that have benefitted from SBA loans, go to: SBA Success Stories.

CDC Small Business Finance, a non-profit, is the nation’s leader in providing SBA-504 loans to small businesses, including those that have traditionally struggled getting access to capital. Over 30 percent of CDC’s loans go to women-, minority- and veteran-owned small businesses.

In 36 years, CDC has helped more than 10,000 entrepreneurs buy their own facilities, expand their businesses and create nearly 130,000 new jobs.

Note: Media interested in interviewing small business owners who have received SBA-504 loans to purchase a building can contact Larry Nuffer, 619.243.8620, lnuffer@cdcloans.com.

Small BusinessesBusiness Contact:

CDC Small Business Finance

Larry Nuffer, 619-243-8620

lnuffer@cdcloans.com […]

Reverse mortgages: Easy money or dumb move?

Faced with rising medical expenses and longer life expectancies, many seniors are turning to their single largest asset as a source of supplemental income: their home.

Indeed, reverse mortgages enable seniors who are 62 and older to convert a portion of the equity in their home into cash without having to sell.

As the name implies, such loans are structured as the mirror image of a regular mortgage. The lender makes payments to you in either a lump-sum amount or in monthly installments based on a percentage of your home’s appraised value. Eligible homeowners can also set up a reverse mortgage as a line of credit, providing access to emergency funds on an as-needed basis.

The money received can be used to pay off your existing mortgage loan and halt your monthly payment, supplement your retirement income, finance a home-improvement project or pay for health-care costs.

(Read more: Plan for financial independence, not retirement )

And the balance, including interest and financed closing costs, need not be repaid until you sell your home, no longer use it as your primary residence or pass away. Another perk? Proceeds are generally tax-free.

Yet such loans, while potentially solving a host of problems for retirees who are house-rich but cash-poor, also come with some pretty significant risks.

“Reverse mortgages are a useful tool for some people,” said Lori Trawinski, senior strategic policy advisor with the AARP Public Policy Institute. “They can enable retirees to age in place, but we always emphasize that these are loans, and as such, borrowers have obligations.”

Among those obligations, borrowers must stay current on their property taxes, homeowners insurance and any homeowner’s association dues and assessments. They must also keep their home well maintained. Failure to comply can send the loan into default and result in a foreclosure, according to Trawinski.

The amount you owe on a reverse mortgage also grows over time.

Interest is charged on the outstanding balance and added to the amount owed every month. Thus, your total debt increases as the loan funds are advanced to you and interest on the loan accrues.

(Read more: How do porn stars plan for retirement? )

That means fewer assets left in your estate to pass along to your heirs, which may not matter if you don’t intend to preserve your assets for future generations, said Marla Mason, a certified financial planner and vice president of Presidential Brokerage.

“If you plan to live out your life in your house and you don’t care about leaving a legacy behind, the reverse mortgage is a very valid option,” she said.

However, Mason explained, these loans come with a lot of fees.

The maximum origination fee allowed for a federally insured reverse mortgage, formerly called a Home Equity Conversion Mortgage, or HECM, is 2 percent of the initial $200,000 of the home’s value and 1 percent of the remaining value, with a cap of $6,000, according to the National Reverse Mortgage Lenders Association.

You will also owe a mortgage insurance premium fee based on the amount of funds withdrawn during the initial year. That fee is 0.50 percent of the appraised value of the home if you take no more than 60 percent of the amount available in the first year, and 2.5 percent if you take more than 60 percent of the available amount. On a $200,000 home, 2.5 percent amounts to $5,000, and 0.50 percent is $1,000.

(Read more: CNBC audience gets importance of retirement planning )

You will also owe a mortgage insurance premium annually, which accrues over time when the balance comes due. The annual premium is equal to 1.25 percent of the outstanding loan balance.

There are also appraisal fees, which vary by region but average around $450. If the appraiser determines that your house requires repairs, you will be required to complete the repairs as a condition of approval, as well.

Finally, there are closing costs, which are comparable to those of any mortgage loan and often amount to about $1,000. Some lenders will also charge a $35 monthly service fee for the life of the loan, but most have dropped that fee, according to Trawinski.

“These loans can be expensive,” she said, noting it all depends upon how much you borrow initially. “If you take out a lot of money upfront and exit the home in a very short period of time, it can be a very expensive way to borrow money.

(Read more: How to grow your 401(k) at any age )

“But if you borrow less and stay longer, the costs amortize over time, so it’s comparatively less costly,” she added.

Reverse mortgage loans come in three flavors: single-purpose reverse mortgages, which are offered by some states, local government agencies and nonprofit organizations; federally-insured reverse mortgages (HECMs); and proprietary reverse mortgages, which are private loans backed by the companies that develop them.

According to the Federal Trade Commission, single-purpose reverse mortgages are the least expensive option, but they’re not available everywhere and can be used for only one purpose, which is specified by the lender. The lender might indicate, for example, that the money can only be used to pay for home repairs, improvements or property taxes.

HECMs and proprietary reverse mortgages can be more expensive than traditional home loans, and the upfront costs can be high.

The amount of equity you can borrow in a reverse mortgage depends on your age; the type of reverse mortgage you select, such as lump sum, monthly payments or line of credit; and current interest rates. In general, the older you are, the more equity you have in your home and the less you owe on it, the more money you can take out, according to the FTC.

Other sources of cash
Before taking out a reverse mortgage, homeowners should consider alternatives, said Sean Keating, a certified financial planner and principal and founder at Patriot Financial Advisors. (All borrowers, in fact, must complete government-approved counseling before they can qualify for a HECM loan.)

For those with the means to pay off a home-improvement project or pricey dream vacation over the course of a few years, it’s generally less expensive to take out a home-equity loan, which involves only an appraisal fee and closing costs and does not deplete the value of your estate. The interest you pay is also generally tax deductible.

(Read more: Forget flashy cars and save up instead )

Seniors who assume a regular home-equity loan, however, must be prepared to make monthly payments until the loan is repaid.They should also be aware that failure to meet their home-equity loan obligations could result in the loss of their home.

Cash-strapped homeowners who are using a reverse mortgage as a last-ditch effort to hang on to their home should also think twice, Keating said.

“When an older couple cannot afford to live in the home anymore, getting a reverse mortgage will only delay the loss of the house and will leave them with no assets,” he said.

Better to sell the house and downsize, move in with a family member, take on a roommate or explore whether one of your adult children might be willing to purchase the family house through an installment sale, Keating added.

“The kids may not have a lump-sum payment to buy the house outright, but by making monthly installment payments, their parents get to stay in the home, collect a monthly income and the kids eventually own the house so it preserves that asset for the next generation,” he said.

Well-heeled homeowners with a highly appreciated home may benefit the most from a reverse mortgage, according to Keating.

(Read more: 50-somethings find growing nest egg gets easier )

Rather than using bond ladders to create consistent income-a strategy in which bonds’ maturity dates are evenly spaced to enhance liquidity-they can instead keep more of their money in higher-growth equities and use a reverse mortgage line of credit for living expenses during the months or years when the market is down. A more aggressive equity allocation also protects against longevity risk or the chance of outliving your savings.

“That way, you’re not pressured to sell in a down market,” said Keating, noting such strategy only works for homeowners with enough equity to cover one or two years’ worth of living expenses if necessary. “When the market rebounds, you can take out the amount of money you were expected to withdraw from your stock portfolio and pay back the reverse mortgage loan.”

Many state and local governments also offer low-interest and low-cost deferred-payment loans for improving or repairing your home that function like a reverse mortgage.

(Read more: Spoiled for choice? Less is more )

When mining your home for money, be aware of the fees you’ll pay, the impact on your estate and any alternatives that might be a better bet. At the end of the day, the math must make sense.

“For people who have a need for cash, reverse mortgages can be a useful way to access funds without having to sell their home,” Trawinski said. “But you are also spending down your equity, and the balance of your loan continues to grow, so it’s a good idea to think about alternative programs and sources of cash.”

-Shelly K. Schwartz, Special to CNBC.com

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Payday loan colorado | Payday Loan and Cash Advance!

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This entry was posted in Uncategorized on March 12, 2014 by . […]

Cash Store Financial Provides Ontario Update – Cash Store Financial Engages Chief Compliance and Regulatory Affairs …

EDMONTON , Feb. 27, 2014 /CNW/ – The Cash Store Financial Inc. (“Cash Store Financial” or the “Company”) (TSX: CSF: NYSE: CSFS) today announces that it has created the position of Chief Compliance and Regulatory Affairs Officer (the “CCRO”). The CCRO reports directly to the special committee of independent directors (the “Special Committee”), which was appointed to review and respond to regulatory developments in Ontario and to evaluate strategic alternatives.

Cash Store Financial is pleased to announce that it has engaged Michele McCarthy to act as CCRO and to fulfill the mandate described below. Ms. McCarthy is an experienced senior executive with experience in numerous roles with global financial services companies. She has previously had mandates which included Chief Legal Officer, Chief Privacy Officer, and Chair of the Board of Directors at significant public and private corporations.

The mandate of the CCRO will include the following responsibilities:

Ensure that the Company and its affiliates (collectively, the “Cash Store Group”) are in compliance with all federal and provincial legislation, regulations and regulatory directives (the “Governing Legislation”); Ensure that all documents used in the business of the Cash Store Group are compliant with Governing Legislation; Develop procedures to identify, assess and communicate internally any changes or proposed changes to Governing Legislation; Foster a constructive relationship between the Cash Store Group and its regulators; and Oversee and assist business units within the Cash Store Group in the resolution of compliance issues.

Cash Store Financial further announces that it is engaging in ongoing discussions with its Ontario regulator in an effort to address the regulator’s concerns regarding the issuance of a lender loan license to the Company and its subsidiaries under the Payday Loans Act, 2008. Ms. McCarthy will lead these discussions in her role as CCRO while the Special Committee continues its review of strategic alternatives.

About Cash Store Financial

Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (CSF.TO). Cash Store Financial also trades on the New York Stock Exchange (CSFS). Cash Store Financial operates 510 branches across Canada under the banners “Cash Store Financial” and “Instaloans”. Cash Store Financial also operates 27 branches in the United Kingdom .

Cash Store Financial and Instaloans primarily act as lenders and brokers to facilitate short-term advances and provide other financial services to income-earning consumers who may not be able to obtain them from traditional banks. Cash Store Financial also provides a private-label debit card (the “Freedom” card) and a prepaid credit card (the “Freedom MasterCard”) as well as other financial services, including bank accounts.

Cash Store Financial employs approximately 1,900 associates and is headquartered in Edmonton, Alberta .

Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name “Cash Store”. Cash Store Financial does not do business under the name “Cash Store” in the United States and does not own or provide any consumer lending services in the United States .

Forward-Looking Information
This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of United States federal securities legislation, which we refer to herein, collectively, as “forward-looking information”. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “estimates”, “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will be taken”, “occur”, or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cash Store Financial, to be materially different from those expressed or implied by such forward-looking information, including, but not limited to, changes in economic and political conditions, legislative or regulatory developments, technological developments, third-party arrangements, competition, litigation, risks associated with but not limited to, market conditions, and other factors described under the heading “Risk Factors” in our Annual MD&A, which is on file with Canadian provincial securities regulatory authorities, and in our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. We do not undertake to update any forward-looking information, except in accordance with applicable securities laws.

SOURCE The Cash Store Financial Services Inc.

FinanceInvestment & Company Information Contact:

For further information, please contact:

Gordon Reykdal, CEO, at 780-408-5118, or
Peter Block, NATIONAL Public Relations, 416-848-1431

[…]

Payday Loans Great For Valentine's Day | Payday Loas Turbo

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Celebrate Valentine’s Day

A large percentage of the population anticipates Valentines Days, whether dating or already married. In fact, for most people this is a much-awaited event for couples, probably why most women expect to be surprised, wooed, and dined by their partners and this practice can absolutely put pressure on someone low on cash. Fortunately, you can easily get a payday loan.

Many payday lenders stress the importance of payday loans during holiday, but only a few believe that it is necessary to obtain a loan just to celebrate Valentine’s Day since they do not consider the occasion as an emergency. But of course, when you want your partner to be happy then why other people think do not matter since what is important is what your partner will think of you.

By the way, there are people that consider the occasion, as just another commercial propaganda of many businesses, which is why spending substantial amount on Valentines’ Day is a waste of money. But as said again, when you are in a relationship spending small amount on the special day is just necessary. Why do I think so, well it’s because, you are:

Strengthening your relationship with your partner and this is priceless; Creating memories; and Investing in your future happiness, something that money cannot buy.

These loans are not just for Valentine’s Day, but also wonderful for all occasions, such as:

Pay of your most pressing obligations; Improve your credit score (when you pay back the loan on time or earlier); and Tide you over until the next payday.

Borrowing money for Valentine’s Day is not a bad idea, most especially when you are just borrowing a small amount to celebrate the occasion. Come to think of it! Payday loans for Valentines are not a bad idea when your purpose is to make the most important person in your life happy.

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