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February 29, 2012

Getting a Loan: 4 Reasons To Stick To Your Current Bank

When you are in the market for a new loan, there are a number of things you need to take into consideration when making your comparisons. With so many different lenders and loan products however, this comparison can be stressful, time consuming and confusing – but unfortunately it needs to be done because a loan is definitely not a financial product you want to get wrong. The wrong loan can be costly, it can be frustrating, it can put your security at risk and you can be stuck with it for many years.

Fortunately there is a way to make all of these comparisons a little easier. You can’t and shouldn’t avoid spending the time comparing loans, but what you can do is make the comparisons you need to with your current bank, and save yourself some time and save your sanity.

1 – Type of loan

Each lender will offer a number of different loans, but most lenders will specialise in a certain type of loan. Whether a lender is a small business specialist, a teacher’s credit union or a financial institution which specialises in bad credit cases, they will have these specialities to allow them to better understand and cater to their particular client, and offer more comprehensive services for their target customer.

If you can find a lender who specialises in your type of loan, then you will save yourself time in the approvals process because you won’t apply to a high profile lender when you need a bad credit specialist for example, who can offer you alternative verification procedures. Similarly, if you are a small business owner, you want to be dealing with a lender who is a specialist in low doc loans.

Therefore, when you first applied for your current loan, transaction or savings account you should have sought out a lender based on your needs and the type of product you were after, as well as the type of person you are. As a result, your current bank should already be perfectly matched to your needs and situation, and should therefore be the perfect financial institution to tailor a loan to your needs.

2 – Staff

When there is a problem with your account or you have a question you don’t want to be endlessly on hold and you want to speak to someone who will listen and be able to help you. If you already have a number of accounts with a certain lender you will know the level of customer service you receive and whether your questions are answered promptly and easily.

It is also important for a bank to have a well qualified loan officer on their staff who is able to look at your situation and tell you upfront whether you will qualify for a loan, and whether there is anything you can do to improve your chances of approval. If you already have a loan with your current bank then you will have dealt with the loan officer previously, and they will know your financial history in detail. This can help reduce the perceived risk to the bank of lending you more money, as they can see the intricate details of your loan history and how reliable you are with your repayments.

Going back to the small business example, if your current bank is a small business specialist, they will also likely have a small business advisor as part of their staff. Having specialist staff to meet your needs means you can discuss exactly why you need the loan, and your goals for your business, to make sure that a loan is the right option.

3 – Access

Successfully managing your finances means always knowing what is going on with your accounts. Therefore, whether you prefer to check your balances online, on your smart phone, by calling the phone banking number of popping into a branch on your way to work, you will have established routines with your current accounts. This not only means you can stay on top of your accounts, but it also means you know the best ways to avoid unnecessary fees.

Even if you are getting a loan with your existing bank you will likely have to go into the branch to complete the paper work, and this gives you a chance to discuss your loan needs. However, there is no doubt that online banking is much faster and convenient than a branch visit could ever be, and by applying for a new loan with your current lender you don’t need to learn any new online banking systems, or remember any new online banking passwords, because you can access all of your banking products in the one place.

4 – Reputation and relationship

The reason word of mouth advertising is so successful is because it is devoid of any marketing hype or spin, and simply tells the true story of a real personal experience with a service provider. When you are shopping around for anything new, chances are you’ve asked your friends and family which product or service they use, and whether they are happy, to help you narrow down your search and choose a reputable and reliable product. However, the danger when relying too heavily on word of mouth advertising when it comes to banking products lies in how different your financial situation is to that of your friends and family.

There is usually a lot more going on with other people’s finances than they’ll let on, so one person’s experience with a bank may not necessarily reflect another’s. However, that doesn’t mean you can’t rely on word of mouth advertising at all when looking for a lender, because you can ask yourself about your experiences with your current bank, and receive an honest and relevant answer. Ask yourself whether you are happy with the service, whether it is easy to do your banking with your current bank, and whether the products are reasonably priced and fully featured. This will give you a good indication of whether it is worth you taking out a new loan product with your current bank – whom you already know everything about.

Plus, when you have an existing relationship with your bank, it is often possible to have loan application fees waived, and you may even be able to negotiate on any ongoing fees, or qualify for a lower interest rate because you are known to the lender.

Alban has been blogging about personal loans for the last 3 years. He has also contributed several articles on savings accounts and credit cards.

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6 Great Tips for Saving on Groceries

The average household would probably say that food is the biggest expense they have.  This is why you have enter the grocery store with a plan.  The advice below will put you well on your way to saving big and spending less!

1. Create a List
Many people mess up by not creating a list.  They may have a couple of things in mind, but they really may not know where all of this stuff is located.  This means they have to go down aisle after aisle looking for what they need, picking up more along the way. Another, even safer, form of insurance is sticking to a budget. And I don’t mean “I’m only going to spend $50.” I mean only taking $50 in cash and leaving your wallet in the car. Or better yet, at home!

2. (Double) Coupons
Many stores offer double coupon discounts (usually during the middle of the week) on their products.  Please don’t let this opportunity pass you by.  A store that offers double coupon discounts can help you cut your grocery bill literally in half. There are all types coupons, which you can find in newspapers and on the internet.  Do a google search for anything and everything + the word “coupon” “deal” “promo” or “discount.”

3.  Brands
There’s no need to spend all your money on name brands.  Generic brands of many products are very similar.  Sometimes you won’t even know the difference.  The only difference is that the name brand might look a little fancier. Don’t get caught up in the pretty packaging though!

4. Sales
Don’t overlook sales! You may be missing out if you are totally in your own world and never branch out.  Sometimes a bigger box of cereal may cost less than the smaller box that you usually buy, and who knows, you might like it more too! It’s hard to explain why sales like this exist, but forget about the rationale behind this.  Just buy it! But don’t also buy the product you normally buy, or that’ll defeat the whole purpose.

5, Stay Strong
Many people have heard of impulse buys at the checkout lane. This includes things like magazines, gum and candy bars.  Consumers should avoid these, but they are not the only things that throw your grocery store budget off track.  There are many things throughout the grocery store that can make you spend much more than you anticipated. To avoid this, stay out of places like the snack aisles or the bakery, unless you need something specific from there.

6. Try a New Item
New items pop up all the time.  Companies make it their business to drive consumers towards these products with discounts.  Take advantage of it.  They may cost much more once they have become established items, but for now,  ride the wave and get them while they are cheap.  You don’t always have to buy the same beverage or brand of chicken!

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February 24, 2012

Historic Interest Rates Good For Mortgages Bad For Pensions

Interest rates continue to fall and have entered all-time low territory. So why is there is no jubilation and lines of people at the banks trying to buy homes or refinance existing loans?

Low Interest Rates Fail To Stimulate Housing

Despite the cheap money, it is still challenging for many homeowners who are underwater on their existing loans and who may have other credit blemishes due to job loss, job change or inconsistent income. Certainly, there are some people who are able to take advantage of the cheap money but not the massive numbers that we saw in boom years long past. Government stimulated initiatives continue to roll out which incentivize banks to refinance struggling homeowners into lower rate loans.

Retirees Suffer From Prolonged Low Interest Rates

There is a scary flip side to the interest rate environment. Pension funds which rely heavily on bonds and other interest rate based securities to generate sufficient invest returns to pay retirees are suddenly not making enough to cover their obligations. Compound that with retirees trying to living off their life savings which barely generates 1% return and you can begin to see the potential epidemic.

Perfect Storm Endangers Pension Funding

The longer we endure this type of interest rate environment, the wider the funding gap of pension plans. This will put pressure on stocks if companies are forced to close pension gaps with current earnings. When you also consider that 1) our massive Baby Boomer generation is retiring right now and 2) the longer life expectancies of Americans due to better health care, you can see how there are several layers creating a perfect storm of massive pension underfundings.

Good News, Bad News Economy

Most subjects dealing with the economy and finances have a pro and con. Just like when you buy and sell stocks, there is a winner and a loser. With economics, there are two sides to every coin. For example, low interest rates help homebuyers but hurt people living on fixed incomes. When interest rates rise, many investors will benefit, but people with adjustable rates on credit cards and other debt will have to pay more interest. Even if you do not understand all the details, as a consumer, it is wise to stay aware that good news in one sector means the potential for bad news elsewhere.

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February 23, 2012

7 Ways To Earn Extra Money From Used Items Around Your House

Everyone would appreciate a little extra cash, especially in this troubled economy. While finding a job right now might be difficult, finding some extra dough can be done at home. Here are seven ways to earn extra money from used items around your house.

1. Books

Any college student is aware of how much books can cost. Whenever someone is paying a pretty penny for a book, they could be sending you that money. Selling unneeded books is quite easy. The best ones to sell are obscure nonfiction, but it is worth researching the price of any extra book. The most popular sites to sell old books on are Amazon.com, BN.com and Half.com. All of these walk individuals through the process of assessing, pricing and listing a book. They each will take a nominal fee and small percentage when the book sells, but this is not paid if the book goes unsold. The downside of selling books is that you must monitor the listings at least twice a week.

2. Jewelry

Selling books is profitable, but takes patience. For a quick buck, take any old jewelry to a precious metal buyer. There are many businesses now buying platinum, gold, silver and other valuable metals. In most cases, the amount you will receive is almost the same at every store, so driving around for the best offer is rarely worth the hassle. Simply find a reputable metals dealer and ask what the value of your jewelry is. If you like the offer, accept it.

3. Electronics

Everyone has old electronics, and many of them are of some value. Whether you have an old cell phone, camera, computer, CD player, DVD player or other electronic device, there is a website that wants it. For many items, these sites are willing to pay. To see if your old electronics qualify, find an appropriate site and enter your model into the form.

4. Sports Equipment

Depending on what sport you played, the equipment might be worth something. Usually, people can get a significant amount for snow skiing equipment, such as skis, bindings and boots, provided they are not too outdated. Other sports that require a lot of gear are mountain climbing, football and lacrosse. Yet, even ice skates or a tennis racket can be sold. Any sports equipment might be worth something. This can be especially helpful for families with children involved in sports.

5. Clothes

Many people occasionally take old clothes to a second-hand store. Next time you head to the thrift store, first stop by private, independent stores, before you go to the Salvation Army or Goodwill. These individual stores will usually pay for fashionable clothes that are still in great condition. If you have only worn something once, or if there is a shirt that still has the tags attached, it could pay for a new piece of clothing.

6. Furniture

The furniture in a home is often among the most expensive items in the house or apartment. As such, it also will bring in the most money if sold. The most popular ways to sell furniture is through Craigslist.com or a garage sale. However, if the item being sold is extremely valuable, then selling it on consignment at a store might be the most profitable method.

7. CDs and DVDs

Even though people are increasingly turning to digital music and streaming movies for their entertainment, CDs and DVDs can be sold. These will not bring in thousands of dollars (unless you have a houseful of them), but they should be worth a few dollars. Best of all, they can be sold very quickly. Simply take them to a local used video or music store, as this media does not resell well online.
Everyone can find some things lying around the house to sell. No matter what you have, it can bring in a little extra money. In times like these, that extra money earned from things around the house will be greatly appreciated.

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February 20, 2012

Finance Tips For Elder Care

Caring for elderly relatives can be very expensive. Today, the cost of nursing homes and senior assisted living facilities are higher than ever before. As the trend continues we’ll see more families strapped to finance for the long-term care of their elderly loved ones. Here’s how to manage the cost of care.

Consider the alternatives to a long-term care facility. Unless your aging parents requires extensive medical care or is at risk of severe injury left unattended, you may be able to care for them at home. The first and often best place for someone to age gracefully is in their own home. With some modifications many homes can be perfectly suitable for elder care.

Look at the possibility of consolidating living space into a single level. Move bedrooms, kitchens, laundry, and bathroom to one floor. By eliminating the need for stairs you can make your special senior safer.

What to do with the extra space? Many families turned a large one family home into a two or three family home with just a few adjustments to design and layout. Check your local ordinances before renting out your home as a multiple dwelling. Any apartments that you add to the structure must be safe and up to code. By renting out the basement and second level a senior citizen can bring in a healthy monthly income that can contribute to day-to-day care.

Some families will elect to offer room and board for free in order to have a trusted companion live at home with their parent or grandparent. As long as you’ve done a sufficient background check of the senior companion and you monitor the relationship closely this can be a very affordable way of giving care.

Another alternative is to have your elderly parents or grandparents move in with you. Often times this can work out cheaper for the family as a whole. Some seniors will choose to sell their primary residence and use the proceeds to pay for care while others prefer to keep the property and use it to provide rental income while holding on to the asset.

Before making any drastic moves when it comes to your parents finance it make sense to sit down with a qualified financial advisor. Choose an adviser who can give objective help and does not rely on sales commissions for income.

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