Is Peer Lending Too Risky for Regular Investors?

by Sean Bryant on December 19, 2014

Most likely, you are reading this post because you desperately need an alternative to stocks and bonds for your investment portfolio. While the long-term return on stocks has averaged around 9% over the last couple of decades, most investors miss the average by a long-shot and bonds are paying next to nothing in the ultra-low rate environment.

Also just as likely though, you are probably more than a little hesitant to make peer lending a part of your investment strategy.

Sure, investing in peer loans is risky but no more so than other investments. Like most investments, the risks in peer lending can be hedged away with a careful investment strategy and adding this new asset class to your portfolio can actually help lower the risk in your overall portfolio.

Peer Lending: Risks and Returns

Investing in bank loans is nothing new. It’s just that, before peer lending, investors had to go through a bank or a brokerage firm to find loans in which to invest. The two lending sites, Prosper and Lending Club, are revolutionizing finance by connecting investors and borrowers directly. Borrowers apply online and are verified by the sites before the loans go online for investors to review. Investors decide in which loans and how much to invest, from a minimum of $25 for each selected loan. The borrower sends loan payments to the website which handles all the processing and passes the payments on to the investors. For a more detailed description of the process, see my recent review of the two peer lending sites.

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How to Get Financial Aid for Hospital Bills

by Sean Bryant on December 18, 2014

financial aid for hospital bills

Hospital bills can be overwhelming, especially when you’ve just conquered a serious health crisis. The cost of healthcare today can be completely out of reach for those living without insurance or with inadequate coverage, resulting in potentially devastating debt and a financial hole many of us are not prepared to be in.

Thankfully, most hospitals are not-for-profit organizations, meaning they are required by law to provide charity care to people with limited means. These hospitals have a financial aid department within billing and collections that has the power to reduce or eliminate your bill based on need.

Qualifications 

You must meet certain qualifications and guidelines to receive financial help from your hospital. For 100 percent coverage of your expenses, your annual income must not exceed 200 percent of the federal poverty level. However, if your income exceeds this limit, you may qualify for reduced financial aid. If you have a medical emergency that exceeds the medical debt-to-income ratio by 30 percent, the hospital may cover the portion over that percentage.

On top of these guidelines, you must have also used all your available resources before being considered for financial aid from your hospital. Your insurance coverage must be exhausted, both primary and secondary, if you have it. Additionally, any medical assistance for which you qualify must be exhausted, including federal and state aid programs such as Medicaid. Once these resources are used up and there is still debt that you cannot pay, it is time to turn to your hospital’s financial aid department.

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How to Prepare Your Finances for Home Ownership

by Sean Bryant on December 17, 2014

Prepare your finances for home ownership

If home ownership is on your list of goals for the near future, there’s a lot of red tape you’ll have to go through to make your dream a reality. But if you’re prepared for the journey that awaits, the transition from a renter to a homeowner can be a near-seamless one. Here are a few tips to keep in mind before moving forward:

Start saving

Even if you qualify for down-payment assistance through a first-time homebuyer program, you may incur expenses for closing costs. You also want to have funds set aside for moving costs and future fluctuations in income.

Use a mortgage calculator

Use an affordability calculator such as the one offered at Bankrate.com to come up with an idea of where you stand at the moment with your current income and outstanding debt obligations. And if the result is substantially lower than what you expected, manipulate the numbers to determine how much of an income increase or reduction in debts you need to qualify.

Determine your budget

Regardless of how much the affordability calculator indicates is feasible for a home loan, only you understand the extent of your monthly expenses and how much can comfortably afford. Since the lender doesn’t factor in the cost of other recurring expenses such as childcare, food, utilities and vehicle maintenance, you’ll need to do so to come up with a figure that best suits your needs.

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Credit Score Explained: What Affects Your Credit Score?

by Sean Bryant on December 16, 2014

What affects Credit Score

Though the concept has only been around since 1989, credit scores have become an important part of the financial landscape. A good credit score can help you get a loan or even a job; a bad score could keep you from getting a credit card, auto loan or mortgage – and in some social circles, even a date! With so much riding on a simple, three-digit number, it’s easy to see why people are concerned about what affects their credit score.

If you’re confused about your score, what affects it and how it can change, use this credit score guide to get a general idea of the process. Then, consult a qualified financial advisor to have the finer points of your personal credit score explained to you. The more you know about the factors that determine your credit score, the more you can do to maintain a number that will help you secure good credit for years to come.

Your credit score number explained

If you recently received a copy of your credit score, you may be curious about the meaning behind the number. Credit scores range from 300 to 850; the higher the score, the better your credit. The major credit bureaus break this range down into five smaller groups; however, no lender uses the same “score cutoff,” so it’s hard to say objectively what makes a score good or poor. Use this credit score guide to get an idea of where your score may land you, but be sure to ask your lender specifically:

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Is the Customer Always Right?

by Sean Bryant on December 11, 2014

Customers

Is the customer always right? Of course not, but the general practice is to make every customer happy no matter what the problem is. Otherwise, those dissatisfied customers could spread bad reviews about your business and cost you more business. So, what do you do when you face a customer that is wrong?

Don’t Let Customers Take Advantage of Your Business

Customers know that you want to do everything possible to make them happy. Therefore, you’ll occasionally come across a customer that tries to take advantage of your business with a fake complaint or problem. Or, a customer may blow a small problem out of proportion in an attempt to get something at a discount. When this happens, you need to address the situation carefully. It’s important to keep customers happy, but that doesn’t mean you have to let customers walk all over your business. You’re in the business to make money, and therefore you need to train employees to spot customers who are trying to take advantage of the system.

Don’t Sweat the Bad Customers

Some customers are just bad. They cause a huge commotion over a very small problem and demand outrageous retribution. Sometimes you have to let these bad customers go because they are more hassle than they’re worth. Everyone knows it’s much harder to get a new customer than it is to retain the customers you already have, but you do have to realize that one bad customer can rub off on others and do more harm than good. Treat each of these situations on a case by case basis. The customer might get tripped up and drop his or her complaint.

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Inflation: Effects on Retirement Income and Ways to Tackle It

December 9, 2014
Retirement Inflation

During retirement, the only thing that helps you survive is your retirement funds. However, suddenly finding out that the money that you have accumulated till now is worth much less than what it used to be can easily turn the sanest person mad. This is the impact that inflation has on your savings. Many people […]

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5 Ways Parents Can Reduce Student Loan Debt

December 8, 2014
Reduce Student Loan Debt

When your child started applying for colleges, chances are they didn’t think much about how their education would be funded. According to CNN Money, the average student loan debt was $29,400 in 2013. Considering the high cost of college tuition, parents and their students need to be aware of their options for reducing student loan […]

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