China cuts rates on policy loans, analysts point to more easing ahead

SHANGHAI, China - China's central bank on Monday unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, while some market analysts expect more policy easing this year to cushion an economic slowdown.

The People's Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85 percent from 2.95 percent in previous operations.

Thirty-four out of the 48 traders and analysts, or 70 percent of all participants, polled by Reuters last week predicted no change to the MLF rates in January, with the rest betting on a rate cut.

The world's second-largest economy has shown signs of slowing after a rapid rebound from the COVID-19 slump, with concerns about the financial health of property developers and the rapid spread of the Omicron coronavirus variant clouding the outlook.

"The PBOC's decision to ease early in January suggested that economic downward pressure intensified at end-2021 and room for improvements in the first quarter of this year is not huge," said Ken Cheung, chief Asian FX strategist at Mizuho Bank.

Cheung expects that the PBOC could deliver more easing measures this year than previously expected by market analysts.

Such expectations were also reflected in the bond market, with China's 10-year treasury futures rising to their highest level since June 2020 and the yield on China's benchmark 10-year government bonds falling more than 2 basis points in early trade.

Market analysts said the size of the rate cut and the timing were a big surprise, and they believe further monetary stimulus could follow.

"The 1Y LPR signaled that another rate cut was coming," said Carlos Casanova, senior Asia economist at Union Bancaire Privee in Hong Kong.

"However, the 10 bps cut was larger than expected, suggesting that the authorities have become more preoccupied about weakness in the economy," he said, adding he also expects an additional 100 bps reduction to banks' reserve requirement ratio (RRR) this year.

With 500 billion yuan worth of MLF loans maturing on Monday, the operation resulted in a net injection of 200 billion yuans into the banking system.

The central bank also lowered the borrowing costs of seven-day reverse repurchase agreements, or repos, by the same margin to 2.10 percent from 2.20 percent, when it offered another 100 billion yuan worth of reverse repos into the banking system.

-reuters

US long-term mortgage rates change little; 30-year at 2.87%

WASHINGTON (AP) — U.S. long-term mortgage rates changed little this week, flattening in recent weeks following a year-long decline amid economic anxiety in the recession set off by the coronavirus pandemic. Home loan rates have remained at historically low levels.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan eased to 2.87% from 2.88% last week. By contrast, the rate averaged 3.57% a year ago.

The average rate on the 15-year fixed-rate mortgage ticked up to 2.37% from 2.36%.

The low borrowing rates have bolstered demand by prospective homebuyers, who on the other hand have been constrained by the scarcity of available homes for sale.

In the latest sign of the flagging economic recovery and continued elevated level of job cuts, the government reported Thursday that the number of Americans seeking unemployment benefits fell slightly last week to a still-high 840,000.

-Associated Press

The Top Questions to Ask Your Lender Before a Refinance

You waited long enough – interest rates are right where you want them so you are ready to refinance. Before you jump in head first, you should ask your lender the following important questions.







What is the APR?

Don’t let yourself get so focused on the interest rate that you forget about the APR. The APR is the total cost of the loan, including the closing costs in percentage format. It gives you a better idea of what the loan actually costs you.

Sometimes loans with low-interest rates actually have high APRs because of the excessive fees charged. The APR can help to keep you in line and avoid you from refinancing when it’s really not worth it. It’s so easy to get caught up in the low-interest rate that you completely overlook what the loan will cost in the end.

Is There an Origination Fee?

If you are using a lender other than your current lender, you may pay an origination fee. Even if you use your current lender, don’t just assume they won’t charge it – ask them. Lenders charge an origination fee when they think an applicant has a risk of default. Unless you have exceptional credit and a super low debt ratio, you have some level of risk of default; it’s only natural.

Not all lenders charge the origination fee, but if they do, it can really make your closing costs get expensive. One point in an origination fee equals 1% of your loan amount. If you have a $200,000 loan, that’s $2,000 on top of all of the other closing costs.

Can You Pay a Discount Fee?

The discount fee is an optional fee. If you want to buy your interest rate down, you’ll pay the discount fee. Lenders usually discount the rate 0.25% for every point that you pay. Each lender has their own pricing structure, though.

Make sure you look at the big picture before you decide to pay the discount fee. First, will you stay in the home long enough to realize the savings? Remember, you have to pay off the closing costs before you truly start putting the savings in your pocket. Also, is the savings enough to make it worth it? If you’ll only save $25 a month, do you really want to pay thousands of dollars? It will take many years for it to make it worth it.

When Can You Lock the Rate?

Just like when you bought your home, you need to lock the interest rate. You’ll have a certain amount of time to close the loan before the rate lock expires too. Luckily, you can usually take a smaller lock period with a refinance because you don’t have to do any of the legal work that was necessary when selling the home.


Make sure you know the cost to lock the rate (if any) and the consequences of an expired lock. You don’t want to find out the hard way that you’ll have to pay to re-lock your interest rate because you locked it too early.

What’s the Turnaround Time?

If you are in a hurry, such as is the case with some cash-out refinance loans, you’ll need to know how long it will take the lender to process your loan. don’t be afraid to ask what the turnaround time is and what you should expect as far as a closing date.

If you are getting cash out of your home’s equity, you’ll want to know when you’ll receive it. Plus you need to schedule your life around the closing. For example, your closing date will affect when you have to make your first payment. If you have a month off, you can use that extra money that you’ll save to cover your closing costs. If you close at the beginning of the month, though, you won’t have that month off; your first payment will be due the next month.

Who Will Service Your Loan?

Finally, you should know who will service your loan before you close on it. If the lender doesn’t do their own servicing or they know they will sell your loan, you’ll need the details of where your loan will land. Just because you like the lender you are using now doesn’t mean that you’ll like the company that services your loan.

The loan servicer is actually the company that you’ll have the most communication with so you want to make sure that it’s a company that you like. If your lender can’t tell you exactly who will service your loan, they can at least tell you the possibilities of who will so that you can do your research and decide if it’s the right loan for you.

Take your time to ask your lender these important questions before you refinance. They will give the answers that you need to make the best decision about your refinance. Since you already own the home, you aren’t under any pressure to refinance like you were when you bought the home and needed financing. This time around, you’ll have more time and be able to make clear choices.

source: blownmortgage.com

Qualifying for USDA Loan with Low Income

Consumers often shy away from applying for a mortgage when they know their income is too low to qualify them for a program. While this might be true for traditional type loans, such as the conventional loan, there are options out there for people with smaller incomes. If your desire to become a homeowner is held back by your lack of income, consider looking into the USDA loan, a successful option for those with lower incomes. This successful loan program which is offered by the United States Department of Agriculture offers flexible guidelines, low-interest rates, and fewer requirements than most other loan programs.

Little Money Needed

The down payment requirement is often what holds people back from purchasing a home. The all-too-common need to put down 20 percent on a home is what people focus on, thinking that they will never be able to afford a home with that kind of money required up front. On the contrary, the USDA loan does not require any money down – you can finance 100 percent of the purchase price of the home. Right off the bat, this takes a huge amount of pressure off of the buyer as there are not thousands of dollars needed up front to purchase the home. In addition to not needing a down payment, you may be able to finance the closing costs into the loan, including the funding fee of 2.75 percent of the loan amount. You are able to finance up to 102 percent of the value of the property, according to the USDA, which can include the funding fee and closing costs. If you offered a lower amount for the home than it is worth, you have even more room to roll closing costs and the funding fee into the loan amount.

Low Monthly Payments

Sometimes it is not just the down payment that scares people away from applying for a mortgage, but the monthly payments as well. If you have a high interest rate, your payment is going to be high, even if the home you purchase is relatively cheaper than other homes in the area. With the USDA loan, however, the interest rates charged are much lower than any other loan program. Typically, they do not alter with debt ratios or credit scores, giving everyone that qualifies for this program a low interest rate and affordable monthly payments. Since the USDA program is for low-income families and homes that are located within rural areas, the purchase price of the home is not going to be very high as it is, further contributing to the affordability of the mortgage payment. In addition, the mortgage insurance that the USDA charges for any mortgage that has a loan-to-value ratio higher than 80 percent is well below the costs of any other program, giving you even more reasons to be able to afford the loan.

Flexible Guidelines

Credit scores, debt ratios, and income requirements often render many potential borrowers ineligible for a loan program, but that is not often the case with the USDA loan. In fact, the less money you make, the more eligible you become for the loan. This is not to say that they do not have credit or debt ratio guidelines in place – they do, but they are much more flexible than other programs, including FHA and VA loans. The guidelines include:

    Minimum credit score of 580, but if your score is less than 620 but higher than 580, you will have to go through some additional evaluation to ensure that you can afford the loan. If your score is higher than 620, the guidelines are very simple to meet. If you do not have a credit score due to insufficient credit reporting, you are eligible to use alternative trade lines, such as insurance, utility, or rent payments.
    Your income cannot be higher than 115 percent of the average income for the area. Every area differs, but you can find the maximum amount for your area on the USDA website. They do offer allowances on your income if you have children, elderly, or disabled family members living with you, enabling you to increase your chances of having income low enough to qualify for this affordable program.
    Your credit history should show on time payments with no more than 2 late housing payments within the last couple of years. Your other payments should also be timely for the most part; however, a few late payments will not disqualify you for the program, especially if your credit score is above that 620 range.

The USDA loan makes it possible for people with low income to qualify for a loan. Granted, you have to purchase a home in a rural area, but a large majority of the United States falls into this category. A search on the USDA website will show you where these affordable homes are located, enabling you to purchase a home despite your low income and put the days of renting behind you.

source: blownmortgage.com

My Kid's Drowning in Credit Card Debt! What Do I Do?

If you trusted your son or daughter to keep track of their finances, and they slipped up, what in the world are you supposed to do?

Let's say they've racked up a big, nasty credit card debt -- to the tune of thousands of dollars. Should you pay off their debts to help keep their credit score above water? Or is it better to let them learn from their mistakes and suffer the consequences? Though each individual situation is different, here are your options, what's at stake, and a few pointers to help you plot your course of action.  



A Personal Loan, With a Contract

If you have the means, think about whether or not you want to loan your daughter the money. Sometimes her debt is manageable enough that you can pay it off in the form of a personal loan to your daughter. You can charge her interest as well, so she learns just how much a high APR can cost her.

But you have to examine the situation from a lender's perspective, rather than simply write a check and expect she'll make payments. What is her employment situation? Will she be able to make payments to you without the security blanket of your relationship making her complacent? Has she typically been a responsible spender in the past, or does she impulsively purchase on a grand scale regularly? If you do decide to help protect her credit history, it's a smart idea to sign a contract with your daughter to make your agreement more official and binding.

If You Co-Signed, You're on the Hook

If you co-signed on your son's account, you're responsible for his credit card debt. Because of regulations passed in the CARD Act of 2009, it's more difficult for young adults to qualify for credit cards, so more and more parents are co-signing on accounts and acting as guarantors for their children. If you've already taken that step, you should hopefully have realized that your son's purchases will affect your credit, regardless of your involvement.



 In this case, it may be more prudent to pay off the debt if you can, cancel his account, and work together to come up with a payment plan to rectify the situation and make sure it never happens again. If you haven't co-signed yet, sit down for a serious conversation with your son on your values and financial responsibility.

Lessons to Be Learned?

Bad credit now will impact her financial future later, but so will bad habits. If your daughter doesn't learn from her mistakes now, there could be bigger and more damaging mistakes ahead. Will bailing your daughter out of her financial mess with creditors make her realize the gravity of her mistake? Or will you just end up fostering her sense of dependence on you? You won't always be there, wallet in hand to save her, so if she can manage to take the credit hit, perhaps it's best to let her learn her lesson this time, and give her some tough love.

Communication Is Key

Loaning money to someone you love is always, always messy. While your son should intellectually know that your love is unconditional (which is why your help comes so willingly), for him, it's emotionally very difficult to face your parents when you owe them money. Plenty of relationships have been ruined by debts of personal loans, both from neglected payments and feelings of shame. Be sure that if you choose to help your son, you commit to maintaining an open dialogue and doing your best to keep business and family separate.

Ultimately, each family and financial situation is different. But before you make a plan to tackle your son or daughter's debt, you need to examine the situation from all angles. There are many factors in play, but above all, your relationship and your child's sense of responsibility from this learning experience should be at the forefront of your mind.

source: dailyfinance.com

Top Reasons Why People Apply For A Loan

The biggest single reason people apply for a loan is to purchase a home. Mortgages, where the borrower provides the property as security against non payment, are a huge segment of lending. An estimated 60% of all domestic property has some form of mortgage loan outstanding. The total value of all property loans as disclosed by the Bank of England at the end of July 2010 was £1,239 billion pounds. This compares to lending to individuals for other purposes of just £217 billion. As customers are adapting to the harsher economic times, this amount is slowly being repaid and has fallen from £225 billion in January 2010.

Credit card debt accounts for £58 billion of this total. An amazing amount given that the rates of interest for borrowing on a credit card are extremely high compared with a personal loan. This short term borrowing is probably the most expensive form of debt individuals carry for any period of time.

Away from short term debt the principle reasons for borrowing fall into three broad areas:

Debt consolidation – This is where customers take out a new loan on better terms to pay off existing debt at high rates. For example, it may be that there is a combination of credit or store card debt at 18% interest bundled with a personal loan taken out a few years ago at 12% interest. Even in today’s tough markets it may be possible to obtain a new loan to cover this at 10% over a longer period. This can greatly ease the pressure on family finances. Many people have woken up to this option and lending for this purpose has grown considerably since debt management companies have highlighted the benefits of such an approach.

Acquiring a vehicle – This will probably be the second most expensive purchase after a home. Manufacturers and dealers are well aware that most customers cannot pay cash for a new or used vehicle. Hence, there is a huge market in personal loans and personal contract purchase plans to make obtaining a vehicle affordable for those on a budget. Be it a car, van, caravan or motorcycle there will be a point of sale option for financing the purchase. Many banks and other financial institutions also target this as a specific area of lending.

Home Improvements – Whilst the main home may be acquired on secured loan, home improvements such as double glazing, new kitchens or furniture are usually paid for by borrowing on unsecured loans. These tend to be relatively short term reflecting the smaller amounts involved when compared to property loans.

Lenders focus on the ability to repay and so there are regional variations in the amount of credit granted to individuals. The wealthier regions have more appeal than the poorer regions in the North and West of the country. Less well off areas are the domain of the subprime lenders and doorstep lenders who use different products and techniques to approach the market. Weekly payments and short term loans from places like http://www.cashwindow.co.uk at high rates will be more common in these areas as people’s credit ratings are generally lower and less appealing to mainstream lenders.

 source: everythingfinanceblog.com

How to Refinance Any Debt

What do you think of when you hear the word refinance? If you’re like most people, you probably think of refinancing a mortgage.

In my weekly newsletter, however, we’ve been talking about how you can refinance any debt. I’ve encouraged my newsletter subscribers to write down every debt they have, including the interest rate. With the list in hand, they are reviewing each loan to determine if they can lower their interest rate. It’s one of the easiest ways to save money.

So today I thought we’d look at what refinancing involves, why you might want to refinance, and how to refinance any type of debt.

What is Refinancing?

Refinancing is trading one debt for another. If you refinance your mortgage, you’re trading your original mortgage for a new mortgage, usually with better terms that save you money.

You could also trade your credit card debt for a lower-interest home equity loan, which is refinancing. Or you could move your car loan to a new lender to get a better interest rate.

Sometimes you refinance with the same lender. In this case, you’re changing the terms of your original loan based on new financial factors, such as a better credit score on your part or lower overall mortgage interest rates. Sometimes, you may take out a new loan to pay off the old loan, getting better loan terms in the process.

As an aside, a loan consolidation is a bit different. With consolidation, you are usually consolidating multiple loans into a single loan. This process is a form of refinancing, but involves trading multiple debts for one.

When Should You Consider Refinancing?

Usually the goal of refinancing is to save money, especially on interest paid over time and on monthly payments. But you could also choose to refinance to change your loan terms.

For instance, you might refinance your mortgage from a 15- to a 30-year loan. A longer term gives you lower (often much lower) monthly payments, which are great if you’re in a financial pinch. Even if you’re paying your 15-year mortgage with ease, you might want to take a longer term and invest the extra money each month, hoping to come out ahead financially in the long run.

On the flip side, you might choose to refinance your 30-year mortgage to a 15-year mortgage. If you want to be debt free faster, this is a way to make it happen without making extra mortgage payments. Plus, the shorter loan term can save you tens of thousands of dollars in interest paid over time because 15-year interest rates are lower and you’ll pay down principal faster.

If you owe less on your home than it’s worth, you might want to do a cash out refinance, in which you remortgage it and take the difference in cash.

One more option is to switch from a variable-rate mortgage to a fixed-rate mortgage. A set interest rate and predictable payments can make it much easier to plan your personal finances.

As you can see, there are many instances in which you might consider refinancing your debts. Be sure you run the proper calculations, especially if you’re refinancing a larger debt like a home or a car. These refinances can cost you cash up front, so make sure they’ll be worth your while in the long run.

Refinancing other debts, on the other hand, may not be so complicated. If you’re dealing with high-interest credit card debt, all you need to do is transfer the balance to a lower-interest card to save a fortune.

How to Refinance all Your Debts

As I said earlier, you can refinance any debt with the proper steps. Here are some of the ways that you can refinance various types of debt:

Straight-up refinancing

 

Although any of these methods is refinancing, let’s first talk about traditional refinancing. This term is most likely to be used for mortgage loans, auto loans and student loans. Basically, you either get a loan with better terms from your current lender or from a new lender. The key to this is to shop around for your new loan.

Refinancing your mortgage may take more legwork because you’ll likely need to talk with loan officers about refinancing offers and the potential costs of the process. When refinancing a secured loan like your home or auto loan, you may not be able to refinance if you owe more than the home or vehicle is worth. A loan for more than an item is worth is riskier for lenders.

We talk elsewhere about how to refinance a home in which you don’t have a lot of equity. One option is to refinance through the Home Affordable Refinance Program, and another is to take out two loans, one for the negative equity in your home, and another for a regular mortgage at a lower rate.

If you have negative equity in your vehicle, you may need to take out a separate, unsecured loan to pay down part of the car loan. For instance, if you owe $15,000 on a car worth $11,000, take out an unsecured loan (or use a low-interest credit card) to pay off $4,000, and then refinance the remaining auto loan. Or you could keep paying on the vehicle until you build more equity.

Finally, let’s talk about straight-up refinancing of student loans. Because student loans are unsecured, it’s very hard to get a new lender to take them on at a lower interest rate or better terms. Bloomberg’s BusinessWeek notes that there are several ways to change some of your student loan terms. If you can’t make minimum payments on federal loans, look into modified payment plans or forbearance. Even some private lenders offer forbearance in some instances.

Unfortunately, you probably won’t be able to refinance these loans at a lower interest rate simply by finding a new lender. But you may be able to use one of these options for refinancing your student loans:

Using your home’s equity

 

If you have equity in your home, you can use that to refinance some of your other debts, such as school loans, credit cards or other personal debts. There are three options for doing this, including a home equity loan, a home equity line of credit, and a cash out refinance:

• Home Equity Loan: This is an installment loan based on your home’s equity. It’s also known as a second mortgage. If your home, for instance, is worth $500,000 and you owe $300,000 on your first mortgage, you could borrow $150,000 against your home’s value as a second mortgage. You’d pay back this type of loan in set installments, just like your first mortgage. All other things being equal, however, the interest rate on a second will be higher than your first mortgage
• Home Equity Line of Credit: This is similar to a home equity loan, except that it’s a revolving debt like a credit card. With a HELOC, you can write a check or use a debit card attached to the account, pay back some or all of the charge, and then charge again.
• Cash Out Refinance: Instead of taking out a second mortgage as a home equity loan, you might consider a cash out refinance, which will leave you with one mortgage payment. In the home equity loan scenario above, you could just refinance your first mortgage as a $450,000 mortgage, and take the excess $150,000 in cash.

Using your home’s equity to refinance other debts can be a good option because a secured loan against your home’s equity will likely have a much lower interest rate than the rates on other debts.

The rates you’ll pay on a home equity loan are typically much lower rate than you’re likely to be paying on any credit cards, and it’s also a lot lower than the locked-in 6.8 percent rate on federal student loans. So you could lower your overall debt payments and reduce the time it takes to pay off debts by using your home’s equity to pay off the balance of other loans.

If you can’t pay on your credit cards or student loans normally, the creditors can’t come after your property directly. If you can’t pay your HELOC or home equity loan, your lender could foreclose on your home.

Refinancing with credit cards

 

The most common way to refinance credit card debt is a balance transfer. You transfer the balance from one credit card to another, normally with a much lower interest rate.

Your best bet is to consider a zero interest credit card set up to encourage balance transfers. Note that some balance transfer credit cards come with fees, even if they have a limited-time zero interest rate on balance transfers.

There are some no-fee balance transfer cards available, so you should check out these options first. Some cards have an option for either zero interest with a balance-transfer fee (which is usually a percentage of the balance you transfer), or a zero transfer fee with a low interest rate. You’ll have to do the math to figure out which works best for you.

If you get a really great deal on a credit card and have enough available credit, you can use a credit card to refinance other higher-interest debts, as well. For instance, you could pay off a very high-interest personal loan with a lower-interest credit card, effectively using your credit card to refinance it.

Always check your credit card contract first because different types of purchases, transfers and payments may result in different interest rates.

Debt consolidation

 

If you’re swamped in debt and are unable to make minimum payments on everything, debt consolidation could be a good option. You’ll get one large loan to pay off part or all of your other debts, consolidating them into one loan.

The advantage of debt consolidation is often that it lowers your overall monthly payments, a relief for hard-hit consumers. Depending on the interest rates of the loans you’re carrying, consolidation may lower your overall interest rate and total interest payments.

According to the FTC, using your home’s equity is the most common way to consolidate debt, but you may also be able to get a consolidation loan. However, some disreputable so-called debt relief organizations will offer debt consolidation loans that aren’t a great deal. They may increase the overall interest paid, extend your repayment time to decades, or charge fees that increase your overall debt load.

It’s very common to consolidate student loan debt, and this is usually an automatic option with federal student loans. If you took out student loans for several years in a row, you probably have several loans from several lenders. It’s a pain to make so many separate payments, and your minimum payments are probably quite high.

In this case, you can consolidate all your loans into one by a single lender. Consolidating federal loans usually means that you lock in your interest rate, which may otherwise vary from year to year. Plus, you could lower your overall monthly payments and gain access to several repayment plans.

You’ll have to consolidate private student loans separately, but there are several lenders who will do it. You can read more about how to consolidate student loans here.

Using LendingClub or Prosper

 

LendingClub and Prosper are peer-to-peer lending marketplaces. Basically, you can get a fairly low rate on an unsecured personal loan that comes from other individual lenders. LendingClub statistics say that nearly half their loans are used to consolidate debt or pay down credit cards with a lower interest loan.

Peer-to-peer lending options generally come with competitive interest rates that depend on your credit history, and they’re relatively quick to get. But the loan limits are usually around $25,000, though you may be able to take out multiple loans at once. They can be a good option if you need to refinance debt quickly.

The Bottom Line

 

Refinancing some or all of your debts may or may not be a good idea. Look at your debts, interest rates and minimum payments. If you could reduce interest rates significantly, refinancing is usually a great option. Also, if you can lower your monthly payments, you could kick the money you save into paying off your principal balances more quickly, or into investment accounts that allow you to save for the future.

source: doughroller.net

'Study now, pay later' loans proposed

A partylist representative on Monday pitched for the creation of a loaning system for indigent students that will allow them to borrow funds for tuition and other school fees that they can pay back once employed.

“A student loaning system for less fortunate students in our country could be a feasible option to consider in order to prevent another incident like that of Kristel Tejada of UP Manila," Representative Sherwin Tugna of the Citizens Battle Against Corruption (CIBAC), said.

The proposal would patterned after the loan system in the United States that give students the option of borrowing funds for tuition and then paying for it when they have jobs, Tugna said.

"We are currently studying how can that be done here. What is the limit of the loan and how long can the students' loan be spread," he said.

Under his proposal, the Commission on Higher Education will serve asthe fund administrator. The concept would be similar to Landbank’s loan provision to farmers and other members of the agricultural sector, Tugna said.

“Whether we like it or not, this incident with Ms. Tejada is the state of our education system and is a reflection of the lack of attention the government is giving to it. We may be angry at the administration of UP now and blame them for what happened but ultimately, the core of this problem is rooted in a government and a system mired in graft and corruption," he said.

"Money swindled or embezzled by enterprising and thick-skinned government officials could have been used to allocate to the already meager and limited budget of our country’s beloved state university and also to the other state universities and colleges that are brimming with bright and promising students who are afflicted by financial constraints,” Tugna added.

In a separate statement, Makabayan senatorial candidate Teddy Casiño Makabayan senatorial filed House Resolution 3044 calling for an inquiry on the various tuition and loan policies of State Universities and Colleges (SUCs).

"Government should direct concerned agencies and bodies to immediately review existing policies and rules of state universities and colleges (SUCs) in relation to tuition, loan grants and other payment schemes," Casiño, representative of Bayan Muna partylist, said.

"While SUCs are granted relative autonomy, government should have a set of minimum guidelines prioritizing the right of students to education over the generation of revenues," he added.

Fellow Bayan Muna partylist Representative Neri Colmenares said the government must answer for the UP student's death.

“The death of the young, promising student is a result of the heartless, anti-poor policies of the government.  It is outrageous and so ironic that this tragedy happened in the supposedly premier state university of the country. This is a state-driven murder,” he said.

source: interaksyon.com

Lifestyle changes and how they affect your mortgage

Maybe you just lost your job. Perhaps you just had a baby. Or,maybe you’re planning your wedding. No matter the reason, any time your lifestyle changes is an opportunity to evaluate your home loan, to help you reduce your expenses and maximize the money in your pocket.

Major Illness or Job Loss

If a pink slip or a major illness knocks you out of work for a few months, you may panic as you wonder how you’re going to make ends meet. Fortunately, there are ways to rearrange your mortgage to make the situation work for you.

Your first step may be to refinance. Use a mortgage calculator to see how much you could save by refinancing to a loan with a lower interest rate; mortgage rates are currently near historic lows, meaning now is a great time to shop around. Depending on your current interest rate, a refinance could save you hundreds of dollars a month in mortgage payments.

If that’s not enough, you may consider a forbearance. This option allows you to halt your mortgage payments, typically between six and twelve months, until your financial situation is less dire; then, you’ll have another six to twelve months to repay the interest and principal payments that accumulated while you were out of work. Most lenders will only offer a forbearance to borrowers who can prove their financial hardship is temporary, typically lasting six months or less.

Here Comes the Bride

If wedding bells are in the future, it’s a great time to look at your mortgage using a home loan calculator. Marriage means not only joining your lives, but your finances as well. If you’re in the market for a new home, adding in a second person to your family – and a second income – can increase the amount you may qualify for. If your partner has a strong credit score, he or she may also help you qualify for a lower interest rate based upon it.

You may be tempted to draw money out of your property to pay for your wedding through a cash-out refinance. This is where you liquidate some of the equity in your home to pay for expenses. If at all possible, resist the urge. For one thing, a wedding is a day, while your home is your shelter for months, maybe even years, down the road; reducing your financial stake in your home to pay for a one-day party is putting the cart before the horse. If you need more convincing, you should know that withdrawing some of your home’s equity will lead to higher mortgage payments, since you’ll have a higher principal to pay down on the loan.

And Baby Makes Three!

If your major lifestyle change involves starting a family, you’ve likely already started evaluating everything in your world, whether it’s the arrangement of furniture in a previously unused bedroom (where will the crib go?) to when – or if – you’ll return to work after the baby’s born. Spending some time with a mortgage calculator should be on your list, too.

Although the U.S. Government does not offer paid maternity leave to new parents, you can take advantage of the Family Medical Leave Act, or FMLA, which guarantees new moms and dads up to 12 weeks of leave – unpaid leave. To bridge the gap in finances during that period, consider refinancing your mortgage to a lower rate. Not only could you save hundreds of dollars a month, depending on your current interest rate, but you may also be able to “skip” a mortgage payment while you refinance from one loan to another.

One thing to consider here: my husband and I refinanced right after the birth of our first child. Shortly thereafter, we discovered that our previously-roomy house wasn’t big enough for our growing family. However, the refinance had really locked us in to staying in our home for the foreseeable future. In other words, the birth of a child may not be the best time to make dramatic changes to your mortgage situation.

source: everythingfinanceblog.com

File Bankruptcy to Get Off Mortgage With Ex?

Dear Bankruptcy Adviser,

My ex-husband and I divorced in 2005 and he kept the house. The problem is that we agreed to everything but didn't specify that he must get my name off the house in the divorce papers. So we both have remarried and he has been late on the house payments, which is affecting my credit and preventing me and my husband from getting a home loan. My ex-husband is missing payments. He does get caught up, but this has occurred on and off. It also means he cannot refinance because his credit is poor and now mine is, too. So my question is: Could I file bankruptcy and list only the house so that I am no longer responsible for it? Also, if I did file, would that affect me being able to get a loan for a house?

-- Kathy

Dear Kathy, Most things in life are not as simple as we want them to be. I respect that you just want to be done with the ex-husband and the past. Your approach may work, but not as easily as you would like it to.

If you are eligible for the Chapter 7 bankruptcy, it would eliminate your liability on the mortgage but it would not remove your name from the property title or the mortgage loan. You may have signed your name off of the title during the divorce, but your ex-husband would have to refinance the mortgage to take your name off the loan.

Here are the issues you have to address.

Are you eligible for Chapter 7 bankruptcy? You did remarry. While you can file bankruptcy as an individual, you must qualify as a couple. Your new husband may have separate assets and those generally do not need to be listed in your bankruptcy. However, his income and any post-marriage assets must be listed in your case. So, you need to find out whether you are eligible for Chapter 7 bankruptcy.

Do you have joint accounts with your new husband? The bankruptcy will impact any joint credit card accounts that you have with your husband. He can keep paying and his credit should not be harmed, but the lender may place a notation on his credit report. That note will say, "Included in bankruptcy." I am not a credit reporting expert, but I have researched this issue and my research shows that this note should not impact his credit score. It may only require an explanation to future prospective lenders.

Know that all debt must be included. You cannot file bankruptcy only on some debt. You have to include all other accounts, such as credit cards or personal loans. Even accounts without balances will likely be closed. You can start over, but not with your current accounts.

What will happen to your mortgage with your ex-husband? The mortgage lender will receive notification that you have filed bankruptcy. The positive part is that future late payments will no longer report to the credit bureaus.

The negative part is that a future foreclosure will show up on your credit report. Your ex-husband may lose the house in foreclosure one, two or many years later. The lender would not have been reporting the late payments on your credit report all that time, but will report the foreclosure. That will definitely impact your credit.

Will you be able to get future mortgage loans? The bankruptcy will impact your credit for the next few years. Even though the bankruptcy notation stays on your credit for 10 years, you can get new credit sooner. Obtaining credit after bankruptcy is not impossible and your new husband could help you establish new, post-bankruptcy credit. Even though I do not endorse co-signing, it is a way for your current husband to help rebuild your credit faster.

You cannot expect to get a mortgage loan immediately after filing. Lenders want to see that you have established post-bankruptcy credit and confirm the bankruptcy case was filed more than two years ago.

As I said, this is an option, but most things are not as easy as we would like them to be. You will have to do some research and may need to talk to a bankruptcy attorney before you take this approach.

source: foxbusiness.com

The Many Flavors of Loans

Money can be lent to those in need, at a reasonable rate, from a pool of money that comes from investors and savers. When the lending institution provides money for consumers to borrow, either secured or unsecured, the practice is known as providing a consumer loan. These loans do not include loans such as mortgages, which are reserved for solitary purposes. The different kinds of consumer loans each carry a different set of rules regarding who can borrow, for how long, and so on. What will be available to you will greatly depend upon your credit rating, income and all of the usual measures.

- Personal Line of Credit

These accounts are offered by personnel of the lending institute. These accounts offer a flexible way to use credit, because funds are pulled out as needed, and the interest payment will adjust every month. They are typically only given to worthy creditors, with a maximum placed upon the amount that can be lent. Creditors will also typically offer the prime rate + 1%.

- Overdraft Protection

This account affords protection to a deposit account from being overdrawn. The amount over what is lacking becomes a loan which accumulates interest. This sort of account protection is especially handy, since it allows you to avoid bounced check fees and the other problems that come with having a check or payment not go through.

- Credit Cards

A credit card is in effect a loan system, where instead of purchasing items yourself, the credit card company pays for your item, and you then become responsible for paying the company back, usually with an interest applied.

- Credit Card Cash Advances

Available from their credit card, these loans are known as cash advances. These loans immediately begin to accumulate interest, which is typically higher than for a cash advance on a credit card. These enable you to get cash in hand, but at the cost of a much higher interest rate than for an actual cash load or line of credit.

- Demand Loan

If the borrower has good credit, then they may be able to arrange for a demand loan. These loans require an agreement to repay in full by a certain date, while just the interest is due monthly and the lender can recall the loan at any time.

- Installment Loans

These loans offer a set interest rate, a repayment schedule, a maturity date, and can require certain security features. Basically, it is a set number of payments of a set amount that you are required to pay.
These are a few of the kinds of loans that a person can get through a financial institution. There are other kinds of loans available that have other rules to their use. What will be available to you will greatly depend upon you credit score and situation, what you can offer as collateral, the amount of income you possess, and much more.

source: richcreditdebtloan.com

What alternatives are there to bank loans?

Unless you have failed to pick up a newspaper in the last four years, you will be aware that bank lending to both consumers and businesses has plummeted.

Despite various measures designed to ease the flow of credit, the truth is that for many people it has never been more difficult to access funds from traditional lenders.

Inevitably, that has led consumers and businesses to explore other avenues – some good and some not so good.

Today, you can apply for finance from various institutions, including banks, online pawn shops, credit unions, payday loan and cash advance providers and more.

Below, we explore each of these options and look at the pros and cons associated with them.

Online pawn shops

The concept of an online pawn shop may be one that is difficult to get your head around given many people’s ideas of what pawn shops are like.

Instead of loaning against cheap jewellery and various household items, the new, high-end asset lenders that are emerging provide loans against valuable items ranging from fine wine to prestige cars.

They provide short-term loans taken out for between one and six months and once the loan has been repaid, your assets are returned to you.

Interest rates tend to be higher than those associated with bank loans, however, the loans are designed to cover you for a short period of time and only become unsustainable if you fail to use them properly.

Many middle-class individuals who are asset-rich but cash-poor use pawnbroker loans to ease their immediate financial concerns, so if you are of the opinion that pawnbrokers are for the poor and unemployed, you are mistaken.

Payday loans

Payday loans have been heavily criticized in recent years as they have become more popular.

Essentially, you borrow a small amount for anything between a few days and one month and repay the loan once you have the funds to do so.

However, these loans charge an eye-watering amount of interest and many firms have been guilty in the past of imposing hidden charges, therefore making them even more expensive.

The real problems arise when borrowers cannot meet the repayment date and the debt is rolled over, which can see it snowball to such an extent that people cannot afford to repay it at all.

Credit unions

Credit unions are small not-for-profit bodies established and controlled by members with a common link.

That link may be through a trade union, a local community or another connection. There are no shareholders to worry about and any profit taken by the organisation is used to develop it further.

The interest rates charged by credit unions are often lower than those attached to pawnbroker loans and are significantly lower than payday loans. Also, terms can range from five years to 25 years depending on whether the loan is secured or unsecured.

Another benefit is that as a member of the union, you have voting rights and an influence over how it moves forward.

As you can see, banks are not the only places you can go if you need a loan.

Change can be hard for some people to handle and if you are one of them then that is fine. However, the financial landscape is not what it was four years ago.

Doors that were once open may not be any more, but new doors have opened in their place in the form of pawnbroker loans and other alternative forms of credit.

source: everythingfinanceblog.com

Personal Loans With Bad Credit: The Advantages of Instant Access Financing

Not everyone has the kind of collateral needed to secure a loan approval quickly. Even when an applicant has a good credit history, the challenge of getting approval on an unsecured loan can be quite hard, so when seeking personal loans with bad credit, the difficulty is understandably much greater. But there are loan options available.

The problem with pledging an item as collateral is that, should the loan be defaulted upon, it is lost. And when the item is a family heirloom or a piece of valuable jewelry, losing that collateral for the sake of $3,000 or so can be a bitter pill to swallow. But there are other options when hunting for guaranteed loan approval.

These are basically fast access personal loans that require the minimum time for approval. They are usually referred to as payday loans, but there are large loan options too, providing sums greater than $1,500. But these loans come at a price, and compromises must be accepted before funds can be accessed.

What Creates a Bad Credit Borrower?

Many people are categorized as bad credit borrowers, but while this once occurred as a result of poor money management and unreliable borrowing, the impact of the recent economic crisis has seen many honest borrowers slip down the credit rating table. As a result, there has been a jump in the number of people seeking personal loans with bad credit.

A low credit rating can come as a result of a county court judgment, or a bankruptcy ruling or even with a growing number of loans that have fallen into arrears. Of course, they can all affect the chances of getting guaranteed loan approval, but it is important to understand that they cannot halt the chances of getting approval itself.

The problem is that, when it comes to applying for a personal loan, a higher interest rate is charged, raising the cost of the loan and providing the opportunity for lenders to reject the application. This is where a no credit check loan with same day approval can be so valuable.

Terms To Consider Before Applying

As great as a no credit check loan might seem to someone seeking a personal loan with bad credit, there are negatives to the deal too. The fact that a low score can be ignored and have no bearing on the application process, is a boost but that convenience comes at a cost.

These loans practically offer guaranteed loan approval, but they are also considered the most expensive loans on the market. Because lenders are foregoing a credit check, they are leaving themselves vulnerable to borrowers with very bad track records in repaying loans. So, a higher interest rate is charged to cover their potential losses, sometimes as high as 30%.

What is more, the repayment term is usually very short. A typical payday loan is repaid within 30 days, while larger instant approval personal loans may require between 90 and 180 days.

Find the Best Loan

With these factors to consider, it can be hard to find a loan that is affordable. But there are lenders out there that specialize in lending to bad credit borrowers, mostly to be found on the Internet. Take your time in assessing the deals available there before making a decision on where to apply for a personal loan with bad credit.

When there is pressure to find funds, these fast access loans are definitely the best choice out there, with the much-needed cash accessed as quickly as in just a few hours. With guaranteed loan approval, this means that a lunchtime application can result in the money in the hand before 4 pm, so even financial emergencies can be dealt with very quickly through a personal loan.

Want to learn more about Guaranteed Bad Credit Personal Loans and Bad Credit Home Loans? Please subscribe to my channel.

Article Source: http://EzineArticles.com/?expert=Mary_Wise

Unionbank expects double-digit consumer loan growth to continue

MANILA - Union Bank of the Philippines is confident that its lending business would continue to grow by 30-35 percent on the back of a "very robust" expansion of the economy

Victor B. Valdepeñas, Unionbank president and chief operating officer, said the loan growth recorded in the first six months is sustainable, but would slow down towards the end of the year.

He said lending grew 20-25 percent, with mortgages registering the biggest expansion at 35 percent, followed by auto loans at 30 percent.

"If you just look at the skyline of Metro Manila, never have you seen in the history that you have seen as many equipment and as many high-rises, as many big projects coming out - horizontal, vertical and all over - that is replicated all over in other areas. There is a construction boom, particularly in the residential and mixed-development area. So that is a phenomenon that started years ago continues to be very, very strong," Valdepenas said.

The bank’s auto loans dipped earlier in the year but was already picking up, whereas credit cards will not be as strong as the other two consumer lending, he said.

Lending to corporations is seen to grow by 19-20 percent since Unionbank is participating in the public-private partnership program of the government, Valdepenas said, adding that the lender has not technical expertise on such projects.

Besides direct lending, Unionbank is also participating in capital-raising exercises, such as San Miguel Corp.’s preferred share sale. Valdepenas said the bank has taken up P6 billion of the P80-billion transaction, both for Unionbank's own account, as well as for its clients.

"So you see the growth is not only coming out of the traditional lending but also in the capital market. We're happy to participate in terms of funding viable projects of big corporations, corporations that are dominant players in the Philippine economy," he said.

Non-interest income would still be "strong" but not as robust as in the first semester when Philippine banks saw their trading income surge with the performance of the local stock market.

"I won't expect it will be as strong as the first half. The reason behind is as you approach a certain level, the drop in yields is now muted and limited. And that is true for the global environment including the Philippines," Valdepenas said.

Against the backdrop of a strong macroeconomic environment, Unionbank is on track to meet its 10-15-percent net income growth target for the year. During the first half, the lender’s profit surged 42.12 percent to P4.07 billion.

Valdepenas said the bank does not have to raise additional capital as many of its investments are in low-risk weighted assets such as government securities. Unionbank is still "comfortable" even with the implementation of Basel III, which requires higher capitalization for lenders.

Towards the end of the year, the lender will have almost 200 branches nationwide, having just opened new ones in Medical City, Makati and Nuvali in Sta. Rosa, Laguna.

source: interaksyon.com

Schools Pass Debt to the Next Generation

The deleveraging of America is well under way, as individuals and companies recover from the excess borrowing that helped to produce the boom and left many people vulnerable when the bust arrived. Household debt is down nearly $900 billion over the last four years, partly from repayments and partly from defaults.

During the crazy times, homeowners could get mortgages that allowed them to pay less than the full amount of interest being charged, with the rest added to the principal. Commercial property owners generally paid the full amount of interest, but did not have to repay any principal until the loan matured in five or 10 years. For both homes and commercial properties, lenders were willing to rely on extremely optimistic appraisals.

For property buyers, those days are gone,

But for some borrowers, it is still possible to borrow now and pay nothing for decades.

There is a furor in California because the Poway Unified School District, in San Diego County, borrowed money last year on terms that even Countrywide would have laughed at during the boom. It will not pay a dime of interest or principal for more than two decades. Only then will it begin to service the bonds.

It is paying a high price. Although it has a good credit rating — Aa2 at Moody’s and AA– at Standard & Poor’s — it will eventually pay tax-exempt interest of up to 6.8 percent for the borrowings. When it issued more conventional bonds last year, it paid rates that were much lower, ranging up to just 4.1 percent.

For borrowing $105 million in 2011, taxpayers — or perhaps it would be more accurate to say the children and grandchildren of today’s taxpayers — will pay $877 million in interest between 2033 and 2051.

In San Diego, the bond issue first gained attention on The Voice of San Diego, a Web-based publication, which published an article this month headlined “Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools.” As the Voice noted, others, including Joel Thurtell, a Michigan blogger, had written outraged articles about the bond issue. But it was the Voice article that attracted national attention, including a report on CNBC.

It turns out the Poway bond issue is not unique. This kind of borrowing has been going on for years, particularly in California, where the tax revolt that began with Proposition 13 in 1978 has made it harder and harder to finance education or other local government services. Assorted propositions approved by voters have made it very difficult to raise taxes at all.

According to a Thomson Reuters database, school districts issued nearly $4 billion in such bonds last year, and have sold almost $3 billion more this year. Back in 2006, when the credit boom was in full bloom, $9 billion worth of so-called capital appreciation bonds were sold.

The Poway issue is unusual in delaying interest payments for so long, but there have been others. Its neighbor, the San Diego Unified School District, borrowed $150 million in May, promising to begin payments in 2032.

School districts’ logic for borrowing for construction projects always was that those who benefit should pay for a construction project. In the case of the Poway bond, however, it is at least possible that it will be the children of today’s students who end up paying the bill. By then, many of these school buildings may be obsolete, or at least in need of another refurbishing.

In a statement, the Poway district pointed out that the bond issue was the fifth part of a plan to modernize the 24 oldest schools in the district, adding that while that bond “has a total repayment ratio of 9.3 times the principal amount,” the overall borrowing program has a repayment ratio of just 4.2. That means that for every dollar borrowed, $3.20 in interest will be paid.

To put that into perspective, a 30-year mortgage at the same 6.8 percent interest rate would require $1.35 in lifetime interest payments for each dollar borrowed, or a repayment ratio of 2.35.

“The most important value received from the building program that is difficult to quantify is the educational value of providing today’s students with quality learning facilities,” said John Collins, the superintendent of the district, which has 34,000 students. “It is also difficult to calculate the dollar value of savings realized by avoiding the inflated construction costs of postponing the completion of the building program for a decade or more.”

Your guess may be as good as his as to just how inflated those costs will be. But it is hard to believe that the district would not have been better off borrowing on terms that called for repaying the loan more quickly. The interest rate would have been lower, and the power of compound interest would not have caused the total payments to rise into the stratosphere.

But the option of getting reasonable financing may not have been available to the Poway district, or to many of the other districts that have resorted to these capital appreciation bonds. Poway officials had promised not to raise taxes, and this way they won’t have to. At least not until 2033. They set the payments to begin after earlier bonds are paid off.

Nationally, it appears that fewer and fewer school districts have been able, or willing, to find ways to finance new buildings — or even to pay teachers, as property tax revenue plunged with the deflating of the housing bubble and pinched states reduced assistance. State and local governments are spending less and employing fewer people now than they were before the recession. Adjusted for inflation, state and local investment in buildings and other assets is at the lowest level since 1998. Over the last 30 months, the economy has gained about half a million jobs in manufacturing, and lost nearly as many in state and local government.

Should districts issue such bonds? It is not an easy question to answer. Much of this expensive borrowing is a result of local officials searching for a way to meet their responsibilities at a time when opposition to taxes has become a mantra. This generation will not pay for what it needs, so some of its leaders have decided to saddle future generations with the bills.

source: nytimes.com

TeaM Energy secures $220M loan from Security Bank, Metrobank

MANILA - TeaM Energy Corp. secured a $220 million loan from Security Bank Corp. and Metropolitan Bank and Trust Co.

In a statement, SB Capital Investment Corp. said it arranged the 12-year mezzanine loan facility, which TeaM Energy will use to refinance a loan from PPF Co. B.V. TeaM Energy tapped PPF to acquire Mirant Asia Pacific Ltd. in 2007.

The SB Capital loan syndication marked the first time TeaM Energy obtained a loan from Philippine lenders.

“The mezzanine lenders welcome the opportunity to support Team Energy’s projects to produce reliable and stable energy sources. We are pleased to be a partner in efforts to develop a strong energy sector which is a key driver in our country’s economic growth,” siad Alberto Villarosa, president of Security Bank.

TeaM Energy is a joint venture between two Japanese companies, Marubeni Corp. and Tokyo Electric Power Co.

TeaM Energy is one of the largest independent power producers in the Philippines, with over 2,000 megawatts of installed generating capacity, including the 1,218-megawatt Sual and the 735-megawatt Pagbilao coal-fired power plants. Both power plants have contracts to sell their output to state-owned National Power Corp.

“The new mezzanine loan facility is Team Energy’s maiden fund-raising exercise from the domestic market. Notwithstanding the subordinated nature of the loan, the $220 million mezzanine facility achieved a successful financial close amidst a very tight timetable,” said Toshiro Kume, executive vice president and chief finance officer of TeaM Energy.

source: interaksyon.com

Some Important Points for Comparing Home Loans

Buying a house can be an exhilarating experience. Every home owner in NZ has felt the rush of surveying houses for sale, finding that perfect bargain and making the life changing decision to buy. The vast majority of us have then gone through the process of applying for a home loan to make that dream a reality. When deciding on a home loan, there are a number of factors that the savvy buyer should take into consideration before signing on the dotted line.

When finding a house, you will inevitably shop around until you locate the best fit for your needs. The same should always also be true for a home loan. Be sure to search far and wide for the most competitive terms and suitable structure for your financial situation. When buying a house, what you are really signing up for is a loan. It only makes sense then that you would apply the same level of care and reasoning to your choice of loan provider as you would to choosing your new address. Just as there are a plethora of houses for sale in NZ, so too are there an a number of reputable home loan providers who will be willing to talk you through anything you need to know and work with you to put you in your new home.

It is also important to take ownership of your own financial situation, and stay objective in deciding whether you can feasibly pay back the loan. Take any offer and work out what your monthly repayments would be, and be sure to include the possibility of interest rate increases if the terms include a floating rate. This will often seem cheaper in the short term, but you should also factor in the possibility of having to make larger repayments in the future. If you are sitting on the borderline of just barely being able to afford a loan then it is usually a good idea to take a step back and rethink whether you can actually afford this house.

Though you may be emotionally attached to a new property, there are plenty of lovely houses for sale within NZ and it is better to find one that you can definitely afford rather than signing up for an untenable loan. Your real estate agency can often help talk you through the home loan process, assisting you in drawing up a budget and facilitating a dialogue between you and your loan provider. So long as you stay smart and only sign up to what you can actually afford, you are bound to find long term happiness in the house of your dreams.

For New Zealand house rentals go to Century 21. Article Source: http://www.articlebiz.com/article/1051548536-1-some-important-points-for-comparing-home-loans/

PSALM To Refinance P14-B Loans

MANILA, Philippines — For its planned borrowings of P85 billion this year, the Power Sector Assets and Liabilities Management Corporation (PSALM) has indicated that P14 billion will be used to refinance outstanding obligations.

In the company’s list of loans, it was culled that two major payments are due to the Bureau of Treasury this year, amounting to P11 billion and P3 billion, respectively.

“We will refinance the P3.0 billion and P11-billion loans. The plan is to the extent that the privatization proceeds are less than the maturities, PSALM will have to refinance such deficits to pay off the maturities,” PSALM president Emmanuel R. Ledesma Jr. said.

These amounts were previously granted to the National Power Corporation for its general funding requirements at fixed interest rates of 9.875 percent for the P11 billion and 10.375 percent for the P3.0 billion. After privatization, all of NPC’s loans and other obligations were transferred to PSALM.

The other loans due to mature this year are those with the Overseas Economic Cooperation Fund (OECF) of Japan amounting to P223 million and that of BDO for P50 million, but Ledesma emphasized that these were already settled in advance.

The PSALM chief executive told media that options for the planned loan procurement are still being explored, but it will certainly be the Department of Finance (DOF) which will do the borrowings on behalf of the company’s funding needs.

He noted that while cash infusion through offshore bonds is being considered, there are still key parameters being weighed, such as the denomination and the timing of the issue.

Ledesma emphasized that the company’s borrowings this year will be utilized both for refinancing maturing debts as well as to fund its operations.

The amount, he said, is still based on prospects that the company would not be able to secure regulatory approval on its filing for P140 billion worth of universal charge (UC) recoveries.

However, with the recent approval of the Energy Regulatory Commission (ERC) on its application for generation rate adjustment mechanism (GRAM) and incremental currency exchange rate adjustment (IECRA) deferred costs, Ledesma conceded that this will help trim down the company’s cash deficit. Its impact on the proposed borrowings though is still being assessed.

“Any increase in GRAM and ICERA will improve PSALM’s cash flow. This should lessen our operational deficit,” he said.

The ERC has granted a P0.6904 per kilowatt-hour (kWh) hike in NPC charges for the Luzon grid; P0.6060 per kWh for Visayas; and P0.0442 per kWh for Mindanao. (MMV)

source: mb.com.ph

Lloyds expects lower income in 2012

London (Financial Times) -- Lloyds Banking Group made a pre-tax loss of £3.54bn in 2011 after a big reduction in loan impairment losses was unable to compensate for a previously announced £3.2bn charge arising from the payment protection insurance mis-selling scandal.

The partly state-owned bank added that income was likely to be lower in 2012 than it was in 2011 and confirmed it would miss key medium-term financial targets. However, it also predicted that impairments -- losses taken on bad loans -- would ease faster than expected this year, while cost savings were also set to accelerate.

"I don't think this is a profit warning," said António Horta-Osório, chief executive. Lloyds shares, which have rallied in recent weeks after a steep decline in 2011, fell 2 per cent to 35.86p in early morning trading in London on Friday.

The £3.54bn pre-tax loss compares with a profit of £281m in 2010. On a "combined businesses" basis -- a Lloyds-devised measure of underlying performance -- it posted a £2.69bn profit, an increase of 21 per cent.

Income net of insurance claims -- a measure of sales for banks -- fell 17 per cent from £24.96bn to £20.77bn, reflecting subdued lending demand, disposals of non-core assets and a lower lending margin.

Impairments dropped 26 per cent to £9.79bn on a combined businesses basis. Mr Horta-Osório said a similar reduction was expected in 2012, adding that this guidance was stronger than the market had been expecting.

He said the predicted improvement reflected the disposal of non-core assets as well as more astute new lending: "The quality of new business is better."

Lloyds also said its restructuring programme would yield cost savings more quickly than expected, with an extra £200m pencilled in for 2014 without any increase in predicted job losses.

"It is a matter of going quicker than going deeper," said Mr Horta-Osório, who returned from two months of medical leave last month.

Lloyds said in November it might not be able to deliver some medium-term, mainly income-related goals. On Friday, it said it expected that the achievement of these targets would indeed be delayed.

It said the downbeat prediction that combined businesses income in 2012 would be lower than the £21.12bn posted in 2011 reflected a continued reduction in non-core assets, weak demand for loans, higher wholesale funding costs and low interest rates.

Net interest margin fell from 2.21 per cent to 2.07 per cent and is expected by Lloyds to dip below 2 per cent in 2012. Its core tier one capital ratio, the key measure of balance sheet strength, rose from 10.2 per cent to 10.8 per cent at the end of 2011.

Source: http://edition.cnn.com/2012/02/24/business/uk-lloyds-loss/index.html?hpt=ibu_c2

Things To Consider in Buying a New Car

If you are thinking about buying a new car you are probably considering from where to get a loan. Assuming you live in the United Kingdom and want to take out a car loan, you should consider all the deals available and shop around for the best one. Each loan company has different criteria so you need to consider all of these before making a decision. If you do not plan wisely you may be paying a high rate of interest which could cause financial problems as the United Kingdom is not a cheap place !


These five points may be useful to consider.


Look at the options :
Keep in mind the various choices that are available to you in the UK. There are so many that it makes good sense to take time and effort in choosing the right car loan for your circumstances.

A secured or unsecured loan :
Unsecured loans in the UK are good for car buyers who do not want to have their homes offered as collaterol . or indeed if they have no property to offer anyway. The advantage of unsecured car loans are reasonably low interest rates, currently between 6 - 9%. Also the monthly repayments are more manageable. The disadvantage is that you must have a good credit rating to apply for such a loan.

Choosing a variable or Fixed Rate loan :
Both options have advantages and disadvantages. With a variable rate loan there is a chance of rate increases in the future, however, if the rate goes down, you could benefit financially. Interest rates on fixed loans are constant for the life of the loan, so managing the loan is much easier.

Balloon payments :
The basic thing with Balloon payments is that as you have agreed to pay the full amount at the end of a predetermined month, you have no worries about affording monthly repayments. Advantages of Balloon payments are attractive due to there being no risk involved

Do you approach car finance companies ? :
There are many car finance companies in the UK that offer loans to people whether their credit rating be good or not so good. For people with bad credit ratings this option is a distinct advantage as they are able to buy a car, whereas under other circumstances this would not be possible. However this type of loan is often considered disadvantageous, as such a loan is seen as high risk lending and and consequently carries a high rate of interest.