Should you take out an Income Cash Advance?

Many finance firms are wiling to offer a sum of $1000 to those in need of a short term loan, provided the beneficiary has a provable source of income and agrees to repay the amount as per the firm’s outlined repayment schedule. However, needless to say that you would end up repaying more than you acquire from the cash advance firm. This is because the cash advance firm is likely to charge an interest on such credit lending.

Getting hold of a $500 cash advance won’t be easy by any means. You would have to carry out a preliminary research of reputable cash advance firms willing to lend $1000. Though it’s easy to find cash advance of around $250 to $500, you might have to shop around a bit in order to bag $1000. It is recommended to keep several options open during your quest for a cash advance. This way, if one cash advance firm leaves you high and dry, you could easily switch to another.

Sums of $1000 and below are considered trifling amounts by bigger loan firms’ standards. Therefore, it is highly unlikely to acquire a $1000 loan from a loan firm. However, cash advance firms are a viable option for people in urgent need of around $1000. Cash advance firms would gladly approve your application, provided you have a provable income source. But, cash advance companies normally charge a higher rate of interest relative to bigger loan firms.

All in all, cash advance is a nice and quick way to acquire that much needed cash in a jiffy. But since the rate of interest is on the higher side, it’s best to take up a loan from a loan firm, if possible. In general, you should turn to a cash advance firm only when you have no other means of acquiring cash.

If you live in  the UK , see what the most common types of household units are and what they like to spend their money on.  Learn more about the basics by checking out our infographic.

QuickQuid provided me with this Infographic and they’re one of UK’s premier, short-term cash lenders.

Understanding Investment Risk

If you are keen to start your very first investment then you are sure to have done a lot of research into which sector best suits you. But before you begin to invest your hard earned money, you might be interested in learning about all the different types of investment risks.

These days you can invest in almost anything, from gold and silver on BullionVault to luxurious holiday homes. Each have their own risk and no investment is 100 per cent safe and is a guaranteed win. Many people make the mistake of thinking that to buy gold bullion is either “safe” or “risky.” However, it cannot be categorized so simply. There are several types and levels of risk you should know before you begin investing.

Market Risk: This means that your investment could lose its value in the market.

Interest Rate Risk: This means that you could lose value due to a change in interest rates. This only applies to fixed-income investments.

Reinvestment Risk: There is a risk that your investment will be reinvested at a lower rate of interest when it matures.

Political Risk: If there is political action in a country where you have placed your investment then you could lose value. Developing countries are particularly susceptible to this.

Liquidity Risk: This means that there is a risk that your investment will not be available for liquidation when it is needed. This mainly applies to fixed-income investments or real estate property which may not be able to be quickly sold at an equitable price.

Purchasing Power Risk: If there is inflation in the market then your investment could lose its purchasing power. This risk applies to fixed-income investments.

Tax Risk: This is the most common risk which applies to almost all investments. Tax risk means that your investment might lose its value due to taxation.

The Benefits of Locking Up Your Money for Longer

We all know how important it is to manage our money in the best possible way. Ideally this means building up an emergency fund to cover three months’ worth of outgoings in case we should need it, and then maximizing the rest of the available cash we have.

Step one is to go for tax free investments, followed by ones that are taxed by the government. However, beyond this you should think about how long you want to tie up your money for, and that’s the subject of this article.

Why is it worth tying up your money?

The most basic kind of account you can get is an instant access account. This means you can withdraw money whenever you have the need to. It’s a good idea to have one of these; indeed your emergency fund should be in this type of account.

However, any additional savings above and beyond this should be put into another type of savings vehicle. For the purposes of this article we’re not talking about stocks, shares or anything similar. We’re focusing on savings accounts – specifically those that lock in your money for one or more years.

The main benefit of doing this is that you’ll get more interest. In return for giving the bank your cash for the specified period of time, they’ll give you more interest. Generally speaking, you can find accounts that give you fixed interest for a period of between one and five years. If you want to tie up your money for five years you’ll get a rate of interest that is far better than that offered for a two year account.

Points to remember before choosing an account

There are a couple of points to remember here. Firstly, make sure you are willing to tie up your money for a specific period of time. You might be happier agreeing to a two year period instead of a five year period. It may also depend on which other accounts you have and how much cash you are happy to have available for instant access. You may prefer to have six months’ cash put away for emergencies before you tie up some cash for a higher interest rate.

Most of these accounts do allow access if you really need to get at the money, but there is usually a penalty involved. This is typically a number of days’ worth of interest lost. For example, you might lose 200 days interest. As you can see this could amount to a significant sum, depending on how much money you have in the account and what the attached interest rate happens to be.

Thus it is worth thinking carefully about the options available to you and the best accounts to get if you want to spread your money around and tie it up for a better return. Remember – there is nothing to stop you getting more than one account of this type if you want to hedge your bets over several different lengths of time.

A Comparison Between Lending Club and Prosper: Peer to Peer Lending

If you’ve been reading our blog in recent weeks you’ll know we’ve covered peer to peer lending and two services in particular: Lending Club and Prosper. This week we’re going to focus in on comparing the two, to enable you to get a better understanding of how they fare against each other.

What amount of loans has been met so far?

At the time of writing, Lending Club had filled $960,287,975 in loans since it had first got underway. Prosper has managed under half of this at $411,000,000. Prosper opened its doors in 2006, while Lending Club began life a year later.

Are the loans rated to provide different rates of interest at each club?

Yes – you’ll notice different grades of returns at each service, going from A upwards. This enables you to gauge what degree of risk you are happy with and to balance your investments in each case too, so you can spread the risk.

What is the maximum amount you can borrow if you are looking for a loan?

Prosper will lend a maximum of $25,000, with a minimum of $2,000 in place. Lending Club will lend up to $35,000 and there is no obvious minimum given.

Are you guaranteed acceptance for your loan?

No – Prosper indicates it will accept creditworthy borrowers, whereas Lending Club specifies that it approves less than 10% of the people who make a loan application.

How do you invest? Is the process similar for each one?

Yes – you invest in notes. Each note with each company is represents a $25 investment. You can choose how many notes you want to invest, although a larger amount is more likely to give you a good rate of interest, because you can spread your risk across more than just a handful of investments.

Do you get a good degree of control over your investments?

Yes you do, because in each case you can decide whether you want safer A graded investments or riskier higher graded investments. Most people balance out the risk and thus improve their chances of getting better returns while spreading the risk.

How do you decide which peer to peer lending organization to go to?

There is no simple answer to this. One person might prefer Lending Club while another might be happy with Prosper. The best course of action is to go through all the options and to read the information on each website. Compare what each organization is giving you (either as a borrower or an investor) and see which one seems best for your needs.

One thing is clear though: both Prosper and Lending Club have established themselves as leading players in the peer to peer lending market. If you like the idea of this new model of investing and borrowing, it might prove worthwhile to look into it further. Plenty of people have already had experience of peer to peer lending from one side or another: you could be next.

Lending Club: Peer to Peer Lending in the US

A form of lending that has become more prevalent in recent times is peer to peer lending. As the name suggests, it focuses on the idea of people lending to each other and to businesses, rather than using the banking system to facilitate such loans.

One leading company providing such a service is Lending Club. The club opened its doors in 2007 and has been going strong ever since. The whole process works over the internet, so providing you have access to their website you can find out more about them and open an account or apply for the loan you need.

Information for those who want to borrow

If you cannot get a loan via your bank it may be worth considering Lending Club. According to their website you can borrow as much as $35,000 from them. The application process is handled online and you pay the money back in monthly payments in much the same way as you would with other loans.

One of the advantages of looking to Lending Club for your loan requirements is the ease and simplicity of getting the quotation you need. They provide rate comparisons with other services as well, so while you should compare rates independently they do seem to offer a competitive service.

Information for those who want to invest

This is perhaps the most interesting part of Lending Club. The principle works according to Prime Consumer Notes. Each ‘note’ is an investment and while you can choose how many you want to hold, many people opt for hundreds at a minimum. Some elect to invest in thousands.

Lending Club grades the notes according to the risk that fits with them. Grade A notes are the safest and provide a lower rate of interest. Grade G is the riskiest note and therefore provides a much higher rate of interest, around three times as much as the safest note.

It is up to you how much risk you wish to take, although they suggest you opt for a mixed selection to spread the degree of risk you are taking.

Is Lending Club for you?

Clearly it is worth taking a closer look at Lending Club if you are considering either an investment or a loan of some kind. The opportunity to balance the amount of risk you are taking will appeal to those who want to exert more control over their investments. Furthermore those who wish to apply for a loan without having to jump through the hoops provided by the normal banking system may find what they need here.

Of course Lending Club won’t suit everyone, whatever side of the fence you happen to be on. However it may well prove to be a viable alternative for many people, and one that fits with personal goals and desires. With more than $900 million worth of loans funded so far, Lending Club has established itself as a key player in the industry.

What is Peer to Peer Lending?

If you spend a lot of time on the internet, especially researching various financial investments, you’ve probably come across the term peer to peer lending. You may also have seen it referred to as P2P lending. Furthermore the phrase ‘peer to peer’ can often be changed to ‘person to person’. This is because money is lent from one person to another.

Does peer to peer lending have advantages over other forms of lending?

Yes it does, and this applies to both the lender and the borrower. If you need to borrow some cash and you have been turned down by your bank, peer to peer lending offers another alternative that completely cuts out the banking system.

In terms of the borrower, there is an opportunity to lend money in favor of specific loans. The benefits here are that you have the chance to earn a far higher rate of interest than you’d get if you were to invest your money in the average bank account.

Surely there are risks?

There are risks, just as there are with most other forms of investments. It’s worth remembering that owing to the increased degree of rewards typically involved, there is also an increased degree of risk.

However this risk can be mitigated in some ways. For instance let’s suppose you have a conservative $200 to invest. Instead of piling it all into one loan, you could split it into eight different $25 loans. If you were to earn, say, an 8% return on seven of the eight loans while losing out on the remaining one, you would do better than you would if you had invested all $200 in one loan that didn’t pay back.

What are the main peer to peer lenders in the US today?

There are two major players worth investigating more closely. The first is called Prosper, which states that it provides seasoned returns of approximately 10.02%. The second is Lending Club, which boasts “twenty consecutive quarters of positive returns”, according to its website. We’ve written an in depth review of Lending Club at

Investigate fully and understand what you are investing in

As with all types of investments, it is important to make sure you understand exactly what you are getting into before you invest anything in a peer to peer lending situation. You should be well aware of the inherent risks and make sure you have a balanced portfolio to mitigate the risks, as mentioned above.

Peer to peer lending may not suit everyone, but there is certainly a market for it. If you are looking for a different way to invest that puts you in control of the specific opportunities you are investing in, this could be worth a closer look. Furthermore it gives you the opportunity to help individual people find the funds they are looking for. So it might just be the 21st century way of investing, with a bright future attached to it. We will be watching closely.

Got Credit Card Debt? Then Don’t Invest

As you’ll no doubt have noticed, the whole idea behind this website is to encourage and guide you in the process of investing money. But there are always caveats to this procedure. The main one is to note that debt should always be taken care of first. This is because most debt will have a higher rate of interest attached to it than you could ever hope to gain on an investment.

Should you clear all your debts before you start to invest money?

Not all of them, no. For instance a mortgage would not be included because most mortgages run over at least 25 years. You’d be waiting a long time to start any kind of investment at all if you were going to clear your mortgage first.

No, the kinds of debts we’re talking about here relate to credit card debt and store card debt. These will undoubtedly have much higher rates of interest than you would earn on your investments, so it makes sense to pay these off first.

Work out what debts you have

This is the most important step and also the first one you should take en route to clearing them. Write them all down and list the amounts you have in each case. For instance if you have three credit cards list all the balances and note down the rate of interest applicable to each one too.

The process of clearing them should work like this:

* Pay at least the minimum on each balance each month as requested
* Work out which credit card has the highest rate of interest
* Pay off as much of the most expensive credit card balance as you can each month
* Clear the most expensive balance first, then work on the others in turn

Note how much you spend on clearing those balances each month

The more you can put towards clearing your debts each month the better. But make a note of the cash you can devote towards this. This will help you figure out how much you can invest in other things in the future, once your debts are cleared.

The next step beyond your debts is to save enough for emergencies. Then you can get started investing properly in stocks, shares and other investment opportunities, depending on what you want to opt for.

It might seem counterintuitive to ditch any investment plans you might have in favor of going through the above steps. But the sooner you clear any debts like these that you have, the easier it will be to free up more cash to invest in the future. This will put you in a much better financial position, and you will be able to find out which investment options will be best for you as a result.

So take a fresh look at your finances now and see whether there are any debts you should be focusing on ahead of making those all important investments.

What Should You Do When an Investment Dives in Value?

When you look for investments that stand a chance of paying back more than just a meager rate of interest, you will automatically put your cash at a higher level of risk. For example if you buy into stocks and shares you may end up seeing your investment appreciate considerably – or it may take a nosedive, leaving you with less than you had originally invested.

Some investments are designed to run for specific lengths of time, while others give you more freedom over when you can withdraw your money. If your investment happens to be losing money now, what should you do?

Number one – don’t panic

We’ve seen many instances in the past where people have immediately withdrawn all their money – the classic ‘take your cash and run’ reaction. In many cases the people who hung on and sat back to see what happened found their investments returned to near normal soon afterwards. Those who cashed in early lost money, while those who waited didn’t.

Of course this is not guaranteed to happen. But it is definitely worth finding out more about the situation and the likely outcome before you decide what else to do.

Research how the situation could play out

The most important thing to do is not to rely on one single source of information concerning your investment. Before opting to withdraw your cash, make sure you find out the potential consequences of doing so. Remember that reading any news reports concerning the state of any investment are likely to be overly dramatic in many cases. Find out the real truth and base your decision on that.

Consider how long you were going to hold the investment for in the first place

It has long been the case that when it comes to stocks and shares, it is the overall performance that matters. Even in the case of a recession, when the value of shares can drop remarkably, the share value can eventually bounce back again.

If you were intending to cash in your shares or other investments anyway then it may be prudent to cut your losses now before things worsen. But if you were holding onto them for the long haul it may be better to hang onto them even through tougher times.

Remember there is no single solution for all circumstances

It is wise to remember that there is no ‘one size fits all’ solution to handling a weakening investment. You must consider a range of options before deciding which one would be best for you. But the most important thing to remember is never to react to the event without first looking at it from every angle. This will help you to determine whether you are better off cashing in your investment now, or waiting things out to see if or when they may improve.

There is always an element of risk in whatever decision you make. But in reality you could fare better by acting rather than reacting.