How To Keep a Personal Loan From Ruining Your Relationships

When we face financial emergencies, our first instincts can often lead us to the Bank of Family and Friends. It’s comfortable, familiar and feels like there’s no strings attached. However those warm feelings can give way to tension and arguments. As new research suggests, borrowing from loved ones can drive a permanent wedge between our relationships.

According to a Jason Hardin study just published in the Journal of Economic Psychology, the personal lender-borrower relationship is fraught with mixed signals. The study concluded that:

Borrowers are more likely to think that the lender initiated the loan.
The borrower viewed loans that that turned delinquent as gifts.
Lenders were more likely to think that delinquent borrowers avoided encounters while borrowers were mostly unaware of these sentiments.

With such vague and fuzzy borrowing terms, it’s no wonder that a loan can turn you and your loved ones against each other. But the need for spare cash tends to outweigh the potential for a relationship derailment. The National Bureau of Economic Research found that half of all Americans would have trouble coming up with $2,000 in an emergency.

While handouts from family, friends or acquaintances may seem like less of a gamble than borrowing a payday loan, it’s crucial to understand the consequences you could face when opting for the informal personal loan route. In some cases, you just might find that a payday loan could better serve your bonds between family and friends.
Personal Borrowing That Turns Sour

The National Foundation for Credit Counseling (NFCC) estimates that 17 percent of Americans borrow from family and friends for rainy day expenses. These loved ones lend money with the best intentions, often invoking a casual “pay-back-whenever” vibe that’s actually loaded with expectations.

When loan terms lack a clear repayment plan with defined dates, interest rates and amounts, you end up with a perfect recipe for miscommunication, bringing attention to dynamics that only money could create.

Rich Friend, Poor Friend

A loan can be a fast track to underscoring the bank account imbalance between friends. Because you aren’t financial equals, you may feel like you can’t be your lender’s equal at all. This may compel some to feel like they have to use the cash in a way that the lender dictates. Such a relationship can be a breeding ground for resentment from both ends.

Making Light of a Loan

When you borrow from Mom and Dad or your best friend, you might not take it as seriously as you take your bills or bank statements. You’re not concerned with a seedy collections agent knocking on your door or red ink statements inundated with finance charges.

What personal borrowers may not realize is that this money still carries a sense of pressure for the lender’s bank account. When a loan’s urgency falls off a borrower’s radar, it could irritate generous family and friends to the point where they don’t feel like they can trust you at your word.

Awkward Exchanges

If you see a friend or family member you have yet to pay back, the loan becomes that big hulking elephant in the room. Money is a sensitive, five-letter taboo word. Not only is it difficult to ask about how repayments are coming along but you‘ll only increase tensions with the request to ask for the cash back.
The Payday Loan Alternative

If you’ve exhausted loan options from family and friends, or you’d rather avoid the potential conflict of personal borrowing altogether, payday loans can provide an advantage in these situations.

Eliminating Emotion from the Equation

You don’t have to be friends with a payday loan, you just have to respect the repayment terms. While your parents or friends may pass judgments about how you spend when you still owe them, a payday loan is a sheer business transaction.

There are no embarrassing encounters or hurt feelings. The terms are in black and white: you apply for the loan, get approved for a specified amount, and repay the loan with interest using your next paycheck.

Increased Accountability

When loved ones give you cash under few conditions that hold you responsible, they may enable you to squander it. With a payday loan, repayment becomes a priority rather than an afterthought.

Because a payday loan carries such strict repayment terms and high interest, there’s little room for error. You have to worry about late fees, the possibility of debt collectors for delinquency and credit dings.

While these possibilities may scare you, they may be the swift, kick-in-the-butt incentive you need to get your finances in order. The payday route may give you the chance to zero in on a loan for short-term, emergency expenses to get you back on your feet rather than supplying long-term, daily needs.

Reducing Relationship Inconveniences

Maybe your parents sacrificed their anniversary spa retreat to spot you cash. Perhaps your best friend had to cut back on grocery and clothing expenses for six months to safely cover the cost of your loan. Either way, your loved ones might make sacrifices for your benefit.

When used properly, a payday loan eliminates the financial burden for you’re the personal lender in your life. It can also be a time consuming, emotional process to approach family and friends for the money. If you don’t have the luxury of waiting for money in a pinch, the accessibility and ease of the online payday loan process may allow you to get it faster than it would take your parent’s to go to the bank and dig into their savings account.

Use a loan, tend to the repayments and get on with your life. Sometimes when you separate finances from your relationships, it can be the best way to preserve both.…

It’s Time To Start Thinking About Retirement

The lifespan of the average American is at an all-time high, meaning many people will spend many more years in retirement than expected. Since a payday loan advance may no longer be an option once you leave the workforce, it’s important to plan for the future.

According to a recent survey from ING Direct, 44 percent of Americans between the ages of 24 and 35 years old don’t know how to start saving for retirement. While these people may seem young to be thinking that far into the future, it’s never too early to get started.

Develop Your Retirement Goals

To have enough money saved for retirement, you need to start thinking about numbers, advises the news source. Most people hope to retire by the age of 65, leaving them out of the job market for nearly two decades.

It’s recommended that you try to have a retirement account balance that is a third of your annual income by the age of 30, but twice your income by the time your reach 40. This requires saving between 11 and 15 percent of your annual salary. Once you start putting money away, compound interest can work in your favor and allows your money to mature over the years.

To get a specific idea of how much you’ll need based on your current income and preferred lifestyle, there are a number of planning calculators online that can help you on your path to retirement.

Pay Down Your Debt

Car loans, mortgages and credit card debt are all drains on your funds that can add up quickly once you’re on a fixed income. Consolidating debt at more affordable interest rates can help if you still have some left over once you retire.

To start paying down debt, concentrate on your accounts with the highest interest rates first while at least staying current on others. Over the years, accounts with higher rates can end up costing you more money, especially if you have a sizable balance.

Don’t Wait Too Long

Although it’s a good idea to pay down your debt before retirement, many people fail to start saving until balances are totally dealt with, says U.S. News and World Report. This can have a negative effect on the amount of time your money has to mature and make more money through interest.

Instead, open a tax-advantaged retirement account as soon as you enter the job market. If you’ve been working for a few years and still haven’t done this, do it as soon as possible.…

More Fuel-Efficient Cars On The Horizon

In order to cope with the rising cost of gasoline and new legislation meant to regulate automobile emissions, car manufacturers are expected to make vehicles much more fuel-efficient in the coming years.

The current cost to fill up a gas tank can be detrimental to a household’s finances. If they need some extra funds for a little breathing room until their next paycheck arrives, they may be able to utilize a cash loan.

Nearly 88 percent of Americans say the country needs to reduce its oil consumption and claim the next car they purchase will get at least five more miles per gallon than their current vehicle.

Meanwhile, nearly three-quarters of respondents think these new fuel economy standards scheduled to go into effect over the next decade are a good idea, though the new standards are expected to increase the average cost of vehicles. Fortunately, 66 percent of consumers said they are willing to pay more upfront for a car if it means they’ll save money on gas in the future.

Further, as fuel-efficient vehicles continue to become more common at car dealerships, Cooper anticipates overall sentiment toward hybrid and electric cars will improve. In the meantime, there are a number of ways to easily save on the cost to fill up your gas tank.

Shop Around

Like many other products, the average price for a gallon of gasoline can vary depending on where you buy it. With this in mind, it would be beneficial to compare costs from a number of different locations.

However, don’t waste fuel traveling around looking for the best deal. Instead, try utilizing mobile applications such as GasBuddy, advises U.S. News and World Report. This program gives you up-to-date prices from stations in your area and can even provide you with the most fuel-efficient route to get there.

Get Your Vehicle Serviced

Not only does taking your car to a mechanic for an annual tune up help it burn less fuel, it can also help the vehicle retain its value.

The average cost for a tune-up will vary from vehicle to vehicle, but the long-term savings could be very beneficial. A car’s engine has literally hundreds of different moving parts, and an issue with just one of them can instantly reduce the number of miles you get per gallon. In addition, inflating your tires to the ideal pressure can also help.

Don’t Brake As Often

Even the smallest changes to your driving habits can help your vehicle become more fuel-efficient. Although you need to use your brakes to avoid collisions, stop at intersections and in countless other situations, try to avoid using your brakes to reduce your speed, advises the news source.

Instead, simply let your foot off the accelerator and let the vehicle slow down on its own. This can be especially beneficial while driving on the highway. Try this and you might be surprised at how less often you’ll have to fill up your gas tank.…

Student debt is a major issue which will influence the financial habits of Americans for quite some time

Meanwhile, graduates who are able to find jobs after they leave school may be able to use a payday loan advance to cover necessary expenses if loan payments paint them into a financial corner. The total student debt load recently surpassed $1 trillion, with the average graduate leaving school with $25,000 in loans. This has forced record numbers of young adults to move back home while they work to get their financial footing. However, new state-sponsored programs could make the act of moving to small towns with dwindling populations a good investment for graduates.

Kansas recently implemented a program to attract recent graduates to areas of the state that that have experienced rapid population losses in recent years. Young adults are offered an opportunity to take a state-sponsored job that offers up to $15,000 toward student debt repayment. The program, which is only in its first year, attracted 411 applications from 33 different states.

So far, Kansas has allocated $1 million toward the program and concentrates on 50 counties that have experienced population drops of at least 10 percent over the past decade. It’s believed that young adults who relocate to these areas will not only be able to help themselves, but also spark activity in local economies and housing markets.

Recent graduates in the healthcare field are especially targeted by such initiatives from private companies, since they often graduate with such high debt loads. Tenet Healthcare, which owns and operates facilities across the country, has become an advocate for these programs and has even offered similar perks since 2022.

Since this is still just a budding initiative, many graduates may not have this option, and will have to pay off their student loans the old-fashioned way. However, according to Real Simple, there are ways to cope.

Pay Variable Private Loans First

This type of loan accounts for an estimated 15 percent of total student debt and is often provided by banks and credit unions, rather than the federal government.

Based on current developments in the economy 2022, rates on these loans could increase significantly in the coming years. This could make monthly payments unmanageable, so it would be a good idea to pay them off before moving on to other student loan types.

According to Real Simple, if you can, try to pay double the required monthly amount, as this could cut the lifespan of the loan dramatically. At the same time, only make minimum monthly payments on federal loans, which often have fixed rates.

Select A Federal Debt Repayment Program That Fits Your Finance

Federal loans make up the remaining 85 percent of the total student debt load, and there are a number of different repayment options. The most popular is often the standard plan which requires a minimum payment of $50 each month for up to 10 years. However, there could be some issues with this approach.

Instead, graduates may want to opt for an income-based repayment plan. This sets a cap on your monthly payments to a reasonable percentage of your income. Meanwhile, if you have any debt left over after 25 years, the balance will be forgiven.…