Remember when everyone was telling us that home computers would change the world because we’d all find practical things to do with them that would change our lives for the better?

Sort of funny, huh? Those PC evangelists of the late 80s obviously didn’t count on “adult images”, World of Warcraft, Second Life, Twitter, MySpace, or videos of dancing hamsters.

Occasionally, however, you really can use your computer to do something valuable and serious.

A loan amortization table may not be as funny as trying to figure out what happened to Ellen Fleiss, but it can actually provide you with some actionable data.

If you want to make a loan amortization table in Excel, you’ll need only a few things.

1. Excel
2. A little time
3. A good set of instruction

If you’re looking for a shortcut, you can download a loan amortization calculator template for Excel free of charge.

You can get one here. Or here. There are several other versions of the template floating around out there. If you want to make a loan amortization table in Excel, just click the link and download the file.

That being said, many people who are interested in playing with their loan numbers aren’t going to do that. As Frank the Financially Savvy Atheist notes, there are reasons why people won’t use the freely available amortization calculators on the web, and those reasons probably apply just as well to creating a table in Excel:

1. You can customize your table to suit your needs. See what is your current loan balance. You could even enter in some home appreciation assumptions to see how your equity builds up. This would be important if you are trying to see when you can get rid of PMI payments.
2. Like everything else in life, some people are DIY’ers. For me in particular, I like having amortization tables for all my loans, so I can see where I am each month. It gives me a sense of control, whether it’s a false sense or not.
3. It’s easy! Trust me.

While Frank does provide a tutorial to help you in your quest to make that Excel table (and provides some good analysis about why you’d want one in the first place and what you could do with it), I believe in getting my instructions directly from the horse’s mouth. That’s true even when the horse in question wears glasses and goes by the name of Bill Gates.

Excel is a Microsoft product, so why not start by getting instructions straight from Microsoft? Despite the fact that MS can annoy in a million and one ways, it does offer some pretty decent online documentation for this particular task. It’s a pretty straightforward ten-step process. I know, ten steps seems a little heavy. Don’t worry, some of them barely qualify as “steps” on their own.

Oh, and if you have Microsoft grudges and would prefer to use Open Office to create and use your amortization schedule, the info is still solid. It works with the open source option.

Personally, though, I’ve found that the best tutorial covering how to make a loan amortization table in Excel is probably the one at TVMCalcs. This site, related to the time value of money and financial calculator tutorials, provides a nice illustrated post that will march you right through the process of creating an amortization table.

Joseph Rubin’s Excel tip site provides some extra instruction for those who want to really play with the numbers. If you want to make grace periods and random payments part of your evaluations, you’ll want to look into Rubin’s tips.

There you have it. You can use your computer for something productive today!

Not too long ago, I wrote a post about Wells Fargo auto finance.  I noticed a few complaints about their practices and decided to find out more about them.  I concluded that they had some pretty significant shortfalls and certainly were far from perfect, but that they were probably miscast as 100% unadulterated evil devil spawn.  Many of the complaints were of the “I don’t like the fact I borrowed too much money and they’re not nice about my inability to pay” variety.

So, I asssumed the same thing would probably be true of Chase Auto Finance.  “CAF” is a division of the big ol’ JP Morgan Chase Bank conglomerate and they’re in the business of loaning folks money when it’s time to pick out a new set of wheels.  After looking at the situation with Chase, my initial suspicions were basically confirmed.  They certainly aren’t perfect, but they don’t appear to be sadistic evildoers hellbent on crushing the spirits of borrowers.

If you look through the list of complaints about Chase at sites like ConsumerAffairs.com, you’ll find that most of them fall into one of two categories.

There are entirely legitimate gripes about things Chase has screwed up.  Clerical errors, annoying miscalculations and other problems litter the list.  These are black marks against a lender and those “little” mistakes can produce monumental migraines for the consumers who are just trying to do things the right way.  There are some pretty credible arguments out there about Chase’s lack of consistency and customer service abilities.

At the same time, we’ve all learned to expect that sort of thing from big giant, faceless companies.  It stinks, but it’s true.  The bigger a company gets, the more bureaucracy they have and the more likely they seem to be to screw up the details.  It’s a good reason to look for the personal touch.  It’s a good reason to have reservations about dealing with Chase, Wells Fargo or any other Big Bank.  It’s not a sign of hate, vindictiveness or pure sleaziness, however.

The second group of complaints are the kind that REALLY irritate me.  They are based primarily on the desire of consumers to do whatever the hell they want, regardless of the terms of their loan agreement.  You’ll see people whining about Chase’s repossession fees, the fact that they now owe more on cars than what they are worth (which, as we all should know is about as common as snow at Aspen) and the fact that Chase isn’t willing to “work with them” enough when they’re unable to pay their bills.  There are also those who aren’t very happy that Chase Auto Finance is pretty serious about getting paid and will take an aggressive collections posture when people don’t pay.

These complaints are annoying for a few reasons.  Initially, they allow real complaints to get lost in the shuffle.  It’s hard to discover the real reasons to be wary of some lenders when you’re sorting through page after page of “I made a bad deal and wish the lender would adjust the terms to meet my whims” stuff.  Additionally, it makes you think of all the time Chase and others need to spend with these people–time that could be devoted to doing other things correctly, thus decreasing the number of legitimate gripes.

I’m beginning to think that the bottom line when it comes to Chase Auto Finance or any other auto finance company boils down to the following…

The customer service is weaker than it should be.  Errors are more common than they should be.  You can’t expect them to help you out if you need a hand and the odds of experiencing some kind of annoying, head-spinning incident involving tons of phone calls, lost paperwork and confusion is directly proportional to the number of things you do that might be even slightly out of the ordinary.

If you pay every month at the same time in the same way without making any special requests or doing anything out of the ordinary, you’ll probably have a nice smooth go of things.  If you deviate at all from that course, you’ll probably want to invest in a bottle of Tylenol.

That’s the annoying truth about Chase and all of the other big lenders out there.  If you want personal service and a little  more human interaction from a smaller-scale company, take your business elsewhere.  Be forewarned, though, you might pay an extra point or so in interest for the privilege.

I like sticking up for the little guy.  I really do.

So, when it came to taking a look at Wells Fargo Auto Finance, I was prepared to join the chorus of dissatisfied customers who have nothing but bad things to say about the company.  Seriously, I was ready to lash out at those Wells Fargo bums with all my might.  After all, they must be a horrible company–so many people hate them.  Plus, recent news of predatory lending practices in Wells Fargo’s mortgage outfit gave me reason to believe they were probably bad in the auto field, too.

Well, when I started taking a closer look at the litany of complaints about the company, I realized that many of them weren’t the kind of thing I could get behind.  Note even close.

I did find at least two areas in which Wells Fargo has REALLY blundered.  I also found the kind of half-assed customer service we’ve all regrettably learned to expect from a big ol’ company these days.

Overall, though, it doesn’t seem as though Wells Fargo Auto Finance is owned and operated by Satan.  It’s certainly not the best outfit in history, but it isn’t monstrous, either.

Let’s start with the criticisms.

When you buy a new car with a loan, the lender requires that you carry appropriate insurance.  That makes sense.  What doesn’t make sense is a company that fails to appropriately log who has provided proof of adequate insurance and who has not.  That seems to be a Wells Fargo problem.

A complaint at ComplaintsBoard.com is a good representation of what’s been happening.  People provide the proof of insurance, Wells Fargo fails to note it correctly, Wells Fargo bills the individual for the price of insuring the vehicle.  Then, the person provides proof of insurance again.  That’s followed by Wells Fargo again billing the customer.  The process repeats itself until the beleaguered car buyer either gets lucky or screams at enough people.

I wouldn’t put too much stock in a complaint like that most of the time, but it’s a recurring theme with Wells Fargo Auto Finance.  It’s bad enough that at least one lawyer is trying to drum up enough annoyed, frustrated and overbilled people to start up a class action lawsuit.

The other aforementioned problem is the fact that Wells Fargo doesn’t offer the kind of customer service people would like.  I’m not talking about those who want the company to double over backwards for them, either.  I’m talking about folks who’d just like to see an error corrected or who need a little basic information.  If you scan the complaints about the lender, you’ll find people with sorts of issues (major and minor) having a hard time getting the right information from the right people.  That’s not unique to WF, of course, but the overall miserable state of customer service elsewhere doesn’t justify it.  And it’s particularly true when a company couples bad CS with very aggressive collection practices.

So, I’m not ready to say that Wells Fargo Auto Finance is a super-duper wonderful company.  Not by a long stretch.  However, I found that many of the criticisms levied against the firm were about as close to baseless as you can get.  For instance, you have people who are up in arms over the way WF is “not customer oriented” reached that conclusion after it took awhile for the lender to agree to allow the customer to defer a loan payment due to a layoff.  Not to sound like Ebeneezer Scrooge or anything, but I don’t see why letting people out of their obligations for the sake of being nice (and losing cash flow in the process) should be a component of good customer service.

People who fall behind on their payments after agreeing to loan terms suddenly expect the lender to do whatever it takes to make their lives easier, without displaying much interest in taking personal responsibility.

My conclusion:  Wells Fargo Auto Finance is a big company that has a hard time getting the details right the first time.  They have questionable customer service skills and are a little too quick to turn up the heat when it comes to collections, considering the likelihood that the apparent billing issue could be due to their own error.

However, many of the more pointed gripes about the lender are closer to being whines than legitimate reasons to do business elsewhere.  I don’t know if they deserve the A+ rating you can find at Better Business Bureau sites, but they’re not bad enough to hate.

Here’s a common question:

“When can I take money out of my 401k?”

It’s a question that’s been asked more than usual over the past year.  Many people are watching 401k balances dwindle due to the big stock market dip while others are dealing with new financial stresses.  When times are tight and you’re looking for money, that pile of cash in your 401k looks inviting.

But can you actually start yanking money out of your retirement plan?  In some cases, you might be able to do that.  In others, you could be stuck.  It’s going to depend on your unique circumstances and the 401k policies your employer set up.

You can cash out your 401k when you retire.  At that point, you pay the standard income tax rate on the dispersals.  Obviously, though, most of the folks asking “When can I take money out of my 4o1k?” already know that they can have it once they retire.  They’re more interested in whether or not they can get fast access to that money.

Generally speaking, there are two circumstances that will allow you to actually pull money out of your 401k plan.

First, if you terminate employment, die or become disabled.  If you’re canned or finally scream “Take this job and shove it!”, you can get access to the dough.  Termination of employment, regardless of whose idea it was, qualifies you to play with your nest egg early.  If you die, the funds are available to your heirs.  That probably isn’t part of your plan, though.  If you become disabled, you can also get to the money.  We don’t want that to happen, either, though.

Second, you can often take a chunk of your 401k money if you are experiencing a serious hardship.  Many plans have caveats in them that will allow contributors to withdraw a portion of their 401k money under certain specific circumstances.  The desire for a better television set does not qualify you for a harship exception.  Nor does your bad decision to go on a spending spree with your credit cards.  These early-access opportunities are reserved for those who end up facing serious medical bill problems or who may be waiting for the sheriff to come by with that foreclosure notice.  If you can’t document a serious emergency, don’t expect to get your money out early.  Even if you do, you probably aren’t going to be able to get more than a small percentage of the total funds in the account.

So, if you’re not quitting (or getting laid off) and you’re not staring down the barrel of a financial crisis unrelated to your personal debt obligations, how can you get to your cash?

To be honest, you can’t.  Yes, it’s your money.  However, in exchange for receiving any employer matching funds and the tax advantages associated with having a 401K, you give up some of your control over the money.  It’s yours, but you can’t have it just because you’d like to hit the casinos or pay off the folks at Discover.

You may be able to secure a loan against your 401k, though.  You’ll have to pay it back with interest, though.  And if you happen to lose your job before repaying the loan, the balance will suddenly become due in full.  It’s not a dream scenario to take out a loan this way, but it is sort of a roundabout way of getting your money in your hands.   Oh, and you’ll only be eligible for a loan representing a fraction of your total balance.

So, that’s how you can do it.  The bigger question is if you should do it at all. Generally speaking, the answer to that is a resounding “no”.  They’re going to automatically hold back a percentage to cover the income taxes on your cash out and you’ll also get hit with additional penalties for pawing that cash before hitting retirement age.  Usually, that combination of disincentives is reason enough to leave your money in place until you retire.

(NOTE:  We keep using the word “usually” for a reason–many of the answers to this post’s questions can only be determined with certainty after carefully reviewing the rules of your specific plan.)

“When can I take money out of my 401k?”  When you quit or get fired.  When you’re facing a serious economic hardship or when you retire.  That’s about it, unless you count taking out a loan.

In the end, however, you’re better off not scrambling your nest egg.  Leave your 401k money in place if you can.  As Dave Ramsey apparently said:

QUESTION: Chad and his wife have $35,000 in debt between credit cards, student loans and car loans. They bring home $150,000 a year. They also have $25,000 in their 401-K savings. He wants to (pay off his debt). Should they use that money to eliminate their debt?

I would never cash out retirement savings to pay off debt unless it is to avoid foreclosure.

Most of us aren’t particularly keen on recessions.  We tend to thing of them as negative events, the kinds of things with which we’d rather not deal.  Sure, the repo men are loving the downturn, but everyone else seems to be suffering–or at the risk of suffering.  

The idea of examining the benefits of a recession seems a lot like marveling at the great clown performances John Waye Gacy turned in at various children’s parties, in a way.  No matter how many kids he made giggle, it couldn’t possibly make up for the corpses in the crawlspace.  So it is with a recession.  On-balance, it’s such bad news for so many people that it feels a little unsavory to talk about the upside.  There is, however, a real potential set of advantages to be gleaned from this current economic mess and we should recognize them before we become completely convinced that the we’re approaching some kind of Apocolypse.  

First, if you’re relatively insulated from the economic downturn and have sufficient security to make purchases and/or investments with some element of risk, there are real bargains to be had out there.  The stock market features a slew of undervalued issues (no, I’m not going to provide specific stock tips here) and houses are cheap at the moment.  If you’ve got a little room in your finances or have a great credit score, you might want to go shopping.

Second, the Fed’s efforts at staving off a recession have largely consisted of pushing down interest rates.  So, if you fall into the aforementioned group, you’re going to see lower price tags on major purchases and lower price tags on the money you’ll borrow to make them.  Between these two factors, you can get a whole lotta house on the cheap these days.  Just in case, though, buy something you plan on living in, okay?

Third, there’s a big picture reason to at least partially embrace the recession.  It’s going to clean house.  It will force businesses to become more efficient and will reward creativity and quality while punishing the fat and lazy.  In the U.S., everyone claims to love a free market until they see this part of the cycle.  It’s necessary, though.  It prunes out those who made poor decisions and creates openings for smarter, leaner businesses.

Fourth, sticking with the big picture theme, a recession creates an impetus to evaluate the way we’ve been doing things as a nation.  Sometimes, you can actually learn a lesson or two from the consequences of your bad behavior and this could be such a situation.  Maybe it’s not bad for us to come to grips with the fact that credit overuse/overextension and a pollyannish belief in perpetual growth weren’t the best ways to run our financial houses.  

Fifth, if you take it down to the personal level, this economic downturn can be viewed as an opportunity for a little personal development.  Even if that isn’t really part of the benefits of a recession, it is an opportunity to do something worthwhile.  Look at these lists.  Some of the alleged “benefits” aren’t too impressive, but others do offer some potetial to come out of this mess a better and smarter person than the one who entered it.

I’m sure there will be those who disagree, but I happen to think that periodic contractions of the economy are natural parts of a cycle of growth and correction.  I think that they’re inevitable when you are talking about an economy that retains at least some traits of a true market system.  When things go up, we overshoot and come back to the “right” place.  When things go down, we overshoot in the opposite direction before bouncing back.  

This recession isn’t a good thing by any stretch, but there is some good in it.  You just have to look carefully to find it.

I can think of some very bad decisions a person might make.  Right up there on the list, somewhere between drinking a 32 oz. bottle of bleach and telling your mother-in-law what you really think of her is taking out a payday loan.

Those mega-interest short-term loans are a Faustian bargain for people who have their backs against the wall.  In order to secure a few portraits of Ben Franklin to meet some kind of emergency expense, borrowers often end up creating even tougher circumstances when the balance comes due.  The only way out?  Extending the loan (which costs a bundle) or taking out another one.  

Look, I understand why people take out those loans in some circumstances.  When the only thing standing between you and a jail sentence, the repossession of your only means of transportation or having empty shelves and hungry kids is shaking hands with a shark, taking out a payday loan makes a twisted kind of sense.  You know it’s a horrible deal, but it’s a little less horrible than receiving a massive immediate butt-kicking.

My remaining libertarian instincts leave me a little bit cold on the issue of regulating payday lenders out of business.  I believe that people should have as much freedom as possible–even when that opens the door to stupidity.  There’s no law against telling your mother-in-law off, and I can tell you for a fact that isn’t the best course of action.  Who thinks it’s a good idea to serve cocktails at a Thanksgiving dinner, anyway?

In any case, recent events in the state of West Virginia provide a great object lesson in the motivations others have in trying rein in the practice of payday lending.  Whether you think it’s sticking up for the little guy and protecting his interests or an example of the worst kind of state paternalism, the arguments being leveled by the West Virginia Attorney General’s office perfectly encapsulate the “let’s regulate it  to death” perspective.

Here’s the scoop.  Payday loans are illegal in West Virginia.  You won’t find those storefront lenders anywhere in West Virginia.  That should give you a good idea of how the state government feels about the practice.  It also makes me wonder what kind of businesses are operating in those little strip mall spaces between the discount cigarette joints and the “car insurance for people with a history of DUI convictions” places.  What goes into those spots when payday lenders are illegal?

Desperate souls in the state pulled an end-around on the law.  Instead of walking up to a storefront lender, they’ve gone straight to the Internet, securing online payday loans.  Those Internet operations, which aren’t located within WV, extended credit to the least creditworthy among us.  The state is a little irate over that.

They’re so irate, in fact, that the AG is going after 12 online lenders.  They maintain that it’s illegal to make the loans to West Virginians or to market them within the state.  Following non-compliance on the part of the lenders to investigative subpoenas, the AG is asking for a court order to force the companies to pony up the information about their potentially illegal activities.

This series of events has led to some interesting comments from West Virginia officials.  

“It’s a very very shadowy industry, and it operates very much off the grid. The only answer to payday lending is to ban it,” said Assistant AG Norman Googel.  In a nice overview of the situation in the The Times, a WV paper, you can get a clear picture of how the government feels about these loans.

They see people making bad decisions with serious repercussions.  They don’t like the fact that people suffer as a result of their own poor decisions and they want to protect them accordingly.  They’re willing to tear up the notes on these loans, allowing the borrowers to walk away from their agreements without owing a dime.  They’re actually encouraging people who’ve agreed to pay back money to lenders to report to the AG’s office so that they can escape their poor decisions.

I’m no fan of payday loans and I don’t question the good intentions of those who’d like to ban them.  I do question the wisdom of that.  Can we really protect ourselves at every turn?  And even if we can, wouldn’t it make a lot more sense of the government of the fine state of West Virginia to focus on ways to improve the economy so that people might be able to afford to make ends meet without feeling like usury is a way out?

I don’t think this is necessarily a situation that requires babysitting.  It calls more for a look at why the economy makes these bad deals so attractive.  It justifies consideration of why people are willing to make these lousy bargains in the first place.  

Then again, it might be time for the legislature of West Virgina to consider a bill banning critical comments to mothers-in-law.  Let’s put a rider on there to punish the Clorox every time someone downs a cool glass of bleach, too.

Washington Mutual Mortgage is the mortgage lending branch of the nation’s largest savings and loan association, Washington Mutual, headquartered in Seattle, Washington.

The third largest mortgage lender in the United States, Washington Mutual offers fixed and variable rate conventional mortgages, interest-only mortgages, equity lines, and a number of ARM creative financing options.

In December of 2007, Washington Mutual Mortgage closed 160 of its 336 home loan offices across the country, and eliminated 2600 positions, constituting 22% of its entire staff. Hit hard by the subprime lending crisis, in March of 2008 Washington Mutual also reduced the 2007 compensation package of its CEO Kerry Killinger from $14.2 million to $5.25 million after its stock price dropped 70% due to huge losses in the mortgage division.

WaMu (as it is now called in its ad campaigns) has set aside $2 billion for losses in 2008 which it expects to continue into at least the third quarter.

In December of 2007 Washington Mutual Mortgage was also investigated by the Securities and Exchange Commission due to allegations that it had based some of its mortgage loans on intentionally inflated home appraisals. Though formally cleared of these allegations, the chief legal officer for Washington Mutual Mortgage, Fay L. Chapman, retired immediately after the investigation ended. Ms Chapman, then 61, insisted that no connection existed between the company’s legal troubles and her sudden departure.

Washington Mutual does offer very competitive rates on conventional fixed rate mortgages, but its terms on ARMs vary widely and should be carefully read and understood before signing. For example, a one-month ARM option is can be hit with increases of up to 7.5% annually with no lifetime cap, and with negative amortization over the life of the loan a real possibility.

Negative amortization means that the amount owed on the home increases even though payments are made regularly and on time. Buyers who choose this option betting on mortgage rates staying low and their property rapidly gaining equity can end up owing more than their house is worth very quickly if they are wrong.

Five, seven, and ten year ARMs are also offered that carry a more reasonable 5% cap for the life of the loan, but even this can cause problems if buyers don’t realistically consider all possible outcomes. Many people only consider the best case scenario, a bad idea especially considering the real estate mess of the past year.

An even more slippery multi-pay option allows WaMu buyers to choose one of four different payment types for the first ten years of their ARM. The first payment option allows a minimum payment that does not even cover accrued interest and can result in negative amortization.

The second option is an interest-only option.

The third is for a normal principal and interest payment.

The fourth is for a 15-year principal and interest payment.

In the worst-case scenario, buyers could choose option one for ten years, owe more on their property each year than they did the year before, and then after ten years get hit with an unaffordable payment on an upside down mortgage. That might be worth doing if refinancing was an option and property values kept pace with the negative amortization, but that is a lot of ifs to be considering at the beginning of a property purchase.

People who need (or think they need) this kind of flexible payment option unfortunately tend to be the very same people who should never, ever be offered this kind of flexible payment option. It’s hard to say whether Washington Mutual is still making this kind of creative loan given the current chilly lending climate, but they do still offer it on their website: http://www.wamu.com/personal/loans/home_loan/multipay/default.asp

Washington Mutual Mortgage is likely to be around for awhile, having merged with or acquired Homeside Lending, Fleet Mortgage Corporation, PNC Mortgage, and Alta Residential Mortgage, all in the past eight years.

Given the deep cuts, huge losses, and radical changes to the mortgage division in 2008, it is almost certain they will eventually emerge a more conservative, more cautious lender.

During tough economic times, many turn to loans as a means to make ends meet or to finance an unexpected expense.  If you have bill collectors at your door, on your phone or sending you threatening notices, an infusion of cash may be necessary – and this is where the many options for urgent loans may come in handy.

Overall Concepts

If you are exploring loans, there are a few key concepts to understand, specifically “Credit Score”, “Collateral” and “Loan Terms.”  In essence, when making urgent loans, most lenders require two things:

• A demonstration of your ability to pay the loan back based on past performance (credit score) and
• The promise that you will give them something of equal or more value than the loan amount if you do not (collateral).
• The terms of the loan (pay back timeframe, interest rate, etc.) depend on how well you’re able to demonstrate your ability to pay back

In other words, your credit score and sources of collateral will determine whether your loans will have a payback period of 5 years at 7% interest or 2 months at 25% interest.

Sources

There are a variety of sources for urgent loans, many of which can get cash in your hands in as little as 24 hours.  Start by looking in to some of the following:

• Family and friends:  Family and friends are almost always one of the first options you consider.  Their terms are likely to more favorable than a bank or other institution and they may be less interested in the type of collateral you can offer.
• Cash Advances on Credit Cards:  If you already have credit cards and have any remaining space left between the amount you’ve charged and the limit, consider taking a cash advance.  Although the interest rate will be high on these kinds of urgent loans, it is often easier to get cash immediately through a credit resource that you already have, as opposed to applying for something new.  Check with your credit card issuer to see if they have a cash advance process.  You may even be able to get cash from an ATM or a local bank.
• Home Equity Loans:  If you own your home and there is a difference between the amount you paid and the market value, you may be able to get fast turnaround on a home equity loan.  Check with your lender to see if something can be arranged.
• Pay Day Loans:  Many companies, such as Discount Advances, My Cash Now and Personal Cash Advance offer urgent loans utilizing your paycheck as collateral.  If you have an unexpected expense that needs to be addressed immediately, but your paycheck won’t be available for two weeks, these companies will loan you the money in exchange for a financing fee.  In general, you must agree to hand over your paycheck to them the moment you receive it.
• Pawn Shops:  Sometimes, urgent loans are as close as your local pawn shop.  You can turn old jewelry, electronics or other valuable in to cash quickly and easily.  Basically, the pawn shop offers you a loan utilizing the valuable you’ve left with them as collateral.  You can return to buy the items back at a slightly increased fee (which provides the profit to the pawn shop owner) or you can leave them there to be sold to others.
• Online Person-to-Person Lending:  For urgent loans of up to $25,000, you might want to consider an option like Prosper, where people with available cash pool together resources to make loans to others.  The interest rate you will ultimately receive on your funds is based on your credit rating and your demonstrated ability to pay back the loan.  So, if your credit rate isn’t great, lenders will charge you a higher interest rate.

When you’re in a difficult financial situation just knowing that there are options for loans can be comforting.  But remember, if you are using urgent loans indiscriminately as the only means to make ends meet, it might be time to take a closer look at your overall finances.

Unsecured debt consolidation loans are basically a way of putting all your debts into one loan with one monthly payment with no collateral required. Collateral refers to a physical asset like an automobile or a piece of real estate that the bank can seize if you default on the loan. Loans made against collateral are call “secured loans,” because your ability to repay is “secured” by the agreement that the lender can seize your collateral if you default.

A credit card is basically an unsecured loan. You do use the card to purchase real physical assets but they tend to be small and the bank does not usually try to take them back if you default. This means that unsecured loans are riskier for the bank or lending institution. They are usually much harder to get, and if you can get one, the terms are usually not as good as they would be if you had some collateral for the loan.

All of these considerations lead us to an obvious question: Why would a reputable lender want to make an unsecured loan to consolidate debt?

Most reputable lenders do not make very many of these loans, but a few will do it in some cases. Bank of America offers an unsecured debt consolidation loan for anywhere from $500 to $50,000. The interest rate can be as low as 8.99% or as high as 24.9% depending on your credit and the rate can be changed at their discretion at any time during the life of the loan. You can choose a term of 60, 72, 84 or 96 months. You can read about this loan at:

http://www.bankofamerica.com/vehicle_and_personal_loans/index.cfm?template=debt_consolidation

The shorter the repayment term the higher your monthly payment, but choosing the shortest term you can is still the best way to go, both so you can be quit of the debt quickly, and because you will save money in interest paid to BOA.

Even though Bank of America is a reputable lender, the unsecured debt consolidation option has some real drawbacks, even with them. First of all, the “unsecured debt consolidation loan” is actually a revolving line of credit, in other words, a credit card without the plastic. You can make draws against the paid down portion of the loan, and if you do, it will extend the loan term and sometimes change the interest rate. If you are late on a payment the rate jumps to 27.99%, which is not at all good.

In the worst case scenario, if you are approved for Bank of America’s unsecured debt consolidation loan, and you transfer your credit card debt into the balance to the tune of the maximum $50,000 for 96 months at $762 each month. You don’t close out your credit cards but after all, they are at a zero balance now that you have the debt consolidation loan.

Several months into the loan you or a family member starts charging up the credit card again, plus you take a draw on what you’ve paid so far and the interest rate jumps several percentage points. Before you get anywhere near the end of the 96 month term you have other credit card debt again and now your debt consolidation loan is out of control too.

If you choose any of hundreds of unscrupulous lenders who prey on people in deep debt by misrepresenting what they actually do, you can end up with an even worse credit rating than you had when you started.

Some companies negotiate with your creditors to lower the amount you have to repay. That is not illegal, but it isn’t the same as paying off your debt and will leave a mark on your credit similar to bankruptcy, even though the lenders will often tell you it won’t.

A better idea is to start with credit counseling and some financial education on debt and how to reduce or pay off debt. A good credit counselor will make you cut up all your credit cards at the very beginning if you haven’t done so already. If anyone suggests anything fancier than that, don’t sign anything until you shop around. Some “free” credit counseling services actually charge fees and will steer you to their own predatory products rather than give you good advice.

A good rule of thumb is, “if it sounds too good to be true, it probably is.” It takes awhile to get in over your head in debt. Anyone who promises to fix it for you quickly and painlessly is probably lying.

Mortgage loans come in all shapes and sizes, with many different terms and conditions. Buyers who understand the types of mortgage loans available and which ones are best for their specific needs have a definite edge over buyers who go into home shopping without doing this research first.

A good resource that describes the basic types of mortgage loans and their terms and conditions can be found at http://mortgage-x.com/library/loans.htm.

Mortgage loans can be back by the Federal Housing Administration or the Veterans Administration. These loans are called FHA and VA loans, and are typically easier to qualify for than conventional mortgages and require less of a down payment.

The Rural Housing Service of the US Department of Agriculture is another government agency that backs low-cost loans with no down payments for buyers who want to purchase property in certain rural areas and meet certain conditions.

In addition to federally backed mortgages like FHA, VA, and RHS loans, many states and local communities offer low-cost mortgages with minimal or no down payments for buyers who meet certain income limits or are willing to live in depressed areas and rehabilitate their properties. To find out if such loans are available in your specific area, contact any licensed realtor.

Conventional mortgage loans can be conforming or non-conforming. Conforming loans follow the terms and conditions set forth by Fannie Mae and Freddie Mac guidelines, two huge corporations that purchase mortgage loans and sell them as securities to investors.

The 2008 conforming loan limit on a single-family dwelling is $417,000. In other words, $417,000 is the maximum amount you can borrow to purchase a single family home if your loan is backed by Fannie Mae or Freddie Mac, which most conventional loans are.

Conventional mortgage loans over $417,000 (for a single-family dwelling) are called non-conforming Jumbo loans. Jumbo loans tend to have a little bit higher interest rate, and may be somewhat more difficult to obtain, or, in times of tight credit, very difficult to obtain.

Within conventional mortgage financing you can find fixed or adjustable rates with various term lengths. The most common fixed rate terns are 10, 15, 20, 25, 30, and 40 years, with 15 and 30 year options being by far the most popular. The shorter the term on a fixed rate mortgage, the better (in general) the interest rate will be. Many people take out 30 year fixed rate mortgages and then refinance to 15 years after they have lived in the home for a few years.

Adjustable rate mortgages are conventional mortgages with interest rates that fluctuate over the life of the loan. Currently, adjustable rate mortgages are popularly sold as 30 year mortgages with a low fixed rate for the first 2 to 5 years, and then a variable rate that resets each year. Sometimes the initial five year period is interest-only, making the early payments artificially low, and later payments then reset each year for the rest of the mortgage.

When considering an adjustable rate mortgage it is very important to understand the terms and conditions and read everything very carefully, asking plenty of questions and possibly even hiring an attorney to review the loan documents before signing. Many people get into trouble with adjustable rate mortgages because they are confident they can refinance once the fixed rate portion is over, and then they find that market conditions have changed and they are stuck with a rate they can’t afford.

When considering an adjustable rate mortgage look for a cap on the interest from year to year and also a cap on increases over the life of the loan. If the cap is very high, or if there is no cap, you might want to consider other financing. Also, keep in mind that mortgages always come with closing costs that can be quite expensive, so factor this in to any decisions you make in which refinancing later is an important part of your plans.

Finally, many other more creative options for mortgage financing are available, but probably not as easily available as they were before the recent sub-prime mortgage meltdown. Before considering any creative options such as interest-only mortgages or reverse mortgages, it is best to consult a mortgage attorney or other trustworthy expert to insure the loan isn’t predatory or just a really bad idea.