Archive for June 30, 2014

Start-up uses social networks to provide a free alternative to payday loans

The microlending site will provide short-term access to as much as $1,000 with no interest or fees for five days, up to four times a year.

The inspiration for Rainy Day was the single mom working two jobs whose car breaks down, and there isnt enough money left in the checking account this month to get it out of the shop, said Hayden Hamilton, founder of Bright Light Ventures, the innovation incubator behind Rainy Day. The goal is to create a rainy day fund for those who cant afford to create one for themselves.

In order to provide loans that are free to begin with, and then at rates a fraction of the 391% APR interest rate of an average payday loan, Rainy Day uses many of the practices pioneered by the microfinance industry making unsecured loans to low-income women and families in countries like Bangladesh, but Rainy Day uses social networks rather than village networks to do so.

Rainy Day requires a Facebook account to apply for a loan and relies heavily on the recommendations of current Rainy Day members when making a decision on new applicants. Members are also tied to the applicants they recommend, giving them additional benefits like lower fees when the applicant repays their loan on time, but slowing or even reversing those benefits if the applicant does not.

Rainy Days fee structure is very different than other short-term lenders. Rather than charging a relatively large fixed fee upfront, Rainy Day charges a daily fee. Fees begin at $2 per day and decrease with every subsequent loan as a borrower demonstrates a repayment history. The structure was designed to encourage early repayment and provides borrowers with the opportunity to take loans at a small fraction of the typical industry rates, or even for free.

Default losses are by far the biggest expense for online lenders, often running in excess of 100% APR, or more than 100 times that of the microfinance industry. By reducing those losses, Rainy Day can provide much lower rateswer rates for borrowers.

Rainy Day launches its public beta site today in three states – California, Louisiana, and Tennessee – and hopes to make the services available in many other states later this year.

Clintons used loopholes to avoid tax burden

However, these nice words seem to be pure rhetoric as, according to Bloomberg News, the Clintons have been using a legal but dodgy tax loophole that often helps multimillionaires to avoid paying their estate tax, a levy paid by a person who inherits money or property.

The scheme helped the couple to amass quite a fortune, hiding their wealth from the federal governments tax collectors at the IRS. The scheme was a financial planning strategy to shift ownership of their houses to a private trust, and then to their daughter Chelsea, the Daily Mail writes. According to federal financial disclosures and local property records, the Clintons created residence trusts in 2010 and shifted ownership of their Westchester house in New York into them in 2011.

The moves ensure that any growth in the houses value will occur outside their estate and that they can claim a discounted value for the home, which could save the Clintons hundreds of thousands in estate tax avoidance, Bloomberg explains. At the end of 2012, the Clintons were worth from $5.2 million to $25.5 million, according to financial disclosures that Hillary Clinton filed in 2013 as she was leaving her position as secretary of state.

The revelation could be quite a blow to Hillarys 2016 presidential bid as Bill and Hillary Clinton have long supported an estate tax to prevent the US from being dominated by inherited wealth. Federal estate taxes currently apply only to amounts over $5.34 million. Mrs. Clinton proposed lowering that cap to $3.5 million. She also argued that the top tax rate, paid only by the super-wealthy, should increase from 40 to 45 percent.

The news also comes amid Clintons promo tour of her new book Hard Choices. Voters may have a problem with a potential presidential candidate who spends a lot of time talking about the problems of the middle class while hobnobbing with the rich and privileged experts say.

The Republican Party is already running a 30-second ad Tuesday on CNN during a broadcast town hall with Hillary Clinton. The ad puts her wealth into focus.

Planwise shifts focus to connect mortgage lenders to house hunters

Planwise, a real estate startup that helps consumers gauge how a home purchase would fit into their financial lives, is pivoting to focus on integrating mortgage lenders into a consumers home search experience.

Planwise originally launched as a financial planning service to help individuals visualize, via real-life scenarios, how major life events would affect their financial future.

Screen shot of Planwises home page.

Now, the startup will open up its home affordability tool to mortgage lenders who will power mortgage estimates within Planwise for consumers, Planwise CEO Vincent Turner told Inman News.

Zillow and Trulia do a poor job of monetizing the mortgage potential for the traffic they already get, Turner said.

Thats where he sees an opportunity for Planwise to partner with lenders and real estate firms.

OK Loans UK Announces Newly Introduced Unsecured Loans

This programme of unsecured loans is a unique way of borrowing money for all urgent situations.

Online PR News 08-June-2014 At this period of grave financial troubles a loan provider in the UK has set up a facility that assists people of the United Kingdom to locate Unsecured Loans. This newly developed programme by an established loan procuring company, in the UK introduces this programme to the United Kingdom to fill a void that has existed in the system so far. Keeping the welfare of their clients at heart, OK Loans also proposes a uniquely significant no upfront fee system for the initial processing of the loans in order to make this truly a service oriented venture. Most loan companies charge an upfront fee to enable their clients to access their services. But, in removing this upfront fee OK Loans company plans to make the whole process effortless and pain free.

This programme of unsecured loans is a unique way of borrowing money for all urgent situations. Clients who require funds for any major event in their lives can now take advantage of this plan. This is especially useful for those who want to start their own business and dont have any resources to turn to. These Unsecured Loans can be used for long term or short term business requirements and all this can be accomplished without hypothecating their houses or providing collaterals of any kind. This is a special gift to all those who dont own houses or have other possessions to use as collaterals.

Another distinct advantage of this Unsecured Loans programme by OK Loans is that there is no initial credit check. This allows almost anyone who is a resident of England, Scotland, Wales and Northern Ireland in the United Kingdom to take advantage of this opportunity. All they have to do is provide proof of residence.

In keeping with the pace of the times, OK Loans has a strong online internet and web presence and they are amazingly easy to access. Their online application process is extremely simple and easy to complete. They also offer round the clock assistance with uncomplicated access to experts who will guide potential clients and help them to understand their simple terms and conditions.

Clients in the UK are already familiar with the benefits of doing business with OK Loans. The trust that they have earned makes them the foremost loan company to go to for any unsecured major loan. This additional offer only makes this company the first choice for loans.

For further details and easy access simply follow the link given:

Contact Information:
Phone: +44 20 8144 5752
Email :

Tigerair partners with ICICI Bank for ‘pay to go, complimentary return’ offer

During the offer period, customers of ICICI Bank can avail the opportunity to pay only for one-way fare to Singapore, wherein the return ticket will be complimentary. The customer will have to pay only for airport taxes and other charges on the return fare.

Passengers can avail this offer through the official website – — for travel to Singapore for flights departing from any of the six cities — Bangalore, Chennai, Hyderabad, Kochi, Thiruvananthapuram and Tiruchirappalli.

This offer will bring an opportunity for customers of ICICI Bank to experience our superior product and service, said Robert Yang, commercial director, Tigerair.

We at Tigerair, aim to enable travelling without compromising on safety and customer service with continuous promotions and partnerships with the likes of ICICI Bank, we are committed to be the low-cost airline of choice in Asia, he said.

We are always keen to offer unique experiences to our customers and are certain that this promotion of the usage of the cards will be very popular, said Kusal Roy, general manager and head, Payments And Unsecured Loans, ICICI Bank.

Tigerair operates a total of 44 weekly flights to Singapore from six Indian destinations. The airline also connects to Bali, Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Manila, Perth and Taipei via Singapore.

The airline is also the principal sponsor for Creative Masters, ICICI Banks online drawing competition where participants depict a social cause such as education for less privileged children, save a girl child or support to the elderly. Children over the age of four years are eligible to participate in the contest.

Why Solar-as-a-Service Is Not Going Away Anytime Soon

For some time now, there have been folks making the argument that personal unsecured loans will radically displace the solar-as-a-service industry. I have seen charts and graphs from respectable sources that are incorrect at best and perhaps even misleading in the data they marshal to make this point. So lets take a look at what exactly makes up solar service in terms of a single-customer analysis.

A solar service agreement (SSA), whether it is a lease, power purchase agreement (PPA), or a levelized PPA, is an agreement with an independent power company to provide power that typically is cheaper than what the local centralized utility can provide. In its simplest form, the SSA can be broken down using the following equation:

SSA = Equipment Loan + ITC/Depreciation + Oamp;M Service Agreement

Most people commit three major errors when making the case that unsecured loans make more financial sense than a solar service agreement. The first error is to assume that the upfront investment in loan fees and possible down payments are somehow free from interest or cost. This is incorrect, as no one, not even the federal government, can get or use money without paying some interest. The second error is to assume that many people can take the entire ITC in year one. With the mortgage interest tax deduction that everyone receives, it may surprise many people that a year-one assumption is often incorrect. Lastly, and the biggest error by far, is to assume that there will be no monitoring costs and no operation and maintenance costs, that is, assuming nothing will go wrong over the twenty- to 30-year life of the system.

After factoring in all loan fees into the effective cost of capital for personal, unsecured loans, it is roughly equal to the cost of capital charged by solar service companies. In some cases, the cost of capital for an unsecured loan is actually more expensive than the cost of capital imbedded into a solar service agreement. The one potential benefit for unsecured loans is that the frictional cost of monetizing the ITC can be lower than the cost to monetize the ITC in solar service agreements. Frictional cost is measured not only in terms of the cost of capital, but also includes the impact the monetization of the ITC has upon customer and installer operations. Therefore, the unsecured loan does have the potential to be superior because there is less frictional cost to monetize the ITC than there is with a solar service agreement. However, once the ITC drops from 30 percent to 10 percent and solar service firms continue to scale, that potential advantage will be wiped out.

The presence of an operation and maintenance service agreement highlights the essential difference between a solar service agreement and an unsecured loan. The solar system operation and maintenance expenses with an unsecured loan often represent a big gap in the homeowner return or savings calculation. This protection for the consumer must come from a well-capitalized company in order to represent true value. In fact, this issue is currently being corrected in the marketplace.

To omit the need for and cost of maintenance and operational support from any analysis, comparing a solar service agreement and an unsecured loan is risky and deceptive. As mentioned, the marketplace now demands that all securitizations of unsecured loans will require such agreements to be in place, and again, to be administered and funded by well-capitalized companies. Most solar service installations protect the customer from unscrupulous contractors and the bad installations that do occasionally occur. The same is not true when a homeowner purchases the solar system as a product, whether with borrowed money or cash. Furthermore, when it comes to selling a home, getting the buyer to pay off a solar loan is going to be a tall order, but transferring a solar service agreement, which allows the buyer to benefit from low-cost power, makes sense and is now done every day.

In its early stages, the solar industry was populated by rebels and anti-business-establishment people, and that, in my mind, is a good thing. However, sometimes this rebelliousness can be misdirected and counterproductive to our industrys growth. The aversion some businesses have toward the larger companies that sell solar service sometimes cause them to shade the data and facts against these firms (full disclosure: Sunnova is one of these large solar-as-a-service firms). This is unfortunate because it is these large solar-as-a-service firms that will enable the industry to survive the imminent drop in the ITC and the inevitable rise in expenditures for system maintenance that will be needed to keep millions of customers happy over the long term.

The bottom line is that when you simply break down the anatomy of a solar service agreement, it is difficult to produce the facts and make the case that owning through an unsecured loan makes the most financial sense.


John Berger co-founded Sunnova Energy and serves as its CEO. Prior to Sunnova, Mr. Berger co-founded and served as CEO of SunCap Financial and Standard Renewable Energy. Berger was prompted to write this piece in response to some of the points made in last weeks 4 Reasons Why Independent Solar installers Will Rise Again by Soligent CEO Jonathan Doochin.

Tags: solar as a service, soligent, sunnova, unsecured loans

Military Suicide Prevention Bill Focusing on Financial Planning Approved by …

In an unprecedented effort to stem the alarming rate of military suicide through better financial planning remedies, lawmakers approved a proposal that could more readily help troops overwhelmed by money troubles.

In a unanimous vote, the US House on Wednesday directed the military to study how to ensure soldiers and veterans at risk of suicide over severe money woes get more effective financial planning. The legislation was based largely on an investigation by Financial Planning last month that found the majority of military suicides involved troops who had never even deployed.

“In truth, suicide is often the desperate act of a soldier or veteran in a desperate situation – and one important component of that desperation is financial stress,” Rep. Rush Holt (D-NJ), author of the proposal, said on the House floor. “We err if we think suicide is only a mental health problem.”

During the month of March, Holt said, the US had no combat deaths, while 700 soldiers and veterans died by their own hands.

In arguing for passage of his bill, Holt repeated the central anecdote from Financial Planning’s investigation: “A few years ago, Army Sgt. Angelo Stevens was living with $100,000 in debt,” Holt said. “He had just been told that, because of his deteriorating finances, he was at risk of losing his security clearance. If he lost his clearance, he would lose his job – which would make his debt even more unmanageable.

“Sgt. Stevens met with a military financial planner” – briefly, since 15-minute meetings are typically all that’s allowed. Holt continued: “He left feeling hopeless and humiliated. He told a reporter, ‘I walked out thinking, ‘If I’m dead, my family can get $500,000 in life insurance, but I have to kill myself.’ ”

A few moments after mentioning those wrenching details, a ranking House member interrupted Holt to express his support for the measure and the vote was called.

The House approved an initial $1 million allocation to study the role finances play as a leading precipitating factor to the military suicide epidemic. Supporters believe it will be a first step before broader changes can be made. If the Senate approves and President Obama signs the bill into law, the study could begin Oct. 1, Holt said.

“We need to understand how effectively the Defense Department is providing adequate, unbiased, comprehensive financial planning and financial counseling – and we need to understand the obstacles that prevent military personnel from seeking these services,” Holt argued in his full statement in the Congressional Record. The Defense Department hires hundreds of financial advisors to assist troops, but military policy does not allow the advisors to provide any planning guidance, including on debt management, a vital issue for service members.

In Holt’s statement, he added: “We need to build connections between the mental health professionals and the financial planning professionals who serve our soldiers. Mental health problems and financial problems both contribute to suicide, and we should explore ways to treat these problems together, rather than separately.”

That idea was one of eight strategies that planners interviewed in the Financial Planning investigation had recommended.

In an interview following the vote, Holt was optimistic about passage in the Senate. He notes that the connection between troops who take their own lives and anguish over severe money troubles “has not had any piece of the attention that has been paid to suicide in the military.” Holt has been a leader of a bipartisan coalition that’s succeeded in allocating $120 million since 2011 to efforts intended to reduce the high rate of military suicide.

Two former top military leaders expressed their support for Holt’s legislation.

“We are obligated to do this – it makes sense,” says former Army Brig. Gen. Stephen Xenakis, who’s also a psychiatrist who’s counseled suicidal service members.

Former Navy Rear Adm. James Barnett said the proposal bridges the divide between addressing deep emotional problems and severe financial concerns. “Over here is mental health and over here it’s financial counseling and [the attitude is], ‘Well, they don’t have anything to do with each other,’ ” Barnett says. “What I think may be lacking is this type of research that shows that there are more avenues of counseling programs and that you have to go beyond that to pick up the factors that are acting on military members and their families. We have to significantly up our game and widen the search for root causes and solutions,” Barnett adds.

At the end of his argument for passage of his proposal, Holt noted that a financial planner – Arlington, Va.-based Jan Chapman, who was featured in Financial Planning’s story – reached beyond her official role to help Stevens, the soldier who considered suicide for financial reasons, because she overheard his desperation during a fruitless conversation with another planner. Holt said getting comprehensive financial planning shouldn’t require random acts of fate, but should become common practice.

“We can do better. We can design our military to be more responsive, compassionate, and helpful to soldiers like Sgt. Stevens,” Holt insisted. “We can pull more soldiers back from the abyss.”

Read more:


  • Could Financial Planners Stem the Rate of Military Suicide?:
  • 8 Ways to Help Service Members’ Finances:
  • Push in Congress to Fund Financial Planning Programs to Help Stem Military Suicides:
  • Protect Those Who Protect Us:


Advice industry split on reforms

Critics of the governments wind back of financial planning laws are turning to a Senate report out next week that they hope will help prompt further reforms of a financial planning industry dogged by collapses and scandals.

Next weeks report into the performance of the corporate regulator – launched in the wake of the Commonwealth Bank financial planning scandal – is expected to call for further reforms to the financial planning sector.

It will follow the release on Friday of the governments planned changes to Labors Future of Financial Advice (FOFA) laws. The Coalitions plan, unveiled by Finance Minister Mathias Cormann, was panned by consumer groups and the not-for-profit sector but supported by some of the big banks and bank-linked funds.

The report into the Australian Securities and Investments Commission will end a six-month inquiry into the regulators performance, including its handling of rogue planners inside the Commonwealth Banks financial planning division.

Romania’s largest lender granted 70 percent more unsecured loans in the first …

Romania’s largest lender BCR granted over 65,000 unsecured loans in the first five months of this year, 70 percent more than in the same period of 2013. More than half of these are consumer loans, while the rest are credit cards and overdrafts, the bank announced.

The average value of a consumer loan was up 30 percent compared to the same period of last year.

“This year we see the first signs of growth on the consumer loans segment,” said Andrew Gerber, BCR’s retail products director. He mentioned that more clients are refinancing their existing loans with BCR, which allows them to also get more money.

According to the bank, more clients are now taking loans to buy high tech products such as tablets, laptops, smartphones, and less of them are looking for traditional appliances. People also take credits for home renovations, small land purchases, holidays, education, training courses or family events, the bank mentioned.

BCR extended its promotion campaign for new consumer loans until June 30, 2014. The bank offers consumer loans with interest rates starting from 8.5 percent per year. The annual effective rate (DAE), which includes the other costs of the credit, is 10.08 percent.

Andrei Chirileasa,

3 Important Things the Consumer Credit Report Can Tell You

Investors often look for the newest piece of information to get a leg up on the market, but that data is often already figured into market activity. Though its a lagging economic indicator, the monthly consumer credit report from the Federal Reserve offers a big-picture view of the economic health of the country, allowing investors to operate under a better understanding of how the markets may move going forward.

Behind the times
Five weeks after each months end, the Federal Reserve releases its consumer credit report, which provides some key statistics on trends for (non-real-estate) borrowing including credit cards, student loans, and auto loans. Because consumer spending accounts for nearly two-thirds of GDP consumption in the US, consumer credit use can be a major indicator of overall growth trends.

But because it is released weeks after the monthly consumer-confidence and retail-sales reports, analysts and investors may overlook some of the deeper revelations within the consumer credit report. Typically, analysis will stop at the headlines, with simple reporting on the total outstanding debt ($3.18 trillion in April 2014), the current growth rate of consumer debt (10.2%!), and credit card usage (up $8.8 billion for the month).

While headlines are great, they still focus on the past. Here are three key forward-looking trends you can interpret from the consumer credit report — if you know where to look.

1. Impact of other macro indicators
Consumer credit use is exceptionally sensitive to consumer confidence and other economic indicators. With the release of Aprils data, investors can see how continued improvement in the jobs market, increasing homes values, and strong consumer sentiment toward the economys recovery have affected spending habits.

The use of revolving credit, mainly credit cards and other unsecured loans, jumped by more than 12% during the month. This increase was the biggest since before the recession. What investors can interpret from the heavier use of credit cards is that personal income has increased enough to support a heavier debt load — this is thanks to more employed consumers, higher home and stock values, and confidence in the future stability of the economy.

Viewing the monthly consumer credit reports will give you a better sense of how each economic factor affects consumer borrowing habits, providing a great gauge for how trends will develop.

2. Credit availability and lenders sentiment
One of the biggest problems during the financial crisis and subsequent recession was a credit crunch, when very few banks or finance companies would lend money to borrowers.

Though its not always the freshest data, the report includes average interest rates for various types of consumer credit accounts, including 48-month auto loans and credit cards. Through the interest rate trends over time periods, you can see how lenders are feeling about the creditworthiness of their borrowers.

Thanks to continued improvements in delinquency rates, the top credit card lenders including American Express (NYSE: AXP) , Bank of America (NYSE: BAC) , and Citigroup (NYSE: C) have been able to loosen crediting standards, reduce charged interest rates, all while maintaining steady levels of interest income for those accounts.

Credit Card Write-off Ratios | The Motley Fool  | Data from Company 10-Q filings.

As borrowers pay down balances and reduce the frequency of delinquencies, banks and other lenders will often loosen qualification standards to offer credit more broadly. Over the past several months, most account types have experienced interest rate decreases, with auto loan rates falling 20 basis points since the end of 2013. This signals to investors that banks are feeling more confident in their borrowers abilities to repay loans.

Since banks are often willing to loosen standards for auto, commercial, and business loans first, investors should feel confident that other loan types will follow suit in the coming months — particularly the stringent standards for mortgages.

3. Benchmark rate flow-through
Last summer, the entire market hung on every word uttered by the Federal Reserve to glean what it could about the regulators intentions for raising its benchmark Federal Funds interest rate. While theres still plenty of interest in the topic, investors have turned their focus to other items.

Benchmark rates do have an impact on consumers, though its not as immediate as last years panic seemed to imply. It can take anywhere from six months to a year for changes in benchmark rates (the Fed funds rate and prime rate) to flow through to the consumer level.

By monitoring the same rates that tell you how lenders are feeling about their customers, you can see how interest rates are moving in response to regulator activity.

If Chairwoman Janet Yellen and the rest of the Federal Reserve board members raise the benchmark rates, investors can anticipate the rise in consumer rates down the line. Alternately, if rates have been declining consistently (as shown in the recent data set) but abruptly jump, investors can look to changes in the benchmark rates to assess the situation.

Bigger than the numbers
Though its not as timely as some other monthly reports, the Federal Reserves consumer credit report offers deeper insight into trends that span the entire US economy — not just how much credit card debt the nations consumers are using. Each month, look at the ongoing borrowing trends in order to better anticipate future market activity.