Primer on Payday Loans and Other Unsecured Personal Loans

At present, the interest on an unsecured personal loan is currently over 15% per year, says BankRate.com, assuming you can get this type of loan at all in today’s credit-starved environment. And that’s about your best such rate. Attempt to borrow against a credit card, for example, and it could be a good deal more. It’s obvious that personal loans can get very expensive nowadays.

In many situations, though, a personal loan can be just about unavoidable for many of us. What if the car won’t start and you need an expensive engine repair to get it up and running again? Or your daughter needs braces? Or the washing machine breaks down?

Situations like these force many Americans to resort to personal loans, including high-cost payday loans. These loans now make up over 22% of the total non-mortgage installment loans at U.S. banks, up from only 11% in 1998.

However before you sign up for your next personal loan, consider the following alternative possibilities –

- Consider a home equity loan. If you own a house with equity in it, you can probably borrow against the equity at a fairly low interest rate and at the same time get a tax deduction. Check out LendingTree.com for a list of lenders.

- Selling stocks, Treasury bonds, etc., can be a fast way to drum up some hard cash – just be sure you understand you’ll have to pay taxes on any gains or interest.

- What about borrowing against your cash value life insurance policy.? This is a low-interest alternative if you have this type of policy, and it’s the most common type.

- Try borrowing against your retirement account. Ask your employer’s benefits department if this option is available. If so, it’s another low-interest alternative.

- Family or friends. Maybe your dad can fork over some cash. Just make sure you pay him back.

- Ask your creditors – particularly local merchants who may be more flexible – if they might be willing to extend your payments a month. If they are, make sure you’re not getting charged extra for the privilege of paying your bill late – or if you do get charged, find out how much.

- How about asking your employer for a pay advance – assuming of course you have an understanding employer.

Good vs Bad Debt

You need to recognize a simple fact of personal finance: Never borrow money for consumption. That’s bad debt. Only borrow for investments that will increase in value (and increase by more than the cost of the loan). Borrowing money just in order to spend it is a terrible idea, a royal road to bankruptcy or other financial land mines. As Eric Tyson says in his book, PERSONAL FINANCE:

If you spend, say $2,500 [which you've borrowed] on a European vacation, the money is gone. Poof! You may have good memories and even some Kodak moments, but you’ll have no financial value to show for it… I’m not saying don’t take a vacation. Definitely, take one, two, three, or as many as you can afford yearly. But that’s the point – what you can afford. If you need to borrow money… [then you can't afford the vacation]…

And precisely the same advice applies to almost any consumer purchase: home computers, expensive meals, clothes,, yes, even a new car – anything that decreases in value and eventually becomes financially worthless. If you have to borrow to buy it, you probably can’t afford it. According to Tyson “The financially correct amount of bad debt [you should have] is zero.”

But this does not apply to things that “retain and hopefully increase in value over the long term, such as an real estate, education or your own business.” For these uses, debt is acceptable, up to a limit – the limit being the point at which making payments causes you to be no longer able to save sufficiently to accomplish your financial goals.

All that is excellent advice, but the fact is that, at times, you simply may not be able to avoid adding to your debt load – an emergency or other urgent situation forces you to seek a personal loan. In those kinds of situations, what are your best options?

Personal Loan Essentials

Here are a few basics to keep in mind whenever shopping for an unsecured personal loan:

First, never borrow more than you need. Given the high interest rates in today’s credit environment, you’ll want to keep the amount to an absolute minimum.

Second, compare terms from several lenders. Never look at just the monthly payments – consider the total cost of the loan, including any hidden charges like credit insurance or other fees. Don’t skip the small print on the loan agreement. Don’t assume what you’re being told by a loan officer is binding. It’s what’s in writing in the contract that counts.

Third, begin by trying your credit union before a bank. Credit unions usually have more favorable terms than banks and are often willing to make small unsecured personal loans to their members.

Fourth, don’t pledge valuable personal assets when you take out a small loan – it’s almost never worth the risk. And avoid using credit cards or payday loans if at all possible – the interest rates, especially on the latter, can be prohibitive.

Fifth, be aware that the interest you pay on unsecured personal loans is not tax deductible.

Understanding Subprime Loans

If you find yourself in the subprime lending category, things get even more complicated. As you know, subprime lending has tightened up greatly over the past months (and is now almost nonexistent in the mortgage market). However, if you are employed, you can still find cash in an emergency – you just have to be prepared to pay a steep interest rate for it.

But what exactly does the term “subprime” mean? The definition varies by lender, but in general subprime means a FICO score of 650 or below. Among the other criteria commonly used are: a bankruptcy within the past five years, a foreclosure within the past 24 months, or a debt-to-income ratio of 50% or higher. Some ultra-conservative lenders will even brand you as subprime if you’ve been late on one or one or two credit card payments over the past 12 months.

There are some important factors to bear in mind if you’re considered subprime and yet need to take out an emergency personal loan. One is to recognize that you won’t be viewed the same by all lenders – so you don’t have to jump at the first offer you receive. Shop around. As said, be sure to try your credit union first – and also one or more banks that have departments providing subprime lending. Try using one of the online services that allow you to apply at several lenders simultaneously, like Lending Tree

Here are a few important points for subprime borrowers to bear in mind:

Never risk valuable assets in order to make a small loan.

Avoid personal loans which involve “fancy” terms such as balloon payments. Avoid adjustable rate loans (these have proven disastrous for thousands of subprime mortgage borrowers and can be almost as disastrous for personal loan borrowers).

Always read the fine print. Be sure you understand the terms of the loan clearly. You will be held to what is in the contract, no matter how much eye-strain it takes to read it.

Don’t allow several lenders to access your credit report at the same time. Several inquiries on your credit report within a short period can further lower your credit score.

Bigger Differences Between Regular Computers and Gaming Computers

The Gap between Gamer PCs and Regular Computers is Growing

Traditionally, the difference between your average computers and gamer PCs has always been simple: your average computer was built with nearly outdated technology and your gamer PC was built the latest and greatest components. Now as technology is taking leaps and bounds in program and game design as well as in software development and application, computer hardware has had to be improved and innovated faster than ever before. Program developers are making their most creative and exotic imaginings become virtual reality on computer hardware that is years ahead of what average desktops are normally comprised. Gamer PCs have been built to bring to life on the monitor the developers’ best renderings of their imaginations.

Innovation

In order to keep up with developers’ and players’ demands for performance, advances in hardware have grown at an alarming rate, lengthening the gap between gamer PCs and regular computers by years. One of the largest differences when looking at the latest high-end gamer PC compared to a regular system is that the latest gamer PC has liquid cooling tubes which keep the CPU and graphics cards chilled and running faster. The lack of empty space is also quite obvious; whereas, in a normal desktop there is often glaring spaces of emptiness that don’t exist in its competition.

Visual Performance

Another conspicuous dissimilarity between normal desktop computers and gaming computers is the performance when playing programs like Crisis or Skyrim. The quality of play and visual performance is astounding on computers for gamers, especially when compared with the play and visual performance on a regular desktop system. The graphics cards in the comparison above are often completely incompatible to begin with. Not to mention the CPUs running them would also be on totally separate levels in term of processing speed and power.

Speed and Price

The speed and processing power of gaming computers would normally begin near the 3.0 GHZ range. This is where you might be able to reach if you were to try and overclock the CPU on an average desktop computer. An average desktop could cost anywhere from $800-$2,000, whereas a high-end performance machine could cost upwards of $10,000-$15,000 for a cutting edge, custom built, overclocked computer.

The differences between regular computers and gamer PCs has stretched and grown in every way including dollar signs. The most obvious difference, however, is simply in performance.

On MMORPGs and Game Moderation

There is an increasing number of teens and adults who are playing in websites that feature MMORPGs – massively multiplayer online role-playing games that keep people hooked and playing online for several hours. With the growing popularity, as well as new technologies and development in computer hardware, playing MMORPGs is getting even better.

A crucial part of MMORPGs is game moderation. It is an essential aspect of the game in the sense that it prevents hackers from entering the online game arena and filters any offensive language from the players. There are hackers who share cheats and hacked codes to other players. Game moderators are responsible for making sure that players follow the guidelines set by the website when it comes to playing MMORPGs.

Moderating MMORPGs can be a daunting task. Aside from the fact that sites run these games on a global scale 24/7, there must be someone who is constantly monitoring the games and the players. Hackers and cheaters must be prevented in order to maintain security of a particular game. If your site is known to have hackers and inefficient game monitoring, you will not get a lot of players, thus affecting your sales and online reputation. That’s how important the role of a moderator is.

If you own a site that runs MMORPGs, you might want to consider game moderation outsourcing. This simply means transferring game moderation tasks to a third party service provider. The Philippines is an ideal outsourcing destination for moderation work. Aside from the relatively lower labor and operational costs, site owners can take advantage of the difference in time zones (GMT+8, EST+12). The Philippines is a great location of choice for the 24/7 business operations of Western companies. Also, Filipino teenagers and young adults love playing online games, and with the country’s cultural compatibility with Western culture, Filipino game moderators can quickly adapt to the language and attitude of players from Western countries.