Banks and credit unions are different financial institutions. Although they offer the same types of services such as checking accounts, savings accounts, and loans, credit unions, and banks have several important differences.
If you trust a financial institution with your money it’s important to know how they operate and how other organizations operate.
1) Banks are privately owned profit-seeking organizations and credit unions are nonprofit organizations owned by their members.
Banks are privately owned and the goal is to make a profit. Credit Unions are owned by their members and non-profit organizations. If you have a bank account you don’t own the bank. If you have a credit union account you are a member and own part of the credit union.
2) Banks and Credit Unions are insured By Different Organizations
Banks are insured by the FDIC (The Federal Deposit Insurance Corporation) and credit unions are insured by the NCUA (National Credit Union Administration). In this tough economy with several financial organizations going under it is important to realize how your money is insured and who is insuring your money.
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3) Board of Directors
Board of Directors governs both banks and credit unions. Banks “board of directors chosen by the stockholders.” Credit union board of directors is “elected by, and from among, those members” of the credit union. In other words, if you are a member of a credit union and meet the criteria to be a director you could be elected to the board of directors. Directors on a bank’s board of directors are often paid for being board members. Directors on a credit union board of directors are volunteers.
Credit Unions generally offer better rates on loans and credit cards since credit unions are not-for-profit organizations. Credit Unions generally pay higher interest on savings accounts than banks as well.
Banks are open to just about anyone. Credit Unions are limited by their charter. However, most people are able to join some type of credit union. The credit union I belong to is open to anyone who lives, works, or worships in Washington County.
My credit union is fairly limited by location. A bank, on the other hand, could have branches across the country which is great if you need to handle banking issues while traveling.
To get a personal loan these days in the United States is very simple. First, you just need to find out who are the lenders that lend loans even to borrowers with bad credit. To do that, just browse to a website like OpenLoansUsa.com and submit your loan request.
For example, if you are looking for a personal loan in California, just open this page, submit your personal and banking details, and wait a few minutes. Then, if connected to a lender, you just need to finalize your application at the lender’s page and they will guide you through the rest of the process. After that, you will probably need to give them some information and you will have your loan in a very short period of time.
Direct lenders often deposit the money straight into your account other times they will give the cash on the spot. You will usually get the money the very same day you apply for it. The only thing you need to do is to make the lender understand your request for how much money you are applying for and then fill out the basic information necessary for them to process your loan.
After you receive the loan, it is imperative that you understand you must repay the loan on time. A lot of lenders providing personal loans are very strict when dealing with their borrowers. They may treat you very well in the beginning and this will remain the case if you hold up your end of the deal, however, if you do not repay at the terms that you have agreed to your relationship with the lender will suffer.
A personal loan is a contractually binding agreement between you the borrower and the lender. You are under contract to repay the lender back in the allotted amount of time determined by the agreement you sign.
If you do not repay the lender on the terms of the contract it could mean serious financial consequences to you (the borrower), especially if this happens more than once.
When you borrow money and repay it in monthly payments over a long period of time it is an installment loan.
A payday loan, for example, is typically paid back in a matter of days or by your next paycheck. Lenders of payday loans do not usually extend the repayment past your next paycheck.
Online is the best way to obtain a personal loan. You don’t have to drive around wasting your time and gas to find the lending institutions to loan you the money. On the internet, all the companies will be right there for you and you can easily pick and choose the best agreements and interest rates in the comfort of your home. After you fill out the application and are approved you go to your closest ATM and get the money.
You will want to make sure you can pay these loans back in the time period set in the agreement by the lender. The loan facilities dealing with short-term loans do not usually perform a credit check. This means that even if you have a low credit score you should be able to obtain a loan. The borrower just needs to show proof that they have the income necessary to repay the loan in the time allowed by the lender.
While a lot of people are struggling to hold on to their homes, many others are looking to purchase a home right now.
Experts say that if you have everything in order to purchase a home right now, then it’s the best time to do so.
With all the foreclosures going on right now, a qualified buyer can get a great deal on a home. However, if you listen or watch the news you have been hearing that it is near impossible to get any type of home mortgage loan right now.
That is not true.
While it may be harder for many people to qualify for a home mortgage loan right now, many others are still able to.
The first thing you should do before even looking for a new home is to make sure you have your finances in order. Make sure you review your credit report and clear up any issues that are on them. You don’t want any surprises once you have found your dream home.
Next, you should figure out how much you can afford to pay in monthly housing expenses. This may be best to do with a financial planner who has access to the current interest rates being offered.
Once you know your price range you can make sure that you have the necessary funds for your down payment. For the most part, the days of zero percent down are gone.
Now before you begin looking for a home you should really find a lender that you want to use. This will allow you to get pre-qualified before you begin looking for a home.
With the way, the lending industry is you are going to want to find a stable lender. For convenience and better customer service, I recommend looking for a portfolio lender.
These lenders are usually less credit score driven than other lenders, and you will always know who is servicing your loan.
Once you have done these steps you are ready to hire a real estate agent and start looking for your home. Knowing exactly what you can afford and what you are pre-approved to buy will keep your search simpler.
Sometimes your lender can refer you to a real estate agent if you don’t know one or don’t know the area very well. The choice is yours to make. Just remember now is a great time to get a good deal on homes that are for sale.
It’s no secret that times are tough. The bad economy affects not only those in the job market but also college students.
Choosing a college major has never been so important. With education costs increasing, and job opportunities after graduation waning, choosing a college major is critical to your success.
In addition to choosing a college major, it’s also important to graduate as soon as possible. Not so long ago, it wasn’t a big deal if it took you six years full time to obtain your degree.
The reason it took longer than the customary four years was because students had a hard time choosing a college major. Choosing a college major is now critical.
Tip #1: Be Rational
I am going, to be honest with you. While I enjoy my profession and like my job, I didn’t wake up one morning and say to myself “Gee. I want to be an accountant.
Won’t that be FUN??!!” On the contrary. What helped me in choosing a college major was a little bit of old fashioned rationality.
I wanted to see the world. I wanted to speak multiple languages and be well-traveled. I wanted to write – man I always loved to write. I wanted to play my oboe – yes, I played the oboe through my youth.
The perfect career for me would be an oboe-playing international journalist. You can see how choosing a college major would be hard for me given what I love.
Enter International Business. This was my first college major. I was at Harding University in Searcy, AR and among my required courses was beginning accounting.
I would be lying to you if I said the class was dynamic and fun. It was quite the contrary – it was very technical and intense. What inspired me was the instructor. He told us how many career opportunities there were in accounting.
I got online when I got back to my dorm room. It hadn’t dawned on me to think about getting a job after graduation when I was choosing a college major!
I left Harding University and went to a state school and had no problem choosing a college major there. I started out as an accounting major and graduated three years later. I completed my degree in the customary four years.
I am not telling you to choose a major in accounting. I am telling you to be rational about what you choose. When you are choosing a college major, make sure it’s something you will actually use and will actually pay your bills.
Tip #2: Choose a College Major in Your First Two Years
The first two years of college curriculum is usually general education requirements required of all students. You have about two years to figure out what you want to go in to. When you are choosing a college major, make sure you do so quickly – within your first year or so.
If you don’t know what to do with your life, maybe you should do yourself a favor and drop out of college. Sound harsh? I don’t mean it to. It’s just that you are wasting precious years of your life drifting in uncertainty.
It is quite possible that you can put off choosing a college major, only to end up with a degree in general studies six years later. A degree in general studies will not get you a job when you graduate.
Tip #3: Know Your Strengths and Weaknesses
If you have always had a hard time with math, then when you are choosing a college major you really shouldn’t go into statistics or finance. If you have always had a hard time reading, you shouldn’t study French literature. Be honest with yourself and know where your strengths and weaknesses are.
For instance, I would love to be a nutritionist. However, I am chunky. I have slightly bad eating habits that cause my weight to yo-yo 5-15 pounds a year. I would not make a good nutritionist. When I was choosing a college major, I stayed clear of anything to do with physical fitness.
If you choose a college major that offers you great job opportunities after graduation, and you are doing something you have always done well in you will find you will excel.
Tip #4: Know Your School’s Strengths and Weaknesses
When someone chooses a college major such as accounting, the school from which the degree is granted matters very little. As long as you pass the CPA exam, you are qualified for any entry-level job. However, some other college majors aren’t as lucky.
There are some college majors that degree-granting school matters. It may not be fair, but it’s true. I don’t want to cite examples in this article, because I don’t want to hurt anyone’s feelings.
Choosing a college major is tough even when the economy isn’t as bad as it is. With the current economic situation, it’s vital to choose a college major that is reasonable. You go to college to get the training to be able to do something to support yourself for the rest of your life.
Furthermore, you cannot afford to stay in college five, six, or seven years. The exception to this is if you are going into a profession such as dentistry, medicine, or the law.
When you are choosing a college major, stay rational, choose your college major expeditiously (within the first two years), and know both your and your school’s strengths and weaknesses.
If you keep those four ideas in mind, choosing a college major will be one of the best decisions you have ever made in your life.
Debt Consolidation is nothing but getting a fresh new loan and paying off all your smaller debts like medical bills, credit card dues, grocery and department store dues, etc.
These are the small unsecured debts. The new consolidated loan is usually a secured one with some of your property as collateral against the loan.
The monthly dues on this loan will usually be less than the total payments on the unsecured loans and will help save a sizeable amount.
Debt Counseling is where an experienced counselor will go over your income and expenses and prepare a budget. You will be required to sell some luxury assets like an additional car or a boat and advised on cutting down expenses.
This kind of counseling is given for both profit and non-profit companies. The money from the sale of your assets goes to the payment of some of your debts including credit card dues.
The debt counselor or the counseling company liaisons between you and your creditor and arranges all the transactions and takes a fee for the services rendered.
Debt Settlement is the art of negotiation with your creditor and persuades them to take a lesser amount than you actually owe in full settlement of your debt.
There are firms that will do the negotiating for you or if you are confident and know the ropes you can do-it-yourself.
The negotiator or the negotiating company takes a percentage of the amount by which they got the debt reduced.
Another method is to try to modify the loan. This is called “Loan Modification”.
Here an attempt is made to either reduce the rate of interest or make a modification in the tenure of the loan or reduce the principal amount or a combination of two or three of the above depending on the circumstances and the creditor’s willingness.
Your budget is prepared thoroughly with necessary cuts in unwanted expenditure. This method is usually adopted in the case of mortgages so that the homeowner does not lose his home.
Filing for bankruptcy is the last and final option for getting out of your debt. If your bankruptcy application is approved by the court, you are not responsible for your debts any longer.
The court will order that your assets be sold and the debts cleared off. At times the court may not decide in your favor and you will have to resort to other methods of debt settlement.
But filing for bankruptcy is fraught with a lot of difficulties and your credit history and your financial future is destroyed.
It is happening more and more every day. In some areas of the country, it is the rule, not the exception.
This trend will get larger and larger, creating a real dilemma for everyone involved, as it is unclear what happens next and what to do about this situation.
It is like the groom not showing up at the wedding or maybe better described as the executioner not showing up at the hanging.
Here is the deal.
On the one hand, the banks need to foreclose on defaulting loans, that’s the rule.
Once defaulted and noticed and the process closely adhered to, the home eventually is scheduled for liquidation by auction.
At this event, it is hoped that someone will bid inadequately and the bank will sell or liquidate the property converting the asset, the house, to cash for the bank.
Ownership changes hands and the previous owner is out the door, on the street, without ownership of their home.
The new owner steps in and the bank while taking a loss receives some consideration as a payoff. That’s the plan.
Now what is happening is, the bank goes through the process, perfects their position, notices the owner and the community, advertises and on the day of the foreclosure auction, they withdraw the event and stop everything.
Who owns the house then? It’s still the original owner, as he has been brought to the edge but not pushed over.
Why would a bank do this? Difficult to know exactly what they are thinking but there are some obvious reasons we can see.
First, the bank has determined that the likelihood of a bona fide adequately high bid is all but zero.
If the auction occurs and no one bids the bank ends up owning the property they must now ensure it, pay for the utilities to protect it, be responsible for maintenance and repair, pay the taxes, market it indefinitely until a buyer is eventually found.
This is extremely expensive, time-consuming and not the business the bank wants to be in.
Thus, they are more and more frequently bringing the foreclosure process to the brink of completion and then walking away, at the auction date, not completing the process, having determined that no one will show up to bid.
The bank does not want to own the home, thus, they allow the status quo to remain, the owners in the house, ownership not having been changed, and no payments expected or made for an indefinite time period while everyone waits for something to happen.
Should the economy improve, the bank can always fulfill its mission and auction the house. Until then the family lives free in a house that for all practical purposes is owned by no one.
This leaves the family to care for the house, and maintain its viability as the bank waits for the economy to mend itself, which it believes will surely occur…sometime.
What should the owner do? A hard call, some stay on living, without cost, trying to repair their own financial condition, get a new job and either rework their debt obligation with the bank or walk away looking for other living opportunities, now that they have repaired their own financial situation.
It is new ground, never experienced before, thus, there is no history to follow and learn from. The fact is, this is what is happening all across America.
In Detroit, entire neighborhoods are being abandoned by the banks, and the homeowners are abandoning their homes leaving blocks of unwanted, not lived in, properties that neither the bank nor the borrower want or continue to live in or maintain.
Ownership and its responsibilities appear to be the hot potato that no one wants to get stuck with.
It’s unusual times, unusual problems, unusual actions, on everyone’s part.
Be aware, pay attention and make decisions with this issue in mind, it may apply to you.