Latest news with #personalloans
Daily Mail
2 days ago
- Business
- Daily Mail
Post Office to offer personal loans as part of plan to raise income for postmasters
The Post Office will offer personal loans to customers for the first time since 2023, in a bid to generate more revenue for postmasters. It will offer personal loans of up to £25,000, with rates starting from 8.1 per cent APR. The new loan offering comes as part of the Post Office's promise to deliver a 'new deal for postmasters'. This was unveiled in November 2024 to increase the total annual income of postmasters through a number of revenue-sharing measures. Under it, the Post Office has promised a quarter of a billion pound boost to postmasters' income by 2030. The Post Office has already increased the amount of money postmasters receive for handling cash transactions as part of this deal. The personal loans tie up will generate additional income, of which some will be shared directly with postmasters. Post Office personal loans will be available online only. The amount available to borrow ranges from £1,000 to £25,000, with rates starting at 8.1 per cent APR and repayment terms spanning one to five years. The loans will be offered in partnership with credit platform Lendable. Lendable is an artificial intelligence-enabled lender, founded in London in 2014. It says it uses AI to identify low-risk borrowers using data beyond their credit score, allowing it to accept more borrowers at lower rates. Borrowers will receive interest rates tailored to their specific circumstances, and Lendable claims most will receive their loan in under a minute. Ross Borkett, Post Office banking director, said: 'By developing our commercial offering, we will generate income to be shared with postmasters and help sustain their presence in communities nationwide. 'We are proud to partner with Lendable, one of the UK's leading homegrown fintech companies, whose AI helps consumers get more from their finances.' The Post Office previously offered personal loans through its partnership with Bank of Ireland, but this ended in 2023.
CBS News
21-07-2025
- Business
- CBS News
$20,000 HELOC vs. $20,000 home equity loan: Which is cheaper this July?
If you need $20,000 in financing right now, you may be thinking about one of the traditional ways of borrowing with a credit card or personal loan. But in the interest rate environment of July 2025, the costs associated with both are high, with interest rates on personal loans around 12% now and those on credit cards just under a recent record high of 23%. If you're a homeowner, however, even one with just a few years of mortgage payments completed, you may be able to access this much money with ease, tied to an interest rate many points lower than these two popular options. Two of the more popular ways are home equity loans and home equity lines of credit (HELOCs). These products allow you to borrow from your accumulated equity and they come with favorable tax advantages if used for select purposes. But they don't operate identically and they don't come with identical interest rates, either. So, if you need $20,000 worth of equity now, it helps to know which will come with the cheaper repayments if applied for this July, specifically. Below, we'll do the math. Start by seeing how much home equity you'd be eligible to borrow here. The average HELOC interest rate is 8.27% right now, while the median home equity loan rate is 8.28%, according to Bankrate. While that makes a HELOC marginally cheaper now, it may not be the case for very long, as HELOC rates are variable and liable to change monthly for borrowers based on market conditions. Home equity loan rates, on the other hand, are fixed and will remain constant until refinanced by the homeowner. Here is what each will cost now, assuming the HELOC rate remains the same over the common 10- and 15-year repayment periods: So, right now, payments on either product are essentially the same. Being cognizant of the inevitability of HELOC rate changes, however, prospective HELOC borrowers should calculate their future repayments against rates both higher and lower than today's average. For example, if the average HELOC rate ticked up 25 basis points to 8.52%, the above payment would tick up $3.15 to $248.19 monthly for 10 years and $2.92 ($197.18 monthly) for 15 years. And if it dropped by 25 basis points to 8.02%, it would fall by $2.65 to $242.87 monthly for 10 years or by $2.90 to $191.36 each month for 15 years. But the key here is to calculate variability. With the home in question functioning as collateral, it's critical that repayments can be made with ease, and, if in doubt, consider locking the home equity loan rate now, even if it's marginally higher. Compare your current HELOC and home equity loan offers here to learn more. The payments homeowners will be expected to make when borrowing $20,000 with a home equity loan or HELOC are essentially the same this July, but that doesn't mean they will be in August, and they're almost assuredly likely to be different in the months and years to come. Take the time, then, to calculate costs here with precision and don't forget to account for any fees or closing costs, which could vary based on the lender.
Yahoo
12-07-2025
- Business
- Yahoo
Online lenders vs. banks and credit unions: Which is better?
Banks, credit unions and online lenders offer personal loans with rates and terms that rely on your credit and finances. Banks and credit unions are a solid pick for established borrowers with a positive credit history. Perks often include lower rates and more customer service options. Online lenders are a great choice for borrowers who need funds fast or don't have the best credit scores. When choosing a personal loan lender, you can find reputable options from traditional lenders — banks and credit unions — as well as online lenders. Banks and credit unions may offer the best personal loan rates and the added security of working with a well-established lender, but online lenders often provide fast funding and can make it easier to qualify. The best option for you depends on your finances, credit score and funding needs. You should also consider additional features like minimal fees and in-person service when comparing credit unions and banks versus online lenders. Banks Online lenders Lower interest rates Lower starting rates but higher maximum rates Slower application process Faster application process Rigorous approval process Easier approval process Stricter eligibility Looser eligibility Credit union and bank loans typically have stricter eligibility criteria than online lenders. They also tend to take longer and often require in-person visits to finalize the loan. Since getting a credit union or bank loan is often more rigorous, these institutions can typically offer lower interest rates and provide perks for existing customers. Online lenders are more likely to sell your debt to another servicer (or a debt collector, if you default), so they often have a faster application process and more lenient eligibility requirements. They may also offer great starting rates since they don't have as much overhead as a brick-and-mortar lender. However, online lenders tend to have higher maximum and average personal loan interest rates and more fees. The primary advantage of an online lender is its convenience. You can complete the entire process online, and funding is typically available within a few business days. Rather than only considering one type or another, shop around and compare offers from multiple lenders first. You'll need to consider the rates, loan terms, qualification requirements and fees. It's also important to check your credit score and understand your budget before applying. A bank may be the best option for you if you have an existing relationship with one, have good to excellent credit and have time for a longer personal loan application process. Banks may offer lower interest rates on their personal loans as well as other perks for existing customers. They also frequently have in-person customer service and are more highly regulated than online lenders. Lower interest rates: The maximum rates charged by banks are typically lower than those imposed by online lenders. Since eligibility metrics are more stringent, the risk to the lender is reduced, allowing them to offer lower rates. Potential rate discounts: In addition to industry-standard discounts like enrolling in autopay, existing bank customers may qualify for a relationship discount. In-person service available: Banks offer flexibility for customer service. Most banks have physical branches where you can speak to a loan officer, in addition to digital banking options. May not offer prequalification: Some banks don't allow you to prequalify for a loan, making it more difficult to compare rates and terms. Some big-name national banks don't offer personal loans at all. Stricter requirements: Banks also tend to have stricter eligibility requirements. Borrowers with bad credit or limited credit history may have difficulty qualifying with a bank. Longer processing time: Banks typically take longer to process personal loan applications, and you may have to visit a branch to apply. A credit union shares many of the same pros and cons as a bank, but the two institutions have some differences that you'll need to consider before choosing which option fits best with your needs. Even lower interest rates: Credit union personal loans typically offer lower interest rates and fewer fees than banks, and the application process is easier once you're a member. Interest caps: The National Credit Union Administration also caps interest rates at 18 percent for federal credit unions — that's half the cost of loans with some lenders. Member focused: Credit unions are often member-owned, not-for-profit institutions within the community, instead of big corporations. As such, they typically have more personalized customer service and a member focus, with representatives that will likely remain more consistent. Must be a member: A credit union is a member-owned financial institution, so you must be a member to qualify for a personal loan. This may require living in a certain area or working in a specific field. To join a credit union, open an account and provide a government-issued ID, among other information. Limited branches: As a smaller, member-owned institution, there are likely fewer branches available outside the community. If you live or work farther away, it can be inconvenient to do business with a credit union. Fewer digital banking tools: Some credit unions may not be as technologically advanced as some corporate banks with large teams dedicated to tech. For example, the credit union may not have a mobile app, or it may not be compatible with other finance apps. Getting a personal loan from an online lender may be better if you're worried about being able to qualify, need money quickly or prefer the convenience of a fully online application. For new borrowers, prequalifying could provide a better understanding of your financial situation and your ability to borrow. That said, many banks also offer the ability to prequalify, so you can compare your rates with both and choose the best offer. Prequalification available: One of the biggest benefits of online lenders is that they typically allow you to prequalify. This process allows you to see what rates you may be eligible for based on a soft credit pull that does not impact your credit. Easier to qualify: Some online lenders have less strict requirements than banks, especially if you need a bad credit personal loan. Rates may be higher, but they can be helpful if you need the funds and can afford to make payments. Educational resources: An online lender may have information on financial skills alongside various calculators, informative videos and other financial literacy tools. No in-person customer service: To keep operating costs low, online lenders don't have in-person branches. Instead, you'll need to call or email if you need help with your loan. Higher interest rates: Online lenders typically have less strict eligibility requirements, so you may face higher interest rates, potentially as high as 36 percent. Potential scams: Because online lenders tend to be less regulated, make sure you choose a legitimate lender. To avoid personal loan scams, compare top lenders and read customer reviews before choosing a lender. Banks, credit unions and online lenders are three of the most popular personal loan providers, but there are other options for financing a purchase, too. These alternatives to personal loans may include credit cards, peer-to-peer loans or buy now pay later (BNPL). Be sure to compare the different kinds of lenders to find the best loan, and consider the alternatives. Use a personal loan calculator to understand the cost of borrowing and ensure that a loan fits your budget. Sign in to access your portfolio
Reuters
11-07-2025
- Business
- Reuters
Chinese banks stumble on Beijing's consumer lending push
BEIJING, July 11 (Reuters) - Chinese banks are struggling to comply with new Beijing guidelines to boost consumer credit as they reel from a surge of defaults on personal loans and have a hard time finding households in good financial shape that want to borrow. Since March, financial regulators have issued multiple directives urging banks to offer more, and cheaper, loans to spur consumption, as part of broader efforts to counter the impact of the trade war with the United States. This prompted banks to market personal loans at record low interest rates below 3% initially, before raising them back amid concerns over shrinking profit margins. Loan managers and bank executives told Reuters they are struggling to raise consumer lending, citing subdued demand, as well as concerns over an already rapidly growing pile of bad household debt and uncertainty over their clients' incomes. Recent wage cuts in the financial industry, manufacturing and the state sector have further dented households' financial health while higher U.S. tariffs are fuelling concerns over jobs and income stability. "It's very difficult to find borrowers for consumer loans," said a branch head at a state-owned bank, requesting anonymity due to the sensitivity of the topic. "Banks are caught between meeting lending targets and controlling bad loans." "If defaults rise, branch officers face penalties. Many loan officers borrow from each other's banks to meet lending quotas." The People's Bank of China and the National Financial Regulatory Administration did not immediately respond to requests for comment. Consumer loans grew 6.1% in the first quarter, slower than the 8.7% in the same period of 2024 and the 11% in January-March 2023, according to the central bank. Data for the second quarter is expected in coming weeks. The overall NPL ratio of China's commercial banks was 1.51% as of the end of March, remaining steady compared to 1.50% at the end of 2024, official data showed. Smaller rural commercial banks posted a higher NPL ratio of 2.86% in the first quarter compared to 1.22% at major state banks. Official data doesn't disclose the NPL ratio of overall consumer loans, but the bank executives and loan managers told Reuters the defaults on personal lending have risen sharply this year. BAD LOANS PILE UP The banks' struggles bode ill for official efforts to boost lending to consumers, seen as a faster alternative to raising household incomes. The latter would require indebted local governments spend more on social welfare and civil servants pay, among other measures. Any debt-driven jolt to consumption is likely to prove "transitory", said Lynn Song, chief Greater China economist at ING. "Income growth-driven consumption would be strongly preferable in terms of achieving a more sustainable recovery," Song said, adding that was a more difficult task for authorities. Economists aren't concerned about absolute household debt levels, which are about 60% of economic output in China, compared with about 70% in the U.S. and more than 90% in South Korea. But they worry about how quickly non-performing loans (NPLs) in the consumer debt sector have been rising. In the first quarter of this year, Chinese banks put up 74.27 billion yuan ($10.34 billion) of NPLs for sale, a 190.5% increase from the same period of 2024, data from the Banking Credit Asset Registration and Transfer Center show. About 70% of them were personal loans. "We have a growing pile of bad loans. For many clients who can't repay, all we can do is negotiate extensions," said a loan officer at a major state-owned bank. The officer said his bank prioritised writing off NPLs over issuing new loans. The Industrial Commercial Bank of China ( opens new tab, the world's largest commercial bank by assets, said its consumer NPL ratio rose to 2.39% at the end of 2024, from 1.34% a year earlier. Smaller, regional lenders are faring much worse. Bohai Bank's consumer NPL ratio jumped to 12.37% in 2024 from 4.44% the previous year. Harbin Bank's rose to 5.51% from 3.94%. "Clients are in poor operating conditions due to the tariffs war and unable to repay their loans," said a regional bank manager. Another key challenge for banks is that consumers don't want to borrow. A central bank survey of 20,000 households showed that 61.4% intend to boost savings — an increase of almost 20 percentage points from pre-pandemic levels. "The fundamental issue is that income growth is slowing and households are anxious, so they are restraining their spending and borrowing," said Christopher Beddor, deputy director of China research at Gavekal Dragonomics. "It's not that they can't get a cheap loan." ($1 = 7.1770 Chinese yuan)
Khaleej Times
10-07-2025
- Business
- Khaleej Times
How do you handle a situation when someone owes you money
Lending money to a friend in need can seem like the right thing to do, but what happens when they can't pay it back? It can quickly lead to a fallout, animosity and the threat of calling in lawyers then court. The most frequent debt-related cases tend to fall into a few main categories: personal loans (between friends, family, or acquaintances), unpaid invoices, credit card or bank debt, and rent arrears (tenants not paying landlords), according to Musaab Ali Alnaqbi Advocates and Legal Consultants. In the UAE, post-dated cheques also come up a lot. If someone issues a cheque that bounces, it can quickly turn into a criminal or civil case. Lawyers typically get involved at three stages: Pre-litigation (negotiation phase) which can involve drafting a legal notice and initiating settlement talks. Next you have the litigation phase — filing a civil claim, attending hearings and enforcing judgments. Finally, there's the post-judgment phase which includes collecting the debt via court enforcement (e.g., freezing bank accounts, seizing assets). 'It's often smart to consult a lawyer early — even before sending a demand letter — to ensure it's worded properly and legally sound,' said Adv. Ibrahim Khaleel, Managing Partner at Musaab Ali Alnaqbi Advocates and Legal Consultants. An important part of the process involves a case review – examining contracts, invoices, WhatsApp messages, and other documentation. 'It's all document-based so you really need a good water tight written agreement in place,' said Peter Lazarus, managing director of Elite Legal. 'But it's not impossible to open a case if you only have communication to prove the terms — whatsapp and emails.' Yes Whatsapp messages can be used in court. 'So always be very careful how and what you say. The golden rule is — would you be embarrassed if the message was read in court?' added Lazarus. Next comes a legal notice – sending a demand letter asking for payment within a set deadline (usually seven days). Then negotiation – attempting a settlement before filing. As a last resort, a court filing – if the debt remains unpaid, then file a case in the civil court (or labour court if it's salary-related). Court proceedings will then follow – attending hearings, submitting evidence, responding to defenses. Finally, the enforcement – if a judgment is issued in your favour, filing for execution (freezing accounts, travel bans, etc.). Employment Employment disputes make up a significant share of legal cases in the UAE, typically involving unpaid salaries, end-of-service benefits, or other contractual entitlements owed to employees. 'I target speaking to bosses of the debtor companies as they are the decision makers and people in authority to get the debt cleared,' said Lazarus. How and when does he get involved? 'As soon as the client gets the 'false promises' to pay, this is a red flag that delay after delay is an issue waiting to happen. The older the debt the less chance of recovery. I use the court as a last resort and try to settle the cases amicably with face-to-face meetings, that way it remains professional and a solution can be found,' he added. Costs Legal fees in the UAE can vary significantly depending on the complexity of the case. In most situations, law firms will agree on fixed fees to be paid in advance of starting work. Some law firms may offer reduced fixed fees combined with a success fee, which is only payable if the case is successful and the client recovers the debt. Musaab Ali Alnaqbi Advocates and Legal Consultants gave a helpful breakdown. Legal fees: Dh5,000–15,000 for simple cases. Court fees: usually six per cent of the claim amount, capped at Dh40,000 in most emirates. Translation costs: Dh500–2,000+ depending on documents. Power of Attorney notarisation: around Dh250–500. 'In total, for a simple claim of under Dh100,000, be prepared to spend Dh8,000–20,000 in total legal and court costs, though some lawyers offer flat fees or installment plans,' said Khaleel. Ahmed Tony, a partner at Matouk Bassiony law firm, explained that the UAE operates a dual court system comprising onshore and offshore court systems, each with distinct legal frameworks and procedures. The offshore courts provide for a common law jurisdiction (similar to English courts) and are independent from the local court system. This includes the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market Dhabi (ADGM). Onshore courts, on the other hand, follow UAE federal and emirate-specific laws. Real-time updates on case status, hearing dates, and court decisions are provided through the court portals and mobile apps (like the Dubai Courts Smart App), making the process more user-friendly and predictable. 'Before starting court proceedings, it is important to keep in mind your ultimate desired outcome and whether going through with the case is worth it. For example, sometimes winning a case may not be in the business's best interest if it leads to reputational damage, waste of resources or cutting business ties with the other party,' Tony said.
