Tag Archives: loan

Breaking The Cycle of Debt

One of the problems with money is that there never seems to be enough of it to buy all the things we want in life. However, the lack of funds doesn’t necessarily stop some of us from getting the things we desire. Thanks to our culture of credit, there are many sources from which we can borrow – bank loans, credit cards, payroll advances, and informal money lenders.

I can still recall my first loan transaction. After graduating from university, I wanted to buy my own television so that I could determine what I wanted to watch instead of depending on my parents’ viewing preferences. Even though I didn’t have any money to buy one, my mother had saved up enough money in my credit union account over the years to allow me access to a loan.

Thinking back on that experience in which I had to fill out forms, get proof of income and find a suitable guarantor, I remember that it made me feel important, as if I was doing a very grown-up transaction. It also felt great knowing that I could get what I wanted even though I didn’t have any money! Continue reading Breaking The Cycle of Debt

Small Business Financing: What you need to do to get it

The entrepreneurial spirit is alive and well in Jamaica, as statistics show that more and more people are opting to start their own small businesses. However, idealistic business owners are often hit with the harsh reality that most enterprises need financing in excess of what their pockets can provide.

Last week we looked at some funding options as outlined in the Small Business Financing seminar organized by the Jamaica Trade and Invest (JAMPRO) recently. These included the traditional forms of equity financing and short and long term loans, as well as alternative sources that involve making arrangements with suppliers or customers to improve the cash flow of the business.

Although there are varied options available for financing, small business owners sometimes find it difficult to access these funds. Continue reading Small Business Financing: What you need to do to get it

Beware of the Rule of 78s

I purchased a stove using a hire purchase plan over 24 months. I got a lump sum in a partner draw and decided to pay it off early. To my surprise, I had to pay more than I had expected to in order to clear off the loan before the scheduled date.

“I think this was very unfair, in fact, I think I should have been rewarded for paying my loan in full before the due date. Can you explain how this is possible?”

When borrowing money it’s very important for consumers to be very clear about all the terms of their loan contract. As we’ve discussed in previous columns, the method of calculating a loan can make a big difference in the amount of your total interest and the monthly payments due.

What many borrowers are not aware of is that some loans contain prepayment clauses that can end up costing you a pretty penny if you decide to pay up earlier than contracted. Continue reading Beware of the Rule of 78s