Lease vs Buy Car Helpful Tips

How to decide the question, “Lease vs buy a car”? We’ll help you decide this right now, and if you decide to lease, we’ll give you tools so you never regret your choice.

Before you make a decision regarding lease vs buy a car, you should understand how leasing works, how much you’ll pay every month, where that payment number comes from and what pitfalls you could encounter.

1. How leasing works

When you lease a car, you aren’t paying for what it’s actually worth. You only pay for its projected loss in value while you’re leasing it. Over three years, for example, a $30,000 car might lose half its value. Paying back only half a car’s value, instead of the full sticker price like you’d have to if you bought the car, leaves you with a smaller monthly payment. Instead of paying $30,000 over three, four or five years (which would be $833, 625 or 500, plus interest per month), you’ll only pay $15,000 over that same period ($417, $313 or $250, plus whatever fees you’re responsible for). Compare:

Purchase rate Lease rate

$831 $471

$625 $313

$500 $250

Leasing became popular because of this lower monthly payment. It was a case of more car for the same payment, or the same car for a significantly lower monthly payment. A

But as leases became more popular, car dealers found ways to turn this into increased profits. Spread over the life of the lease, the fees they came up with were easy to hide. A $500 charge spread over four years, for example, would only add $10 to the monthly payments–easy to overlook. But as more and more fees were added, a good deal often became something less.

2. The pro’s and cons of leasing: Should I buy or lease my next vehicle?

The Cost To Lease

As we showed you before, monthly lease payments are usually lower than monthly finance payments because you’re only paying for the vehicle’s depreciation during the lease term, plus rent charges and other fees, instead of paying for the entire purchase price of the vehicle, plus interest, taxes and other finance charges. Car dealers are constantly maneuvering to get as much money from you as possible, so the more you know, the less they’ll get.

To get the best deal on a lease, make sure you understand what every one of these charges is. Monthly lease payments consist of five items: vehicle depreciation (the difference between (1) the original agreed-upon value of the vehicle minus any capitalized cost reduction and (2) the residual value of the vehicle at lease-end); payment of any other amounts included in the gross capitalized cost (service contracts, insurance, or outstanding prior credit or lease balance); rent charge for the lessor; sales tax; and any other fees the dealer is able to add.

In most states, the sales or use tax included in the lease payment replaces the sales tax you’d pay if you bought the vehicle. So you can see that you must weight out lease vs buy car and determine which path is best for you.

Posted in Uncategorized | Comments Off

International Banking – Essential for Globalization of Businesses

International banking refers to the banking services that cover a wide array of topics. It provides you personal bank accounts along with the business bank accounts also. An important feature of international banking is foreign currency services. This is a very useful feature for the people who need to deal in different currencies. You can make transactions in dollars, euro or Swiss franc.

Getting Expert Advice

Another useful service that you get from international banking organizations is traveler’s checks. All of us know the importance of traveler’s check during the traveling period. Not only can you open a foreign currency account but you can also seek help from experts regarding the international trade such as import and export of goods.

International banking institutes have investment consultants that can guide you on how to improve international trade. You can manage your bank accounts in foreign countries without any trouble. It has many other benefits also associated with it. For example, you can save a great amount of money because of lower or no taxes at all. It definitely gives you an edge over your competitors.

Globalization is the mantra today. Every business owner whether he is running a small business or big business wishes to expand his or her business beyond the boundaries of nations. International banking is a necessary tool to globalize your business. You cannot underestimate this feature because you cannot grow fast without crossing the geographical boundaries.

When you expand your business in several countries you need an effective system to manage your finances. International banking organizations offer you just the right kind of services that you need as a multinational business owner. International banks have branches in many different countries. This gives you the liberty of making payments in any of these countries. Moreover, you can get the payment in local currency saving a big amount on transactional fees.

The relations between the countries and international scenario make a huge impact on international trade. International banking services too cannot remain unaffected by the political developments at the international level. That is why international banks have to observe keenly not only the economic changes but political changes as well.

Perform a Thorough Research

So, it is well-established fact now that you need international banking services to globalize business. However, you should not select any international bank in a hurry. Perform a thorough research on the bank before you decide to open an account with them. You should ascertain that the bank offers reliable and stable services to its customers.

Posted in Uncategorized | Comments Off

Low Interest Business Loans

Regardless of the state of the economy, all entrepreneurs, either new at their trade or old hats in business, when seeking financing, tend to get caught up in haggling over the lowest possible interest rate that they can achieve.

Who can blame them? Cost savings – especially while we are still experiencing recession like economic symptoms – may be the key to their business’s survival and their personal financial future.

But, sometimes, merely basing a financing decision on just its cost (its interest rate in this case) alone can be even more detrimental. All business decisions should be taken in the whole – with both benefits and costs consider simultaneously – especially with business loans.

Let me explain: In today’s market, any offer of a business loan – regardless of its costs – should not be taken lightly given the fact that these business transactions are hard to come by. Thinking that this interest rate is too high and that a better one will come along tomorrow may just be destructive thinking as nothing may come along tomorrow – especially in this continued sluggish economy and all lenders being overly cautious.

Further, if the business owner’s decision hinges so much on the rate of the loan, then maybe a business loan is not something the business truly needs at this time or may be a decision that just spirals the business further along an unhealthy path.

Example: Let’s take a simple but common business loan situation. A $100,000 loan for 5 years with monthly payments at 8% interest. This loan would require monthly payments of $2,028 for the next 60 months. Now, let’s say the interest rate was 12% instead of 8%. This would result in a monthly payment of $2,225 – nearly $200 per month higher. A significant increase – nearly 10% higher with the larger interest rate.

This is what most business owners, when seeking outside capital tend to get caught up in – the lower rate means more savings for the business and thus a better decision.

But, what happens if the current lender will not lower the rate from 12% to 8%? Or, if another, lower rate loan / lender does not come along? Is it still a good business decision?

Looking at the cost of the loan or the interest rate is purely one sided and could potential affect the long-term viability of your business – the benefits of the loan also have to be weighed in.

Let’s say that the business can take that $100,000 loan and use it to generate an additional $5,000 in new, monthly business income. Does it really matter the interest rate at this point as the nearly $200 difference in the rate is really trivial (especially over the 60 months period) compared to possibly declining the higher rate loan and getting nothing in return (losing out on the $5,000 in new revenue per month).

Or, what if the business would only be able to generate $1,000 in new, extra income from the $100,000 loans? Then no matter what the interest rate (8%, 12% 50% or higher), the business should not even be considering a loan in this situation.

Why do I bring this up? Simply because I have seen business after business either lose out on their future potential or fatally harm their organization over a mere one or two percent increase in a business loan rate. We are just conditioned to think that if we do not get the rate we feel we deserve – then the deal is bad for us. That can not be further from the truth. Know that these conditioning instincts we tend to have are more from the fact that competitors (those other lenders seeking our business) tell us we can do better or that we deserve better – but in end only finding out that those ploys never really work to our benefit.

The lesson here is that all business decisions are more complex then we may initially think or been lead to believe. We are taught from very early in life to negotiate for the lowest costs – like zero interest car loans or buy now with “the lowest mortgage rates in decades” – either case, one would not buy a car or a house (regardless of the interest rate) if there was not a great need – a need that provides more in benefits then its costs.

The same should be done with business loans. Loans are merely an asset to a business and should be treated as such. Business loan assets should be used to generate more in revenue than they cost – the more the better. If they are not being used (like any other business asset) to generate the greatest benefit that they can generate, then they should be pulled from whatever use they are currently being employed in and put into use that will generate the greater benefit. It is simply a law of business.

Thus, merely focusing on only one side of a business decision – the interest rate for a business loan decision – can have an unforeseen, adverse affect on the business – creating more harm then good. The entire situation should be taken into advice before a decision is made.

In fact, in the case outlined above, the interest rate can increase as high as 56% for the 60 months before the cost would outweigh the benefits – provided there were no additional costs associated with the loan.

In my experience, I have always found it much easier to look at the benefits first (like the increased monthly revenue that can be generated) then search out the lowest costs options to receive those benefits. But, as stated, this is essentially opposite of what we tend to be taught in our society or in our markets (remember the zero percentage auto loans – which have the lost interest revenue built into the price). But, sometimes the best entrepreneurs think outside the box and tend to go against any conventional wisdom we may have been subject to – mostly for the benefit of others and not ourselves.

Posted in Uncategorized | Comments Off

International Finance for Trade and Commerce

International trade involves international financial transactions because different countries have different units of money. When your nation wish to buy goods from other nations, they usually must pay for the goods in the currency of the exporting country. In other words, Japan will probably demand yen, France will demand francs, West Germany will want deutsche marks, Great Britain will insist on pounds, and Mexico will demand pesos in payment for the goods they sell. Foreign currencies are called foreign exchange, and they are bought and sold in foreign exchange markets, which are markets that deal in the buying and selling of foreign currencies. Some banks specialize in financing international trade, and they are the major participants in foreign exchange markets. If an American importer wishes to buy automobiles from a Japanese manufacturer, the importer will go to a bank that specializes in financing international trade, and will exchange dollars for yen.

Exchange Rates: The foreign exchange rate is the price of one currency in terms of another. For example, the British pound might be worth 76 times more in Indian money. Historically, there have been two major types of foreign exchange rates: fixed exchange rates and flexible exchange rates.

Under the fixed-exchange-rate system, the price of one currency was fixed in terms of other currencies so that the rate did not change. The advantage of such a system is that importers and exporters know exactly how much foreign currency they can purchase with a given quantity of their own nation’s currency today, next week, or six months from now. Foreign exchange markets operated under a fixed-exchange-rate system from 1944 until the year early 1970. Prior to 1971, the value of the United States dollar was tied to gold at the rate of $1 equals 1/35 of an ounce of gold. In other words, one ounce of gold was equal to $35 in American money. Since the value of other currencies was also fixed in relation to gold, the dollar price of each foreign currency remained constant.

The disadvantage of the fixed-rate system was that it did not make allowances for changing economic conditions in various countries. For example, if the developed country like United States of America was experiencing high inflation at a time when Japan or China was experiencing little or no inflation, American-made goods would become increasingly expensive in relation to goods made in Japan or in China. As a result, Japan or China would purchase fewer American-made goods while Americans would tend to buy more goods made in Japan or in China. This in turn would lead to a serious imbalance in imports and exports between the two countries.

With a flexible-exchange-rate system, the type of system under which world trade operates today, the forces of supply and demand determine the value of a country’s currency in terms of the value of other currencies. Therefore, under this system, the price of a country’s currency can fluctuate up and down daily in response to market conditions.

The supply and demand for foreign exchange usually are largely determined by the supply and demand for goods and services. For example, if United States of America importers wish to import increased quantities of goods from a country, suppose from Japan, there will be a strong demand for the Japanese yen. This could force the price of the yen up substantially unless Japan was at the same time providing a large supply of yen in order to increase their imports from the United States of America. The demand for goods and services is not the only factor that determines the demand for a nation’s currency. Political or economic instability in other countries may cause people in those countries to exchange their currency for a more stable currency, such as the dollar of United States of America. In addition, high interest rates in a particular country may cause foreign investors to convert their currencies into the currency of that nation. This happened in the United States of America during the early 1980s. Interest rates became so high in this country that many foreign investors were prompted to exchange their currency for American dollars for investment purposes. This increased demand for dollars caused the value of the dollar to increase in terms of other currencies. The “strong” dollar made American-made products more expensive in world markets. As a result, Americans bought more foreign-made products, and foreigners bought fewer American-made products.

Balance of Trade: The amount of goods and services that a nation sells to other nations, and the amount it buys from other nations, are not always equal. The difference between the dollar value of exports and the dollar value of imports is called the balance of trade. If the United States exports more goods to foreign nations than it imports from foreign nations, it has a trade surplus. However, if the United States of America imports more than it exports, it has a trade deficit.

In 1971, the United States recorded its first trade deficit of the century. In all the years since then, except in 1975 when there was a modest surplus, the United States has imported more than it has exported, and the trade deficits of recent years have been so large that they have caused major concern among some economists.

However, not all economists agree on how serious a problem the trade deficits are, or even on their causes. Some believe that, in the long run, market adjustments will correct the problem. Others are not so sure. Some economists believe that the high trade deficits are linked to the large deficits in the federal government’s budget in the past two decades. They argue that heavy government borrowing to finance high budget deficits helps to keep interest rates high and encourages foreign investors to exchange their foreign currencies for dollars. However, so many things influence the trade deficits that it is not always clear which factors are playing the biggest role in the deficit at any specific time. The one thing that is clear is that the United States must increase its competitiveness in world markets. Like it or not, the world is moving rapidly toward a global economy. The volume of international trade is bound to grow rapidly in the decades ahead. Competition is still the name of the game, but the number of players has increased.

Balance of Payments: Economic relations between nations involve much more than just imports and exports. There are many different kinds of transactions that involve the exchange of money between nations. For example, American businesses invest funds in foreign nations, and American banks make foreign loans. In addition, the United States government spends money for foreign aid and to support military personnel stationed abroad. Americans spend money for goods and services when they travel abroad, and American citizens often send money to relatives living in other nations. On the other hand, money flows into the United States from other countries when foreign citizens travel in the United States, when foreign businesses make investments in the United States, when Americans receive dividends on foreign investments, and so forth.

Posted in Uncategorized | Comments Off

Various Types of Available Equipment Leasing

There are many people in the world who own a business but still cannot afford the new equipment due to less capital or some problems. The leasing of the equipment provides them with a source to start their business and gain profits from it. The leasing of the equipments has become very popular amongst the people and as they are provided very easily the people opt for the leasing. The people do not have to wait for the financing companies to give them a call and provide them with the finance so that they can buy the equipments. The leasing of the equipments help in many other ways like there is no maintenance cost of the leased articles which is a great relief to the owners of the business.

No down payments required:

There is no need to pay any down payment to the companies but there is a need to pay an amount which is not as high as the down payment. This again helps in saving the money and uses it for the uplift of the business. The equipments used in a office becomes outdated after a certain amount of time and if you have bought it then you have to upgrade it or sell it to some one else. But if you lease the equipments then there is no need to upgrade it. Moreover it can be exchanged with the new one that has the new technology installed in it.

Medical equipments and office equipments:

The leased equipment might vary from person to person or from one organization to the other. Different equipments like office equipments, construction equipments, medical or truck or auto are leased depending on their uses. The office equipments are most commonly leased as the price of them is very high and there would be a requirement of very large amount in order to buy the equipments. There are certain types of construction equipments that are leased by the constructing companies and medical companies lease the equipments that they require and these types of equipments are called medical equipments.

The people also take trucks on lease to move from one place to another with their bag and baggage. The trucks are not only leased by the common people but also by the business organizations in order to take their manufactured articles to their distributors. Again certain companies offer free home deliveries of the products that they sell to their customers and for that also they take the trucks on lease. The autos are also taken on lease as the people require it to move from one place to another. The leasing of the autos is very high as the numbers of these equipments being leased are very popular as not only the owners of the business organizations take it on lease but the common fry also wants them.

One of the main causes of the companies taking the equipments on lease is the rising market. The market is not stable, which might result in the downfall of a business so the stability of the market is required in order to improve the financial position of the companies.

Posted in Uncategorized | Comments Off

An Introspect and Retrospect of Global Home Loans and Finance

Residential properties are investments. Lenders provide the financing whether the case be the homeowner living in it or renting it out. Financing for these properties depend on the lender. The borrower then decides whether he can access the cheapest form that is made available to him.

Global home loans and financing establishments aren’t banks. Like any fiscal industry, they look closely at numbers. The way global home loans and finances review applications is by looking at the borrower’s businesses.

There is an assurance that every applicant will be treated with respect. Just like in a credit card application, global home loans and financing establishments are not allowed to discriminate any applicant.

Each applicant is appreciated and respected. By their approaching the global home loans and financing establishment, the industry is strengthened in a fiscal manner. Each transaction is an opportunity therefore there is the promise to provide the applicants with the urgency and services that they deserve.

These establishments will help you reduce your document loans. It will also assist you clear your borrower’s slates if you had credit problems before.

Borrowers applying for a huge amount of loan are also assisted. Also, those borrowing for construction purposes are prioritized. It is not just for home equitly loans or equity lines of credit.

The good thing about this is that most global home loans offer zero down and 100 percent financing. This helps home buyers to get their dream homes. Their offers are mostly interest only and home refinancing plus loan plans are made available for their clientele.

If the applicant is refinancing a mobile home, global home loans can also assist them. Any home loan program that has no or little down payment can be made available to purchasers who have little or no down payment. Those who have bad credit need not worry because they will also be assisted.

Now these financial institutions comprise the global financial system. These also act internationally, meaning they expand further than their national or regional counterparts.

The financing under these global home institutions are closely checked by the International Monetary Fund, as well as the Bank for International Settlements. In a way, this is a business of global financing, therefore national agencies, government departments, finance ministries, central banks and private institutions are somehow involved.

When talking about how these global home loans and finance started, it must be noted that its history is different from that of the history of money as well as economic history.

It all started in Europe where banks and financiers started a fiscal business that will not only benefit their own institution but also that of their partners. The milestones from this revolutionary idea led to the creation of reputable exchange banks such as The Royal Exchange and the Amsterdam Stock Exchange.

Later on, more notorious international institutions such as the International Monetary Fund, the World Bank and the World Trade Organization were established. All three play a big part in global home loan and financing because they are integral to the financial system.

The International Monetary Fun records all international payments. It also serves as the lender whenever problems occur.

The goal of World Bank is to give funding and take credit risks in return for favorable terms towards fiscal development in not only developed countries but to the developing countries as well.

Finally, the World Trade Organization is the mediator whenever negotiations and trade disputes go awry.

In the long run though, all transactions that are accumulated by global home loans and financing pass through government institutions. They are also actors in the financial system. Banks, exchanges, funds and private players have crucial roles. They are closely intertwined to the banks.

The global home loans establishment may be responsible for approving applications but as money rolls in, the government and international transactions come into play. However, the global financing system has been debated throughout the years because of its need for reformation.

It has been questioned whether the billion mortgage banking industry such as the global home loan is necessary. In fact, the answer is quite obvious. Since it has been successfully implemented and has given various loan transactions, there is no doubt global home loan and financing is crucial to the fiscal industry.

Posted in Uncategorized | Comments Off

So You Think You Are Prepared Financially?

What happens when you are sued for more than your basic homeowners or auto insurance policy covers and are found liable? Well, for most people, it would mean liquidating unprotected assets in order to satisfy the judgment. This may mean garnished wages, selling property, and possibly losing some of your investments. This is certainly a situation that could ruin your life, but there are ways to protect yourself.

A personal umbrella policy is additional coverage that goes above and beyond what your homeowners and auto insurance policies cover. Think of it as a protective umbrella that will pick up the damages once you have exhausted your coverage of those policies.

Your home is likely your most valuable asset-make sure it is properly protected. While insurance agents will help determine the kind of coverage you can buy, it is ultimately your responsibility to know what the policy covers. And remember, insurance agents are salesmen and typically work on commission. This isn’t a bad thing, but be aware of what type of coverage you actually need so that you can spot it when you’re being sold something you don’t truly need.

This is one of the most important things to remember when planning for the “Golden Years” Protect your assets. Also, start thinking of ways to supplement your retirement income.

Lately, I’ve been looking at sources of passive income in order to bolster (and hopefully eventually replace) my current income. It is a fond dream that at some point in the future, I could largely step back from doing active day-to-day work and instead use these sources as my primary income stream. In that eventuality, I could devote my time to volunteer causes and charities I’m passionate about (and maybe have time to sit back and read a book for pleasure on a lazy afternoon every once in a while).

The mere act of owning many investments can be considered a source of passive income. You merely hold the investment and regular dividends are paid out to you. Many people tend to focus on investments in terms of the increase in resale value, but many others quietly hold stocks and bonds that pay large dividends, lining their pockets with capital gains. Look for individual stocks and bonds or index funds that pay good dividends, then sit back and watch the money roll in.

The internet, magazines, and books on personal finance are chock full of calculators and projections to help you figure out “your number” – the usually astronomical sum of money that it is allegedly going to take for you to live off your portfolio of securities, not work, and still maintain some semblance of the same lifestyle you had while you were working.

The exercise seems reasonable – necessary even – but the problem is that the results are almost entirely arbitrary, especially if you are more than 10 years away from retirement.

Any shift in any one of the variables can drastically alter the final figure that pops up, telling you how much you need to have saved in order to retire at X age or how much each year you need to be putting away.

If you have a portfolio you might want to rebalance it every so often. Rebalancing is the act of sitting down once per year and adjusting your portfolio toward your target asset allocation. Let’s say you hold two funds because you want a 50% US stock exposure and 50% International stock exposure. During the last year, it is unlikely the funds have gained and lost exactly the same. So you end the year and US stocks have been up more than International stocks. Your current portfolio weight is 53% US and 47% International.

Posted in Uncategorized | Comments Off

What Newbies Need To Know About Investment Property Financing

Basics for Financing for an Investment Property

You have big dreams of owning real estate and retiring young. You simply don’t have the funds to go out and buy the properties in cash (most of us don’t either). This leads you down the path of financing with your local bank. Maybe you already own your own home and have been through the process of getting approved and signing the mortgage. This should be easy then right? Wrong, investment property loans are not like your traditional home loan.

Lenders are more strict with underwriting an investment property than that of a personal home mortgage. You might be wondering, but why? It’s simple when you own investment property and a personal residence and then you lose your job or things start going south financially you’re going to pay your personal mortgage before anything else in a worst case scenario. You’re not going to want to default on your mortgage, because that’s where you live!

Interest Rate

The interest rate is going to be higher than that of your home mortgage, it just is. Add 1-3 percentage points more than the owner occupied loan rate. That means that if a lender charges 4.00% interest for homeowner loans, you’ll likely pay 5-7% interest for investment loans. That’s just how it works folks. The loans are more risky, so the banks want more for them.

Credit Score

As with any type of loan your credit matters. It shows the bank a history of your previous credit experiences and basically says why you should get a loan or why you shouldn’t get a loan. Working to make sure your credit is top notch is something you need to do far before you get into the real estate game.

With investment property your credit score does not have as big as impact as it does with home mortgages. You will still have options if your credit isn’t perfect. If you score is below 740 you should expect to pay more in interest rate, lender fees, and lower LTV’s. This doesn’t mean you shouldn’t invest with a lower than 740 credit score, it just is stating what you need to expect.

Lower LTV

20% learn it, love it, live it. That’s the number the bank will want from you as a down payment for your investment property purchase. There are of course exceptions to the 20% down, however that’s what most banks are requiring.

20% is a lot of money, right? Yeah I know, but the good news is you will not have to pay mortgage insurance! Nobody likes mortgage insurance. The bad news is, that’s the only good news. Also the 20% down is best case, if you have piss poor credit expect the bank to expect more or not even look at your deal at all. As a final note, plan on needing at least three months’ payments as a liquid cash reserve. Cash reserve is important, yes you may finally have saved that 20%, but if you don’t have more than the 20% in working capital for when the furnace goes out in the first month then the bank will again question giving you a loan.

House Hacking to Get Started

The idea behind house hacking is simply to decrease or minimize your own expenses and use the spread (money you are saving) to invest into acquiring properties to rent out. Living in a nice house with an indoor swimming pool and movie room is great and all, but that house isn’t making you monthly cash flow, it’s costing you monthly cash flow.

The basic idea behind this “house hacking” mentality is to simply rent out part of your home to another person, or co-exist with another person as a roommate in your own home. Also it can mean selling your primary residence now and buying a multifamily property and living in one of the units while renting out the rest. Basically when it is all said and done you are renting what you already live in, to decrease your monthly expense to save capital for your dreams of real estate glory!

If you have yet to buy your first home, or if you want to sell your home now to get into real estate a multi unit property might be the right fit for you. By buying a multifamily home you can live in one of the units and have your tenants pay all of your expenses this is generally more appealing to most people than having someone live in their home.

Posted in Uncategorized | Comments Off

Finance Measures and the Economic Crisis

Various finance measures have been implemented since the beginning of the worldwide economic crisis – most aimed largely at revitalizing dying businesses and corporations hit hardest by the repercussions. Many people have just a fuzzy idea of what the whole fuss is all about, but most of us would agree that the crisis that has exploded has had tremendous influence and effects at almost every level. Listening to the news during the height of the initial stages probably felt a little unreal, as the big, famous corporations once thought to be invincible were all suddenly declaring bankruptcy and loss.

These reports usually involve numbers and sums of money so large as to defy imagination: millions, billions, and even trillions of dollars seemed to be getting thrown around willy-nilly. The truth is, although over the course of a normal day we might not realize it, the functioning of economies and financial systems involve the trading of large and even larger amounts of currency. They only attracted the spotlight and public attention (and perhaps caused confusion) once critical levels were reached, enough for the normally distant economic sphere to intersect with that of daily life. But the first thing to realize is that the movement of such seemingly unreal amounts is, in fact, well within the normal working conditions of the market.

Now, with that out of the way, the next question would probably be what was the cause of the entire crisis anyway? What was that initial mistake or flaw or fall or “first domino” that triggered the whole tragic landslide? This is a difficult question with no simple answer. If you have been somewhat keeping up with the news, terms such as subprime mortgages and collateralized debt obligations might sound familiar. Explaining in detail the various financial constructs and processes that are involved would be a little too much, but essentially, it all boiled down to good old-fashioned greed.

The financial market revolves around the use and investment of so-called capital or money. Investors and the brokers that represent them always aim to maximize their profits while minimizing losses, all the while tolerating some moderate value of risk, depending on the parties involved. As it happened, the economy grew, and investors came to have large amounts of capital. Hence, the demand for investments also grew, especially those with high rates of return. Bankers and other financial institutions gladly created just such investments by transferring the risk on mortgages. Long story short, when the mortgages were not paid off, as they were bound to be, the whole house of cards collapsed, and many firms found themselves grinding to a halt.

The massive injections of capital therefore aim to increase liquidity, or to stimulate once again the movement of money that constitutes a properly functioning economy. These and other such finance measures are unfortunately not surefire ways to deal with the system wide crash. Still, they represent the best efforts of some of our most esteemed economic minds and powerful figures, and we can only wait and hope for the best.

Posted in Uncategorized | Comments Off

Student Finance for Chinese Universities

Chinese universities have recently started to attract a lot of students from abroad. The trend began in the 1950s and recent statistics shows that there were close to 410000 students studying in China as at end of the last decade. There were students from 125 countries and regions. There are undergraduates, postgraduates, doctoral students, trainees, scholars, and students pursuing research coming to China. China is one of the attractive education hubs. Infact, statistics shows that China was the 10th most popular destination for US students going abroad and third most popular non-western nation. However, foreign students cannot be employed in China while at study. Therefore, students must be able to support themselves and arrange for student finance before enrolling in a Chinese university. If you are one of them, how do you go about getting China university student finance? Read on.

Government help to students seeking finance to study in a Chinese University

Good news is that the Chinese government is encouraging its colleges and universities to expand the scholarship amounts and widen the horizon of fellowships and scholarships to foreign students and China university student finance. They are also encouraged to collaborate with private sector and come up with attractive scholarships for outstanding foreign students.

Already the Chinese government has approved finance worth $362 million to around 350,000 students looking to study in Chinese universities since the introduction of subsidized loans since 1999. The extent of subsidy provided by the government is 50% of the interest amount which is paid by the government and the remaining is paid by the students along with the principal.

However the government itself recognizes that the percentage of students who actually got the loan approved stands at 31.2% which is low and the government would like to grow this figure. The main cause for the low percentage is attributed to the fact that the private sector banks are not too keen on providing finance to students who want to study in Chinese universities as the loans are not required to be backed by collateral. Whether loans will be given out or not is determined based on the credit worthiness of the students and the absence of collateral is a deterrent in providing finance. As of now the People’s Bank of China has appointed four main commercial banks to provide finance to Chinese students which are Bank of China, China Construction Bank, the Agricultural Bank of China and Industrial and Commercial Bank of china.

However such finance schemes which look at subsidizing interest repayments are at present only available to Chinese students who are Chinese citizens and have passed the requisite academic examinations

I am not Chinese, can I still get finance to study in a Chinese University or China university student finance?

There are finance programs available to international students who want to study in a Chinese University. One of the popular sources which the students are using today is to go to china by enrolling in an exchange program in a university that offers this option. Normally a host of universities have exchange programs going in which students from their universities visit universities abroad and students from universities abroad come and study in their colleges. These schemes exist not only for students who want to study but also for students interested in internship and working in these countries.

The main requirements of getting finance are credit worthiness, passing the requisite tests and getting through interviews and in some cases having collateral against the loan as well. However in the case of China some universities additionally put up the condition that the students should have a working knowledge of Chinese or Mandarin to be eligible.

There is a growing number of American students who are now interested in studying in China while in the past this was to gain exposure culturally and most of the students were of Chinese origin born in American the trend is changing now. More and more students are coming to China not only to gain cultural knowledge but also advance their careers professionally when they get back home. As a result commercial banks have also designed specialized finance programs with the needs of the students in mind and it is becoming increasingly easy for students to find such loans as China’s Universities are becoming popular as an international destination for further education.

Posted in Uncategorized | Comments Off