Banking Explained

Do you have bad credit? Are you trying to find a way to pay for your schooling? Obtaining student loans with bad credit can be difficult if you are talking to your universities financial aid department. Since tuition rates are only going to increase, your loan options will be limited if you have not taken care of your credit rating.

Having poor credit in the past can take a long time to rebuild, but it shouldn’t keep you from receiving an education. Obtaining small personal loans with bad credit can help you pay for your education, even if you have struggled with your credit in the past. Using the money you borrow to pay for your education will provide you with the opportunity to get an education, find a job with a higher paying salary, and pay back the money as soon as possible. The difference between bad credit loans and student loans is that payments are required monthly while you are in school instead of after you graduate or 3-5 years after you complete your education.

Since you are using the money to pay for your tuition, creditors view you as a lower risk from other bad credit borrowers. You actually have a plan to pay back the money and when you graduate, you will have a job that can easily give them back their money plus interest. As long as you can get a job that allows you to repay the loan, you cannot default on the loan. Since the lender is essentially paying for your education, they want to make sure you hold true to your end of the bargain and you pay back the money you borrow. The one option you have is to defer the loan if you bump into credit problems in the future. The downside to deferring your loan is that the lender will increase your interest rates, making it harder to pay off the loan and causing you to be in debt longer.

Technology continues to march forward on Wall Street. It seems as if the markets are now dominated more by machines than by humans. According to some industry pundits, algorithmic trading and high frequency trading now accounts for anywhere between 50% and 80% of all US equity volumes.

This has brought about a whole new set of risks. The potential danger of one of these systems running out of control, going haywire and bombarding the markets with millions of orders per second, is very real and could have disastrous consequences for the world’s financial systems.

There are many types of algorithmic trading systems and strategies used by proprietary trading firms. Some systems “scrub” news stories to look for news and events that might move a particular stock. Other systems are “non-directional”, looking for price discrepancies and capitalising on their speed of execution to arbitrage those opportunities.

What is getting some people worried is the speed at which these systems can generate and execute orders, and the volume of throughput they can handle. Orders can now be generated, sent to an exchange, executed and reported back in less than a millisecond (a thousandth of a second). And multi-processing, high-throughput parallel processing technology allows for millions of such orders to flow through the exchanges systems.

But just because the technology allows high frequency trading to take place, doesn’t mean that all the controls are necessarily in place to prevent errors occurring. With increased speed and increased throughput comes increased risk. It is this risk that the regulators are now trying to get their heads around.

What happens if one of the machines does go haywire? And is the integrity of the markets threatened by the fact that only the biggest players have the fastest technology? Are those big players “fleecing” smaller investors?

The regulators have a tough job ahead. Only time will tell whether they are able to introduce controls that benefit all.

When it comes time to move your funds from your existing retirement account, the transfer can be rather overwhelming. The best way to overcome your fear of the transaction is by educating yourself to the various options you have available to do the transfer. There are a number of ways to facilitate your 401k rollover. It is usually just a matter of matching your needs with the appropriate vessel.

The 401k rollover option that many people do not realize is not available to them is the 401k rollover to Roth Individual Retirement Arrangement. This method of transferring your funds now allows you to transfer directly into a Roth IRA. Up until the last couple of years, this was previously impossible. If you wanted your funds to end up in a Roth, it generally required a number of tedious and complicated transfers between different retirement accounts.

Similar to a Roth rollover is the rollover to a Traditional IRA account. This option allows you transfer your funds directly into a traditional IRA account. This rollover is fairly straightforward as the two retirement account types behave quite similarly. IRA accounts tend to offer a wider range of flexibility upon retirement however.

Another option for your retirement funds it to transfer them into another 401k account. This allows you to continue in a vessel that you are familiar with. The transfer is usually just a matter of coordinating between the two account managers and making the change. For those that are simply changing jobs, this may be a good option for your transfer.

Another option for you funds is to simply withdraw the money from the account. If you are not of sufficient retirement age, this may have adverse tax consequences however. You will want to be aware of any tax responsibility or early withdrawal penalties that may be associated with the transfer out of the account.