subscriptionsFrom bacon- and stationery-of-the-month clubs to gym memberships and credit monitoring services, automatically renewed subscriptions that may start out as a free trial can easily end up as automatic renewals that bleed your bank account.

You don't notice your money slowly dripping away, and you could be forced to pay overdraft fees if your bank account balance drops to zero. Or you're stuck with charges on a credit card bill that you rarely look at for services you don't use.

The easiest solution is to monitor your bank and credit card statements, and to cancel subscriptions you no longer use. But that habit isn't common among millennials, says David Callis, co-founder and CEO of Hiatus, a new app that cancels auto-renewed subscriptions for free.

"A lot of times people aren't paying much attention to it," Callis said in a phone interview about reviewing credit card bills.

The average consumer wastes more than $500 per year in subscriptions and services they don't want because they forget or don't get around to cancelling, according to Hiatus.

In a survey it did this year, the company found that almost two-thirds of consumers paid for unwanted subscriptions because they didn't cancel the auto-renewal feature. It found that most people forgot about it, but 20 percent said it was too much of a hassle to cancel. ...continue reading

student loanWells Fargo was cited $4 million Monday for illegal private student loan servicing practices that cost student borrowers more money in fees, leading to a host of solutions the bank must implement to improve its practices.

Most of the money to be paid by Wells Fargo through the order by the Consumer Financial Protection Bureau goes to the CFPB with a $3.6 million penalty. The bank must provide $410,000 in relief to borrowers.

The federal agency found that the bank failed to provide important payment information to consumers, charged illegal fees, and failed to update inaccurate credit report information.

How Wells Fargo erred

The consent order includes a number of things Wells Fargo must do, starting with providing at least $410,000 to compensate consumers for illegal late fees.

To get their refund for such fees, students shouldn't have to do anything. The refunds include payments for the bank failing to disclose its payment allocation practices across multiple loans in a borrower's account, as well as for not informing consumers that they could instruct the bank to allocate payments in a different way.

Refunds will also happen for illegal fees that were charged because the bank didn't combine partial payments made in the same billing cycle, and for fees improperly charged when borrowers made a payment on the last day of the grace period.

Misinformation on partial payments

As any borrower can do with a loan, a partial payment can be made — though they'll likely have to pay a late fee. Still, a partial payment will help a borrower avoid some interest charges, and is better than no payment at all.

For students with multiple loans from a bank, a partial payment can satisfy at least one loan payment in an account, meaning they'd be late for other loans but not the one where the partial payment was made. ...continue reading

dollar-1362244_640Many of us need a bit of a helping hand with our finances at some point or another, normally when something happens to rock the boat, like an unexpected repair that has to be paid before you next get paid.

A popular reaction to this sort of scenario is to see whether someone like MoneyBoat might be able to provide a short-term loan. The question that you should ask about this quick-cash solution, is whether it is the right course of action for you in particular?

Understanding the benefits of a short-term loan

The most obvious benefit of taking out a short-term loan, is the ability to get your hands on the cash you need within a matter of few hours in some cases.

Once your application has been approved and the terms of your loan agreed, it is often the case that the lender will arrange to make a faster payment to your bank account on the same day that your loan is approved.

Some lenders who provide these short-term loans will agree to let someone who does not have a good credit rating to borrow a small amount of money, but the interest rate will reflect this level of risk.

If you need cash in a hurry and perhaps don’t have too many options to borrow from other sources, a short-term loan can be a viable solution, provided you understand the need to repay the money on time and within a short space of time.

Cost of borrowing

Short-term loans are very much a “does what it says on the tin” sort of product.

It is a product that is designed to provide a source of funds to borrowers who need the money in a hurry and don’t have many other options to consider. The most obvious point to keep in the forefront of your mind when you are considering an application for a loan, is the cost.

If you were to apply for a conventional loan that was to be repaid over a 24 month period for example, you would expect to find a rate that was above the bank base rate by a reasonable margin, but nowhere near as expensive when compared to a short-term loan.

That is the point. A short-term loan is meant to be repaid quickly and the interest rate you are being charged reflects the risk to the lender and the urgency of your need for funds.

Repair your credit score

There is another aspect of short-term borrowing that is worth mentioning, as it can make a difference to your borrowing options in the future.

If your credit score is a bit damaged for whatever reason, a short-term loan does potentially give you the opportunity to demonstrate your ability to repay a debt on time, which should give a boost to your credit score.

Lenders are understandably wary of anyone who applies for a loan that has a history of late or non-payment on their file. By using a short-term loan responsibly and repaying the amount borrowed in a timely manner, there is a chance that lenders will view you more favourably in the future.

Considering your options

As with any form of borrowing, it is always wise to consider all of your available options before making your final decision.

A short-term loan can be viewed as an emergency funding option, especially when you need the money in a hurry, but it still makes a lot of sense to at least take a moment to take stock of your financial situation and consider what borrowing options are available to you and how viable they are in the circumstances.

Every form of borrowing has a cost attached to it, so if you have the option and the time to maybe sell a few unwanted items to raise the cash you need or do some extra paid work for example, these would obviously be good alternatives, as you will be able to raise the money you need without incurring any borrowing charges.

If you decide that a short-term loan is the right option for you, make sure that you have the means to repay the loan on the agreed date. Some of the bad press attached to some loan products is associated with additional fees for late and non-payment of the amount due, which then escalates the size of the loan and makes matters worse.

Provided you use a short-term loan prudently and keep to your agreed payments, it may well be that it is a viable option to meet your immediate financial needs.

Nicholas Krauspe is the Head of Operations at, a London based alternative finance company providing unsecured consumer credit to residents of the UK. Nicholas has over 10 years of operations and management experience in the consumer finance sector.