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Financial Word of the Week: Secured Loan and Collateral

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FWOTW
What is a secured loan?

The word secured brings to mind images of armored trucks and locked vaults. Both can guard cash and valuables, but not a loan.

A secured loan is a loan in which the borrower pledges property (e.g. a car, house or other property) to the lender to act as a source of repayment if the borrower cannot pay back the loan.  The property that is pledged is called collateral.  If you do not make the payments as required on the loan, the lender may sell the collateral to cover the amount owed.  Usually a lender will require security for high dollar loans or when your credit is not good enough.

The opposite of a secured loan is an unsecured loan, which does not require collateral.  A lender may give you an unsecured loan when the borrower’s credit history is strong and the amount loaned is for lesser amounts.  Most credit cards are unsecured loans.

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So what does this mean for me?

Secured loans can help you make large purchases and pay them off over time. If everyone had to save for the full purchase price of a house, most people could not afford to be a homeowner until middle age, if ever. Because of the security provided by collateral, banks can provide lower cost credit options through secured loans. Your first step before borrowing should be to do a financial checkup (stay tuned for next week’s blog post to learn more about that) and figure out if you’re financially ready for that large purchase.

 

Statistics Source: New York Fed Household Credit Quarterly Report

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

 

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Financial Word of the Week: Revolving Credit vs. Installment Loans

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FWOTW

Ever been in a meeting with your banker or a cocktail party conversation where a financial term stumps you? Are you considering buying a house or want to plan for the future, but have no idea where to start? Well, look no further. We’d like to be a resource for you and to make all that financial jargon easier to understand. And by the time you’ve read a few of these, the added bonus will be impressing your friends with your new financial wit!

So now, we bring you the perfect (and easy) way to increase your financial knowledge.

What is the difference between revolving credit and installment loans?

Many forms of debt fall into one of two categories: revolving credit and installment loans. When you borrow money from a bank, you can choose to borrow a certain amount and pay it back in a set number of months (in installments) with an installment loan. Or you can choose revolving credit where you do not have a set end date. Instead, these accounts have a credit limit, which is the most you can borrow. At any time, you can use your credit line up to that maximum amount. As you make your monthly payments, your line becomes available again, if you need to use it. By contrast, an installment loan pays out only once at the beginning of the loan, such as a one-time purchase, and cannot be used again as you pay it down.

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So what does this mean for me?

You have choices when you need to borrow money. Some customers enjoy the flexibility of revolving credit options, like a home equity line of credit (HELOC) or credit card. Others prefer the fixed terms and certainty associated with an installment loan. As we will discuss over the next few weeks, different lending options have different criteria, different benefits and different costs.  The most important thing to remember is that a loan or line of credit should fit your budget. Different accounts have different payment options, allowing you to choose a payment plan that works for you.

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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10 years is longer than you think!

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It’s hard to believe that 10 years ago today, our fearless leader, Mariner Kemper, became CEO of UMB Financial Corporation.

Since then…

  • UMB has had a ten-year total return of 220.3 percent.*
  • Annual revenue has increased by 87.9% in the last decade. It grew from $439.1 million in 2003 to $825.1 million in 2013, a compound annual growth rate of 6.5%.

What else was going on in 2004? This short list puts things in perspective:

  • $1.00 in 2004 had the same buying power as $1.26 has today. Annual inflation over this period was 2.37%.
    dollar_shutterstock_175950137
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  • Gas prices in April 2004 were $1.79/gallon. Today the national average is $3.61/gallon, an increase of 101.7%.
  • The U.S. dollar reached its lowest point against the Euro in November 2004.
    Euro_shutterstock_80010928

In non-financial happenings…

  • Facebook launches facebook-logo
  • “The Lord of the Rings: The Return of the King” wins 11 Academy Awards, a tie for the most ever won by a single film. Lord of the Ring_shutterstock_101043448
  • “Friends” airs last episode (May 6)
  • Google introduces Gmail: the launch is met with skepticism on account of the launch date. (April 1)
  • Ken Jennings wins 74 consecutive games on Jeopardy!
  • Mariner and his wife, Megan had a 4-year-old and an 1-year-old. Now they have a teenager and pre-teen!

Kemper family

UMB looks forward to the next decades of growth under the leadership of Mariner Kemper.

 

*10-year total return calculated from December 31, 2003 to December 31, 2013, according to SNL Financial.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Happy Birthday to Us!

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On this day in history…way back in 2013, our CEO, Mariner Kemper, kicked off the blog with this first post.

So that makes today our blog’s 1st birthday! We wish all our readers could enjoy a piece of this yummy chocolate torte created by Kam at André’s Confiserie Suisse, one of our long-time customers. Instead, we promise to eat an extra slice for you, our reader.

Thanks for joining us on this journey.

BlogBirthday

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Happy Income Tax Day from the Mad Men

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April 15 is finally here! To “celebrate” we want to take a look at what taxes the Mad Men (and women) at SC&P would have paid back in the 1960s…and if they were real people.

Enjoy this retro infographic from our friends at H&R Block.

“TheThe Taxes of Mad Men‡ via H&R Block

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Phishing Alert and “Heartbleed” security issue

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Did “Heartbleed” affect UMB?

“Heartbleed” is a bug that has affected many popular websites and “could have quietly exposed your sensitive account information (such as passwords and credit card numbers) over the past two years,” according to Mashable.com.‡

None of UMB’s computer systems were impacted by the Heartbleed bug.

As soon as these hackers were exposed, UMB took immediate action. We were able to find that none of our banks were vulnerable to this issue. We also added specific, proactive monitoring. Although UMB was not affected by the issue, our customers do need to be cautious since the bug could still harm you through other websites where you saved your card numbers or used the same password you use for online banking.

What action do customers need to take?

  • Change your passwords – If you utilize the same password for your online banking services that you utilize on other sites, we strongly recommend that you change the password for your online banking services immediately, in case your username or password were compromised on another site.
  • As always – use different passwords for all online services which contain personal or financial information.
  • To find out if other password-protected sites you use were compromised, we recommend contacting those website providers directly. They may advise to wait to change your passwords until they have installed the latest fixes to this Heartbleed bug, but the only way to know for sure is to receive information from those specific sites.
  • If you run a website and need advice on how to protect it, we recommend visiting Heartbleed.com.‡

Phishing Alert

phishing scam

Some of our customers may have received text messages yesterday or today that we identified as a phishing attempt. The message states that there has been a security breach and gives a number to call. If you call the number, it will ask you for your credit card number or account information. Do not respond to this request for information.

What you need to know:

  • UMB will NEVER contact you via text, email or phone for the purpose of requesting any kind of personal or bank information.
  • Phishing scams are common. These attacks use e-mail or malicious websites to solicit personal, often financial, information. Attackers may send e-mail seemingly from a reputable credit card company or financial institution that requests account information, often suggesting that there is a problem. When users respond with the requested information, attackers can use it to gain access to the accounts.
  • Check out some more Security FAQs from our security experts.

What you need to do:

  • Never respond to suspicious messages or click on suspicious links.
  • Check with your financial institutions before sharing any type of private or financial information.
  • Remember to use online and mobile banking. Why?
    • Secure (protected by multiple layers of security)
    • Saves time – quick access from any computer anywhere
    • Hinders identity theft – if you check your accounts frequently, potential fraud is discovered early.
  • Already a mobile banking user? Here are some tips:
    • Save UMB’s short code (50106) in your address book as a Contact, so that when you receive a Text/SMS message from us, you will know immediately that UMB has sent you a communication.
    • Make sure you know who has sent you any message – if in doubt, delete it.
    • Never click on any links if you are not sure of the sender.
    • Never send any confidential information to anyone – the bank will never ask you to “go here and fill in this information” or “please send us this information.”
    • The bank will also never ask you to respond with your password unless you are signing into one of our applications.
    • Never respond to a request for your password and alert us immediately should you receive a message requesting your password or any other confidential information at 888-782-4325. You may contact us Monday through Friday, 8 a.m. to 10 p.m. or on Saturday from 8 a.m. to 5 p.m.
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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Scarred by Great Recession, small business owners are still playing it safe

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SmallBusinessOwners

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Website maintenance this weekend

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Our umb.com website will be undergoing maintenance in the early hours of Sunday morning. It will be unavailable from 12:30 a.m. – 5:30 a.m. (CST) on Sunday, February 23. Text and mobile banking will be available at this time. We apologize for the inconvenience.

 

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Construction Cones


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Happy New Year

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Best wishes for a healthy, happy and prosperous 2014!

Happy New Year

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Target Credit/Debit Card Security Breach

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You may have seen the recent news that Target experienced a breach in electronic security‡ with their customers’ debit and credit cards. While UMB has security protocols in place, we ask that you remain vigilant as well. You can use our online or mobile banking options to check balances and transaction history 24/7. If you see any suspicious activity on your account, please contact our customer service associates as soon as possible. That number is 800.821.5184.

Credit card

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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