Building and Loan News from Topeka, Kansas • 4

BUILDING AND LOAN NEWS. 4 Cost of Loans Compared. The rate of interest is not as important to a borrower as the total actual cost. Shawnee Loan of $1,000. To run five years on the monthly-payment plan.

Contract requires sixty monthly payments of $21.20. Option to pay any amount on the principal ajiy month and privilege to pay the entire amount due any month. Straight Loan of $1,000. To run five years at 7 per cent, interest, interest payable semi-annually. Borrower to have an option to pay $100 annually on the principal, and privilege to pay the entire amount due at the end of any year.

Actual Cost will be $280. INTEREST PRINCIPAL First year, $70.00 $100.00 Second year, 63.00 100.00 Third year, 56.00 100.00 Fourth year, 49.00 100.00 Fifth year, 42.00 600.00 $280.00 $1000.00 Cost of abstract, insurance and other papers will be the same in both cases. The amount in stock account will be paid back to the borrower at the termination of the loan, or he may apply it as a final payment. Deducting value of stock ($33.56) from the amount of interest paid ($242) really leaves only $208.44 as the actual cost of our loans. him to pay any amount or all of it at any time, and eve', ry payment reduces the interest.

If you need money, or wish to refund your straight loan into a monthly-payment plan, you are invited to call at the Shawnee Building and Loan Association office, 115 West Sixth Street, and talk it over with the Secretary, who will be pleased to explain every detail to your entire satisfaction. ABOUT LOANS. How They Are Made, and How to Pay Back Money Borrowed. The Shawnee Building and Loan Associations definite-contract, monthly-payment, interest-reduction plan for making loans on real-estate security is the most modern, the fairest, the easiest, the quickest and the best plan ever offered to borrowers. A careful, study and a clear understanding of the plan can not fail to convince you that it contains all the desirable features claimed for it.

To procure a loan from the Shawnee, the applicant must first become a member of the Association, because it is strictly a mutual company, and extends its privileges and loans its money only to members. An application for a loan embodies an application for membership and entails no cost or charge. There is no application fee nor membership fee. If the security offered for the loan is considered ample by the examining committee and the Board of Directors, the application is granted; if not considered ample, it is rejected and that is the end of it. No expense to anybody.

Should the application be granted, then the usual papers, such as the note, mortgage, abstract of title and insurance policy (if the property is improved) are required. The cost of making and abstract and examining it up to date, also the cost of insurance and the fee for recording the mortgage, must be paid by the applicant. (This is always the rule with all loan companies.) As soon as the papers are examined, approved, and signed up, the money is ready for the borrower, and he always gets the full amount of the loan from the Shawnee. No interest, premium, or commission is subtracted from it, neither is anything added to the note. For convenience in explaining, we will suppose the amount wanted is $1000.

The note is executed for $1000 and no more; the borrower gets $1000. The contract embodied in the note is to the effect that the borrower shall repay the loan in a certain definite number of equal monthly payments, and he (the borrower) has a choice of ten different amounts. On a $1000 loan, he may elect to repay it in 120 payments of $13.20 each, or he may repay it in twelve payments of $88.40 each. He has the choice of making 12, 24, 36, 48, 60, 72, 84, 96, 108, or 120 payments, thus suiting the amount of each payment to his salary or wages. The amount to be paid each month is written in the contract, and the borrower agrees to make those payments regularly and promptly on a certain day each month He has the privilege, also, of paying more than the agreed monthly amount any time he wishes to do so, and the excess so paid is applied as a partial payment directly on the loan.

When he makes the first monthly payment, if the loan be $1000, he is charged interest on $1000 for thirty days. When he makes the second monthly payment. A Good Thing. The Urbana, 111., News-Herald has this to say about their local building and loan1 association: Many of our citizens appreciate the good to our city of having in our midst a careful and well-managed building association, and the record of the Urbana Home is an institution in which all our citizens feel a just and fully deserved pride. It was organized and began business in 1887, and has steadily increased in popularity and usefulness until now it is regarded as one of the fixtures of the city.

Its management has been careful and liberal. Its by-laws are framed on the basis of equity as well as business. A man who has any energy and a little saving habit in himself and family can in a few years pay for a home, and our Association has been a great helper to this class of people he is charged interest for thirty days, not on $1000, but on the balance due. And so on every month. Note this statement carefully: Interest is charged only on balance due at date of making payments, and all in excess of interest is a payment on the loan.

Every payment reduces the interest, and also reduces the principal. By this method, a man with a $1000 loan paying $13.20 per month pays his interest monthly and enough more on the principal to wipe out the whole debt in 120 payments. If he chooses to pay $15.10 a month, 96 payments will wipe it out. At $18.50 a month it will terminate with 72 payments, and $21.20 will pay it off in 60 months or five years. If it was a straight loan, he would pay interest on $1000 every six months, and probably nothing on the principal until the end of the time for which the loan was to run; then he would owe $1000 ALL AT ONCE.

If it was a Shawnee loan, he would pay interest monthly and something on the principal monthly, all out of the small sum of $13.20. In addition to the privilege of paying extra amounts any time he feels inclined to do so, he also has the further privilege of paying off the whole amount at any time without additional charge or bonus. The Shawnee will make loans in any amount from $100 to $10,000, if the applicant can offer acceptable security and can show that he has an income sufficient to meet the required monthly payments. For a man on a regular salary, this kind of a monthly payment loan will enable him to pay out easily and surely in a definite time, and the interest rate is very little, if any, greater than what he would pay for a straight loan, counting in commissions, etc. For a man in business, this kind of a monthly-payment loan is equally desirable, because it enables him to pay as he goes, and, at the same time, permits The local building and loan association is the poor mans bank, and this is not merely a synonym, but an actuality, for through it he learns one great lesson of life, and that is thrift; again, through it he can become a home-owner, but to the ordinary everyday person un acquainted with finance, he must be taught how, why, and wherefore.

Step-by step he should be shown how his mite laid aside from week to week or month by month may earn for him as-much as the money of the capitalist. Put your savings in the Shawnee..