When you face an unexpected expense, a payday loan may seem like the ideal solution. Applying is quick and easy, and you can get the money you need in just a few hours. But before you take out a payday loan, be sure to read the fine print. Payday loans come with very high APRs, and if you can’t pay them back on time, you’ll end up paying even more fees and interest. So, is a personal loan really worth it?

What are payday loans and how do they work?

A payday loan is a short-term, high-interest loan that is usually due on your next payday. The idea is that you will use the money you borrow to cover unexpected expenses or to tide you over until your next paycheck arrives. Payday loans are also sometimes called cash advance loans or check loans.

Orville L. Bennett of Ipass.Net explains how they work: Let’s say you need to borrow $300 for an emergency expense. You write a post-dated check for $345 (the loan amount plus fees and interest) and date it for your next payday. The lender keeps the check and cashes it on the date you specify, usually two weeks later. If you don’t have enough money in your account to cover the check, you’ll be charged an NSF check fee.

Payday loans are usually due in full on your next payday, but some lenders will let you extend the loan if you can’t afford to pay it off all at once. Just be aware that interest rates and fees will continue to accrue until the loan is paid off.

Ipass identifies payday loans as a loan which can be a useful tool in times of financial emergency, but they should only be used as a last resort. Make sure you fully understand the terms and conditions before applying and be ready to repay the loan as soon as possible. Otherwise, you could end up paying a lot more interest and fees than you originally borrowed.

If you’re looking for an alternative to payday loans, consider online personal loans. Personal loans are a great way to consolidate debt, finance major purchases or cover unexpected expenses.

And unlike payday loans, personal loans come with fixed interest rates and payments, so you’ll always know how much you’ll have to pay each month. Plus, you can usually get a personal loan with bad credit. So if you’re struggling to qualify for a traditional bank loan, an online personal loan might be the perfect solution.

The risks associated with payday loans.

As with any type of loan, there are risks associated with payday loans. Here are some things to watch out for:

– Payday loans come with very high APRs, and if you can’t pay them back on time, you’ll end up paying even more fees and interest.

– If you can’t repay the loan on time, you could end up with costly NSF fees.

– Payday loans can hurt your credit score if you miss payments or fail to repay the loan.

– Payday lenders may try to aggressively collect debts from borrowers, which could lead to harassment and even legal action.

So before taking out a payday loan, make sure you weigh the pros and cons. If you can’t afford to repay the loan in full on your next payday, it’s probably not a good idea to borrow the money. There are other options available, so be sure to explore all of your options before deciding on a payday loan.

If you’re considering taking out a payday loan, be sure to check out our guide to the best payday loans first. We’ll help you find a lender who offers fair interest rates and reasonable repayment terms.

Payday loans aren’t for everyone, but if you need cash fast and have no other options, they can be a helpful way to get through a tough financial situation.

How to avoid high APRs when taking out a personal loan?

When looking for a payday loan, it’s important to compare interest rates and fees from different lenders. Here are a few tips :

– Compare the APRs of different lenders. Payday loans with lower APRs will cost you less interest and fees over the life of the loan.

– Avoid lenders that charge application or origination fees. These fees can add up quickly, so it’s important to find a lender that doesn’t charge them.

– Look for lenders who offer flexible repayment terms. If you can’t afford to repay the loan on your next payday, be sure to inquire about extending the repayment term. Just be aware that this will increase the overall amount of interest you pay.

– Do not accept any loan before having carefully read the terms and conditions. Payday loans can be expensive, so it’s important to know exactly what you’re getting into before signing anything.

If you take these steps, you’ll have a much better chance of finding a payday loan with reasonable interest rates and fees. Remember to always research the best deal before applying for a payday loan. High APRs can quickly drain your bank account, so it’s important to find a lender that offers fair rates and reasonable repayment terms.

Alternatives to payday loans for people who need money fast.

If you need money fast and don’t want to take out a payday loan, there are other options available to you. Here are some alternatives to consider:

– Personal loans: Personal loans generally have lower interest rates than payday loans, so they can be a cheaper option in the long run. And unlike payday loans, personal loans come with fixed interest rates and monthly payments, so you’ll always know how much you’ll have to pay each month.

– Credit Cards: If you have good credit, you may qualify for a low-interest credit card. You can use your credit card to cover unexpected expenses or consolidate debt. Just make sure you make your payments on time and keep your balance under control to avoid high interest rates.

– Payday loan alternatives: There are a number of payday loan alternatives available, including installment loans, cash advance loans, and lines of credit. These options typically have lower interest rates than traditional payday loans, so they can be a cheaper option in the long run.

Before deciding on a payday loan, be sure to explore all of your options. Payday loans can be expensive, so it’s important to find the cheapest way to borrow money. Personal loans, credit cards, and payday loan alternatives are all viable options for people in need of quick cash. Just be sure to compare interest rates and fees before applying for a loan.

Thanks for reading! We hope this article has helped you understand the truth about payday loans and the high APRs associated with them. Payday loans can be expensive, so it’s important to explore all of your options before deciding on one.

Remember that personal loans, credit cards, and payday loan alternatives are all viable options for people who need cash fast. Just be sure to compare interest rates and fees before applying for a loan and research reliable and knowledgeable lenders such as Ipass.Net.

Management's discussion and analysis ("MD&A") of financial condition and results
of operations is provided as a supplement to and should be read in conjunction
with the unaudited condensed consolidated financial statements and related notes
to enhance the understanding of our results of operations, financial condition
and cash flows. This MD&A contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements that involve expectations, plans or
intentions (such as those relating to future business, future results of
operations or financial condition, including with respect to the anticipated
effects of COVID-19 and related government actions). You can identify these
forward-looking statements by words such as "may," "will," "would," "should,"
"could," "expect," "anticipate," "believe," "estimate," "intend," "plan" and
other similar expressions. These forward-looking statements involve risks and
uncertainties that could cause our actual results to differ materially from
those expressed or implied in our forward-looking statements. This MD&A should
be read in conjunction with the MD&A included in our Annual Report on Form 10-K
for the fiscal year ended October 31, 2021, as filed with the SEC on January 12,
2022 (the "2021 Form 10-K"). References in this document to "Volt," "Company,"
"we," "us" and "our" mean Volt Information Sciences, Inc. and our consolidated
subsidiaries, unless the context requires otherwise. The statements below should
also be read in conjunction with the description of the risks and uncertainties
set forth from time to time in our reports and other filings made with the SEC,
including under Part I, "Item 1A. Risk Factors" of the 2021 Form 10-K and Part
II, "Item 1A. Risk Factors" of this report. We do not intend, and undertake no
obligation except as required by law, to update any of our forward-looking
statements after the date of this report to reflect actual results or future
events or circumstances. Given these risks and uncertainties, readers are
cautioned not to place undue reliance on such forward-looking statements.

Note regarding the use of non-GAAP financial measures

We have provided certain Non-GAAP financial information, which includes
adjustments for special items and certain line items on a constant currency
basis, as additional information for segment revenue, our consolidated net
income (loss) and segment operating income (loss). These measures are not in
accordance with, or an alternative for, measures prepared in accordance with
generally accepted accounting principles ("GAAP") and may be different from
Non-GAAP measures reported by other companies. Our Non-GAAP measures are
generally presented on a constant currency basis, and exclude (i) the impact of
businesses sold or exited, (ii) the impact from the migration of certain clients
from a traditional staffing model to a managed service model ("MSP transitions")
as we believe that the difference in revenue recognition accounting under each
model of the MSP transitions could be misleading on a comparative period basis
and (iii) the elimination of special items. Special items generally include
impairments, restructuring and severance costs, as well as certain income or
expenses which the Company does not consider indicative of the current and
future period performance. We believe that the use of Non-GAAP measures provides
useful information to management and investors regarding certain financial and
business trends relating to our financial condition and results of operations
because they permit evaluation of the results of operations without the effect
of currency fluctuations or special items that management believes make it more
difficult to understand and evaluate our results of operations.

segments

Our reportable segments are (i) North American Staffing, (ii) International
Staffing and (iii) North American MSP. All other business activities that do not
meet the criteria to be reportable segments are aggregated with corporate
services under the category Corporate and Other. Our reportable segments have
been determined in accordance with our internal management structure, which is
based on operating activities. We evaluate business performance based upon
several metrics, primarily using revenue and segment operating income as the
primary financial measures. We believe segment operating income provides
management and investors a measure to analyze operating performance of each
business segment against historical and competitors' data, although historical
results, including operating income, may not be indicative of future results as
operating income is highly contingent on many factors including the state of the
economy, competitive conditions and customer preferences.

We allocate all support-related costs to the operating segments except for costs
not directly relating to our operating activities such as corporate-wide general
and administrative costs. These costs are not allocated to individual operating
segments because we believe that doing so would not enhance the understanding of
segment operating performance and such costs are not used by management to
measure segment performance.

We report our segment information in accordance with the provisions of the
Financial Accounting Standards Board ("FASB") Accounting Standards Codification
280, Segment Reporting ("ASC 280"), aligning with the way the Company evaluates
its business performance and manages its operations.

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Overview

We are a global provider of staffing services (traditional time and
materials-based as well as project-based). Our staffing services consist of
workforce solutions that include providing contingent workers, personnel
recruitment services and managed staffing services programs supporting primarily
administrative and light industrial (commercial) as well as technical,
information technology and engineering (professional) positions. Our managed
service programs ("MSP") involves managing the procurement and on-boarding of
contingent workers from multiple providers.

We operate in approximately 65 of our own locations and have an on-site presence
in over 60 customer locations. Approximately 88% of our revenue is generated in
the United States. Our principal international markets include Europe, Asia
Pacific and Canada locations. The industry is highly fragmented and very
competitive in all of the markets we serve.

Environmental, Social and Governance (“ESG”) Matters

The Company recognizes the importance of ESG matters, with a specific focus on
Human Capital Management, as integral to creating a sustainable foundation for
our long-term business strategy. While the Nominating and Corporate Governance
Committee of the Board of Directors holds primary responsibility for ESG
oversight and guidance, our entire Board of Directors, composed of independent
directors, is fully engaged in these efforts.

Human capital management

Volt operates on the fundamental philosophy that people are our most valuable
asset as every person who works for us has the potential to impact our success
as well as the success of our clients. As a staffing company, identifying
quality talent is at the core of everything we do and our success is dependent
upon our ability to attract, develop and retain highly qualified employees, both
in-house and for our clients. The Company's core values of integrity, customer
centric, ownership, innovation, empowerment, collaborative change and teamwork
establish the foundation on which the culture is built and represent the key
expectations we have of our employees. We believe our culture and commitment to
our employees attract and retain our qualified talent, while simultaneously
providing significant value to our Company and its shareholders.

Demography

As of January 30, 2022, we employed approximately 14,600 people, including
approximately 13,500 who were on contingent staffing assignments with our
clients, and the remainder as full-time in-house employees. Approximately 70% of
the full-time in-house employees are located in North America and the remaining
are within Asia Pacific and Europe. The workers on contingent staffing
assignments are on our payroll for the length of their assignment with the
client.

Diversity and Inclusion

Volt values building diverse teams, embracing different perspectives and
fostering an inclusive, empowering work environment for our employees and
clients. We have a long-standing commitment to equal employment opportunity as
evidenced by the Company's Equal Employment Opportunity policy. Of our North
American in-house employee population, approximately 71% are women and
approximately 48% have self-identified as Hispanic or Latino, Native American,
Pacific Islander, Asian, Black or African American, or of two or more races. As
part of Volt's commitment to continued enhancements in this area, we launched
our Expert Momentum Diversity and Inclusion Program. This program involved the
creation of a task force made up of a group of employees from across the
organization. The program has established initiatives to strengthen the
promotion of workplace diversity for our employees and clients, to create a
collaborative environment that promotes authenticity and a culture that
celebrates our differences, and embraces a collaborative environment with unique
experiences and diverse perspectives. The program's task force will enhance
company-wide engagement on diversity and inclusion, provide education
opportunities for our employees, help identify areas for improvement and monitor
progress against these initiatives.

Benefits and Compensation

Critical to our success is identifying, recruiting, retaining, and incentivizing
our existing and future employees. We strive to attract and retain the most
talented employees in the staffing industry by offering competitive compensation
and benefits. Our pay-for-performance compensation philosophy is based on
rewarding each employee's individual contributions and striving to achieve equal
pay for equal work regardless of gender, race or ethnicity. We use a combination
of fixed and variable pay including base salary, bonus, commissions and merit
increases which vary across the business. In addition, as part of our long-term
incentive plan for executives and certain employees, we provide share-based
compensation to foster our pay-for-performance culture and to attract, retain
and motivate our key leaders.

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As the success of our business is fundamentally connected to the well-being of
our people, we offer benefits that support their physical, financial and
emotional well-being. We provide our employees with access to flexible and
convenient medical programs intended to meet their needs and the needs of their
families. In addition to standard medical coverage, we offer eligible employees
dental and vision coverage, health savings and flexible spending accounts, paid
time off, employee assistance programs, voluntary short-term and long-term
disability insurance and term life insurance. Additionally, we offer a 401(k)
Savings Plan and Deferred Compensation Plan to certain employees. Our benefits
vary by location and are designed to meet or exceed local laws and to be
competitive in the marketplace.

In response to the COVID-19 pandemic, government legislation and key
authorities, we implemented changes that we determined were in the best interest
of our employees, as well as the communities in which we operate. This included
having the majority of our employees work from home for several months, while
implementing additional safety measures for employees continuing critical
on-site work. We continue to embrace a flexible working arrangement for a
majority of our in-house employees, as well as a portion of our contingent
workforce where we continue to provide key services to customers remotely.

Professional development and training

We believe a key factor in employee retention is training and professional
development for our talent. We have training programs across all levels of the
Company to meet the needs of various roles, specialized skill sets and
departments across the Company. All field associates receive Volt's General
Safety Orientation prior to assignment and site-specific job task training from
our clients. Volt offers the Federal Ten Hour and other specialty safety
programs to key employees and clients as a value-add feature of our services.
Volt is committed to the security and confidentiality of our employees' personal
information and employs software tools and periodic employee training programs
to promote security and information protection at all levels. Additionally, in
the second quarter of fiscal 2021, we invested in an online educational platform
to upskill our field associates across North America. This platform provides
significant benefit and support to our employees in furthering their education
and achieving their personal and professional goals, while at the same time
cultivating a better-skilled pool of talent for our clients.

We utilize certain employee turnover rates and productivity metrics in assessing
our employee programs to ensure that they are structured to instill high levels
of in-house employee tenure, low levels of voluntary turnover and the
optimization of productivity and performance across our entire workforce.
Additionally, we have implemented a new performance evaluation program which
adopts a modern approach to valuing and strengthening individual performance
through on-going interactive progress assessments related to established goals
and objectives.

Communication and Engagement

We strongly believe that Volt's success depends on employees understanding how
their work contributes to the Company's overall strategy. To this end, we
communicate with our workforce through a variety of channels and encourage open
and direct communication, including: (i) quarterly company-wide CEO update
calls; (ii) regular company-wide calls with executives; (iii) frequent corporate
email communications; and (iv) employee engagement surveys.

Commitment to Values ​​and Ethics through Governance

Along with our core values, we act in accordance with our Code of Business
Conduct and Ethics ("Code of Conduct"), which sets forth expectations and
guidance for employees to make appropriate decisions. Our Code of Conduct covers
topics such as anti-corruption, discrimination, harassment, privacy, appropriate
use of company assets, protecting confidential information and reporting Code of
Conduct violations. The Code of Conduct reflects our commitment to operating in
a fair, honest, responsible and ethical manner and also provides direction for
reporting complaints in the event of alleged violations of our policies
(including through an anonymous hotline). Our executive officers and supervisors
maintain "open door" policies and any form of retaliation is strictly
prohibited. We take all reports of suspected violations of the Code of Conduct
and unethical behavior seriously and will take appropriate actions to correct
the situation.

Environmental

As a global provider of staffing services, Volt does not produce or manufacture
any products or materials and therefore our environmental impact has been
relatively small. Nevertheless, we understand that certain areas of our business
and operations have an impact on the environment and we are dedicated to
promoting internal sustainability initiatives and keeping our ecological
footprint to a minimum. In addition to certain on-going internal initiatives,
including office waste reduction practices such as printing less and recycling
furniture and electronics, we were able to take advantage of more impactful
opportunities using actions implemented during the COVID-19 pandemic. During
fiscal 2020, we were able to quickly shift to a fully remote in-house workforce
and we continue to have the majority of our in-house employees work remotely
thereby reducing the environmental impact of commuting and office energy
consumption. This work model has allowed us to further decrease our carbon
footprint by exiting and consolidating certain
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offices. We have also been able to reduce certain business travel by using
virtual and collaborative tools whenever possible, further limiting our
ecological impact. Volt is committed to enhancing its environmental protection
measures and continuing to promote an eco-friendly culture both internally and
in the communities it serves.

COVID-19 and Our Response

The global spread of the COVID-19 pandemic created significant volatility,
uncertainty and global macroeconomic disruption. Our business experienced
significant changes in revenue trends at the mid-point of our second quarter of
fiscal 2020 through the beginning of our third quarter of fiscal 2020, as a
number of countries and U.S. federal, state and local governments issued varying
levels of stay-at-home orders and other restrictions and mandates. Our business
was largely converted to a remote in-house workforce and remained open as we
provided key services to essential businesses, both remotely and onsite at our
customers' locations. Beginning in the second half of fiscal 2020, revenue
steadily increased as a result of a combination of existing customers returning
to work, expanding business with existing customers and winning new customers.

We continue to operate on a hybrid-model with certain locations fully staffed
and others opening on a limited voluntary basis. Our COVID-19 Incident Response
Team continues to monitor the most up-to-date developments and safety standards
from the Centers for Disease Control and Prevention, World Health Organization,
Occupational Safety and Health Administration and other key authorities to
determine an appropriate response for our employees and clients. While this team
is continuing to monitor COVID-19 developments globally, we remain focused on
the regulations and vaccine requirements in the U.S. to ensure we are complying
with all relevant regulations. We are also monitoring developments related to
vaccine mandates from certain customers.

We expect the global business environment will continue to operate in various
stages of economic turbulence. We are encouraged by the increase in order
activity and demand throughout the Company, however, the pace of such increase
may be impacted if a resurgence in COVID-19 infections leads to additional
disruptions, government mandates or increased lack of available talent to match
our customers' demands.

For additional discussion of the uncertainties and business risks associated with COVID-19, see Part I, “Item 1A. Risk Factors” of the 2021 Form 10-K.

Critical Accounting Estimates

Casualty Insurance Program

We purchase workers' compensation insurance through mandated participation in
certain state funds and the experience-rated premiums in these state plans
relieve us of any additional liability. Liability for workers' compensation in
all other states as well as automobile and general liability is insured under a
paid loss deductible casualty insurance program for losses exceeding specified
deductible levels and we are financially responsible for losses below the
specified deductible limits. The casualty program is secured by a letter of
credit against our financing arrangement ("DZ Financing Program") with DZ Bank
AG Deutsche Zentral-Genossenschaftsbank ("DZ Bank") of $20.9 million as of
January 30, 2022.

We recognize expenses and establish accruals for amounts estimated to be
incurred, both reported and not yet reported, policy premiums and related legal
and other claims administration costs. We develop estimates for claims as well
as claims incurred but not yet reported using actuarial principles and
assumptions based on historical and projected claim incidence patterns, claim
size and the length of time over which payments are expected to be made.
Actuarial estimates are updated as loss experience develops, additional claims
are reported or settled and new information becomes available. Any changes in
estimates are reflected in operating results in the period in which the
estimates are changed. Depending on the policy year, adjustments to final
expected paid amounts are determined through the ultimate life of the claim. At
January 30, 2022 and October 31, 2021, the casualty insurance liability was
$14.2 million and $13.9 million, respectively.

RECENT DEVELOPMENTS

On February 4, 2022, we reported that our Chief Financial Officer, Herbert
Mueller, is currently unable to perform his duties due to a medical illness and
will temporarily step away from his role as Chief Financial Officer. In Mr.
Mueller's absence, the Company's former Chief Financial Officer, Paul Tomkins,
will serve as Interim Chief Financial Officer, effective February 4, 2022, and
will assume the day-to-day responsibilities of such role until further notice.

The Company and Vega Consulting, Inc. ("Vega"), an affiliate of ACS Solutions, a
global provider of information technology solutions and services, announced on
March 14, 2022, that Volt and Vega entered into a definitive merger agreement
under which Volt will be acquired for $6.00 per share in cash. This per share
purchase price represents a premium of 99% to the Company's closing stock price
on March 11, 2022. Vega will commence a tender offer no later than March 25,
2022, to acquire all outstanding shares of Volt for $6.00 per share in cash. The
merger agreement was approved by Volt's board of directors, which recommends
that Volt stockholders tender their shares in the tender offer. Additional
information related to the Merger Agreement can be found within the Form 8-K
filed by the Company on March 14, 2022.
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Consolidated results by segment

Three months completed January 30, 2022

                                                    North American          International             North            Corporate and
(in thousands)                      Total              Staffing               Staffing             American MSP            Other              Eliminations
Net revenue                      $ 226,928          $   191,196          $         26,018          $   9,709          $         78          $         (73)
Cost of services                   191,835              163,145                    20,800              7,921                    42                    (73)
Gross margin                        35,093               28,051                     5,218              1,788                    36                      -

Selling, administrative and
other operating costs               34,976               21,409                     4,280                815                 8,472                      -
Restructuring and severance
costs                                  591                   67                        70                  -                   454                      -
Impairment charge                       23                    -                         -                  -                    23                      -
Operating income (loss)               (497)               6,575                       868                973                (8,913)                     -
Other income (expense), net           (569)
Income tax provision                   153
Net loss                         $  (1,219)


                                                                           

Three months completed January 31, 2021

                                                    North American          International             North            Corporate and
(in thousands)                      Total              Staffing               Staffing             American MSP            Other              Eliminations
Net revenue                      $ 217,958          $   184,216          $         24,013          $   9,669          $        119          $         (59)
Cost of services                   185,276              157,636                    19,851              7,784                    64                    (59)
Gross margin                        32,682               26,580                     4,162              1,885                    55                      -

Selling, administrative and
other operating costs               33,747               20,646                     3,788              1,353                 7,960                      -
Restructuring and severance
costs                                  632                 (241)                       (8)                 -                   881                      -
Impairment charge                       31                    -                         -                  -                    31                      -
Operating income (loss)             (1,728)               6,175                       382                532                (8,817)                     -
Other income (expense), net           (391)
Income tax provision                   327
Net loss                         $  (2,446)

Consolidated operating results (Q1 2022 vs. Q1 2021)

Net revenue in the first quarter of fiscal 2022 increased $8.9 million, or 4.1%,
to $226.9 million from $218.0 million in the first quarter of fiscal 2021. The
net revenue increase was primarily due to an increase in our North American
Staffing segment of $7.0 million and an increase in our International Staffing
segment of $2.0 million. Excluding the negative impact of foreign currency
fluctuations of $0.8 million, net revenue increased $9.8 million, or 4.5%.

Operating results in the first quarter of fiscal 2022 improved $1.2 million, to
an operating loss of $0.5 million from $1.7 million in the first quarter of
fiscal 2021. Excluding the restructuring and severance costs and impairment
charges, operating results improved $1.2 million to operating income of
$0.1 million. This increase in operating results of $1.2 million was primarily
the result of improvements in our North American Staffing segment of $0.7
million, our International Staffing segment of $0.6 million and our North
American MSP segment of $0.4 million, partially offset by a $0.5 million
increase in operating loss in the Corporate and Other category.

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Operating results by segment (Q1 2022 vs. Q1 2021)

Net revenue

The North American Staffing segment revenue in the first quarter of fiscal 2022
increased $7.0 million, or 3.8%, to $191.2 million from $184.2 million in the
first quarter of fiscal 2021. The increase is attributable to new business wins
in a combination of retail and mid-market clients, combined with the expansion
of business within existing clients and improvements in direct hire revenue.

The International Staffing segment revenue in the first quarter of fiscal 2022
increased $2.0 million, or 8.3%, to $26.0 million from $24.0 million in the
first quarter of fiscal 2021, primarily due to increased direct hire revenue in
the United Kingdom and Singapore, as well as increases in other staffing
business in France, Belgium and the United Kingdom. Excluding the negative
impact of foreign exchange rate fluctuations of $0.8 million, revenue increased
$2.8 million, or 12.3%.

Revenues from the North American MSP segment in the first quarter of fiscal 2022 were flat compared to the first quarter of fiscal 2021. The slight improvement was mainly due to increased demand in its payroll services business , partially offset by a decline in its managed services business.

Cost of services in the first quarter of fiscal 2022 increased $6.5 million, or
3.5%, to $191.8 million from $185.3 million in the first quarter of fiscal 2021.
This increase is primarily due to a $5.5 million increase in our North American
Staffing segment related to the 3.8% increase in revenue and slightly
unfavorable workers' compensation development in the current period partially
offset by an increase of $0.3 million in government wage subsidies. In addition,
our International Staffing segment increased $0.9 million primarily as a result
of the 8.3% increase in revenue.

Gross margin as a percent of revenue in the first quarter of fiscal 2022
increased to 15.5% from 15.0% in the first quarter of fiscal 2021. Our North
American Staffing segment gross margin as a percent of revenue increased
primarily due to a mix of higher margin business, partially offset by slightly
unfavorable workers' compensation development in the current quarter. Our
International Staffing segment gross margin as a percent of revenue primarily
increased due to an increase in direct hire revenue. Our North American MSP
segment gross margin as a percent of revenue decreased primarily due to the mix
of business. Government wage subsidies accounted for 40 basis points of the
increase in the first quarter of fiscal 2022 compared to 30 basis points in the
first quarter of fiscal 2021.

Selling, administrative and other operating expenses

Selling, administrative and other operating costs in the first quarter of fiscal
2022 increased $1.3 million, or 3.6%, to $35.0 million from $33.7 million in the
first quarter of fiscal 2021. The increase was primarily due to $0.7 million in
labor as a result of changes in headcount and $0.5 million in equity
compensation, partially offset by an increase in government wage subsidies of
$1.4 million. In addition, there was an increase in professional fees of
$0.8 million and depreciation expense of $0.3 million. As a percent of revenue,
selling, administrative and other operating costs were 15.4% and 15.5% in the
first quarter of fiscal 2022 and 2021, respectively.

Restructuring and redundancy costs

Restructuring and severance costs remained consistent at $0.6 million in both
the first quarter of fiscal 2022 and 2021. Restructuring and severance costs in
the first quarter of fiscal 2022 were primarily due to $0.5 million in ongoing
costs of facilities exited in fiscal 2020. Restructuring and severance costs in
the first quarter of fiscal 2021 primarily included $0.3 million of severance
costs resulting from the elimination of certain positions as part of our
continued efforts to reduce costs and $0.6 million related to the ongoing costs
of facilities exited in fiscal 2020 partially offset by a $0.3 million lease
termination gain.

Other Income (Expense), net

Other expense in the first quarter of fiscal 2022 increased $0.2 million, to
$0.6 million from $0.4 million in the first quarter of fiscal 2021 due to an
increase in non-cash foreign exchange losses primarily on intercompany balances.

Provision for income tax

The income tax provision of $0.2 million and $0.3 million in the first quarter of fiscal 2022 and 2021, respectively, were primarily related to locations outside of United States.

                                       21
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CASH AND CAPITAL RESOURCES

Our primary sources of liquidity are cash flows generated from operations and
proceeds from the DZ Financing Program. Both operating cash flows and borrowing
capacity under our financing arrangement are directly related to the levels of
accounts receivable generated by our business. Our primary capital requirements
include funding working capital, operating lease obligations and
software-related expenditures.

We define our working capital as cash plus trade accounts receivable minus
current liabilities. Our working capital requirements consist primarily of
payroll, employee-related benefits and employment-related tax payments for our
contingent staff and in-house employees and trade payables, offset by
collections of customer receivables. Our most significant current asset is trade
accounts receivable, which are generally on 15 - 45 day credit terms, and our
most significant current liabilities are payroll related costs, which are
generally paid weekly. Consequently, as the demand for our services increases,
we generally see an increase in our working capital requirements, as we continue
to pay our contingent employees on a weekly basis while the related accounts
receivable is outstanding for much longer, which may result in a decline in
operating cash flows. Conversely, as the demand for our services declines, we
generally see a decrease in our working capital needs, as the existing accounts
receivable are collected and not replaced at the same level. This may result in
an increase in our operating cash flows; however, any such increase would not be
expected to be sustained in the event that an economic downturn continued for an
extended period.

Our business is subject to seasonality with our first fiscal quarter billings
typically the lowest due to the holiday season and generally increasing in the
third and fourth fiscal quarters when our customers increase the use of
contingent labor. Accordingly, the first and fourth quarters of our fiscal year
are generally the strongest for operating cash flows.

We manage our cash flow and related liquidity on a global basis. As mentioned,
we fund payroll, taxes and other working capital requirements using cash
generated by operating activities supplemented as needed from our borrowings.
Our weekly payroll payments inclusive of employment-related taxes and payments
to vendors are approximately $16.0 - $17.0 million. We generally target minimum
global liquidity to be 1.5 times our average weekly requirements taking into
account seasonality and cyclical trends. We also maintain minimum effective cash
balances in foreign operations and use a multi-currency netting and overdraft
facility for our European entities to further minimize overseas cash
requirements. We believe our cash flow from operations, as well as our borrowing
availability under our financing program, will be sufficient to meet our cash
needs for the next twelve months based on current business plans.

Our capital allocation strategy is focused on strengthening our balance sheet
and financial flexibility, as well as continuing to invest in our growth and
profitability initiatives. This strategy includes effectively managing working
capital to maximize operational efficiency, re-investing in our core growth
initiatives, in both technology enhancements and sales and recruiting talent.
These priorities demonstrate our ongoing commitment to Volt shareholders as we
continue to execute on our overall strategic plan and return to sustainable
profitability.

End of the first financial quarter January 30, 2022 compared to the first financial quarter ended January 31, 2021

Our available liquidity and capital resources are influenced by four key elements: cash, including cash equivalents and restricted cash, operating activities, investing activities and financing activities, as shown below. below compared to the previous year.

From January 30, 2022our cash, cash equivalents and restricted cash totaled
$63.4 million compared to $76.6 million from October 31, 2021.

Cash flows from operating, investing and financing activities, as reflected in our condensed consolidated statements of cash flows, are summarized in the following table (in thousands):

                                                              Three Months 

Ended

                                                    January 30, 2022      January 31, 2021
Net cash used in operating activities              $         (11,916)     $ 

(6,499)

Net cash used in investing activities                           (641)       

(963)

Net cash used in financing activities                            (16)       

(166)

Effect of exchange rate changes on cash, cash
equivalents and restricted cash                                 (597)       

(13)

Net decrease in cash, cash equivalents and
restricted cash                                    $         (13,170)     $        (7,641)



                                       22

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Cash Flow – Operating Activities

The net cash used in operating activities in the three months ended January 30,
2022 increased $5.4 million from the cash used in operating activities in the
three months ended January 31, 2021. This increase resulted primarily from a
$6.6 million increase in cash used in operating assets and liabilities,
primarily from a $13.1 million payment made towards deferred tax payments
(discussed below), partially offset by an increase related to customer receipts
and vendor payments. This increase in cash used in operating activities was
partially offset by a decrease in net loss of $1.2 million.

Cash generated from operations was supplemented by the enactment of laws
providing COVID-19 relief, most notably the CARES Act which allowed for the
deferral of payments of the Company's U.S. social security taxes between March
27, 2020 and December 31, 2020. As a result, $26.2 million of employer payroll
tax payments were deferred with $13.1 million paid on January 3, 2022 and the
remaining amounts payable with the December 31, 2022 tax payment in January
2023. In addition, certain state governments have delayed payment of various
state payroll taxes for a shorter period of time. State payroll taxes of
approximately $4.4 million deferred from the fourth quarter of fiscal 2021 were
paid beginning in the first quarter of fiscal 2022. The Company's payment of
approximately $5.1 million of state payroll taxes will be deferred from the
first quarter of fiscal 2022 with payments scheduled to begin in the second
quarter of fiscal 2022.

Additionally in fiscal 2021, we determined that we were eligible for the
employee retention tax credit ("ERTC") under the CARES Act for certain wages
paid through September 30, 2021, as our operations were fully or partially
suspended due to government orders enacted in response to the COVID-19 pandemic.
These credits reduced our payroll tax payments during fiscal 2021 through the
first half of fiscal 2022 by $12.2 million and were treated as government wage
subsidies.

Cash Flow – Investing Activities

The net cash used in investing activities in the three months ended January 30,
2022 was $0.6 million, as a result of purchases of property, equipment and
software primarily relating to our investment in updating our business
processes, back-office financial suite and information technology tools. The net
cash used in investing activities in the three months ended January 31, 2021 was
$1.0 million, principally for the purchases of property, equipment and software.

Cash flow – Financing activities

The net cash used in financing activities was minimal in the three months ended
January 30, 2022. The net cash used in financing activities in the three months
ended January 31, 2021 was $0.2 million as a result of debt issuance costs.

Funding program

The DZ Financing Program is fully collateralized by certain receivables of the
Company that are sold to a wholly-owned, consolidated, bankruptcy-remote
subsidiary. To finance the purchase of such receivables, that subsidiary may
request that DZ Bank make loans from time-to-time to that subsidiary which are
secured by liens on those receivables. The Maximum Facility Amount, as defined
in the DZ Financing Program is $100.0 million.

In December 2020, the Company amended the DZ Financing Program, which was
originally executed on January 25, 2018. The modifications to the agreement were
to (1) extend the Amortization Date, as defined in the DZ Financing Program,
from January 25, 2023 to January 25, 2024; (2) extend the Facility Maturity
Date, as defined in the DZ Financing Program, from July 25, 2023 to July 25,
2024; (3) revise an existing covenant to maintain positive net income in any
fiscal year ending after 2020 to any fiscal year ending after 2021; (4) replace
the existing Tangible Net Worth ("TNW") covenant requirement, as defined in the
DZ Financing Program, to a minimum TNW of $20.0 million through the Company's
fiscal quarter ending on or about July 31, 2021 and $25.0 million in each
quarter thereafter; and (5) revise the eligibility threshold for the receivables
of a large North American Staffing customer from 5% of eligible receivables to
8%, which increased our overall availability under the Program by $1.0 -
$3.0 million. All other terms and conditions remained substantially unchanged.

Loan advances may be made under the DZ Financing Program through January 25,
2024 and all loans will mature no later than July 25, 2024. Loans will accrue
interest (i) with respect to loans that are funded through the issuance of
commercial paper notes, at the CP rate, and (ii) otherwise, at a rate per annum
equal to adjusted LIBOR. The CP rate will be based on the rates paid by the
applicable lender on notes it issues to fund related loans. Adjusted LIBOR is
based on LIBOR for the applicable interest period and the rate prescribed by the
Board of Governors of the Federal Reserve System for determining the reserve
requirements with respect to Eurocurrency funding. If an event of default
occurs, all loans shall bear interest at a rate per annum equal to the prime
rate (the federal funds rate plus 3%) plus 2.5%.

                                       23
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The DZ Financing Program also includes a letter of credit sub-facility with a
sub-limit of $35.0 million. As of January 30, 2022, the letter of credit
participation was $22.1 million inclusive of $20.9 million for the Company's
casualty insurance program and $1.2 million for the security deposit required
under certain real estate lease agreements.

The DZ Financing Program contains customary representations and warranties as
well as affirmative and negative covenants. The agreement also contains
customary default, indemnification and termination provisions. The DZ Financing
Program is not an off-balance sheet arrangement, as the bankruptcy-remote
subsidiary is a 100%-owned consolidated subsidiary of the Company.

The Company is subject to certain financial and portfolio performance covenants
under the DZ Financing Program, including (1) a minimum TNW, as defined in the
DZ Financing Program, of $20.0 million through the Company's fiscal quarter
ending on or about July 31, 2021 and $25.0 million in each quarter thereafter;
(2) positive net income in any fiscal year ending after 2021; (3) maximum debt
to TNW ratio of 3:1; and (4) a minimum of $15.0 million in liquid assets, as
defined in the DZ Financing Program.

At January 30, 2022, the Company had outstanding borrowings under the DZ
Financing Program of $60.0 million. Borrowing availability, as defined under the
DZ Financing Program, was $2.7 million and global liquidity was $49.6 million at
January 30, 2022.

Our DZ financing program is subject to termination upon certain events of default, such as breach of covenants, including financial covenants. AT
January 30, 2022, we complied with all covenants. We believe, based on our 2022 plan, that we will continue to be able to meet our financial commitments under the DZ funding program.

The following table shows our global cash and liquidity levels at the end of our last five fiscal quarters (in thousands):

Global liquidity

                                 January 31, 2021     May 2, 2021     

August 21, 2021 October 31, 2021 January 30, 2022
Cash and cash equivalents (a) $40,062 $47,231 $

$49,595 $71,373 $54,864

Total outstanding debt $60,000 $60,000 $

  60,000    $         60,000    $         60,000

Cash in banks (b)(c)            $         36,962    $     39,288    $         43,076    $         52,938    $         46,930
DZ Financing Program                       2,225           2,868               3,990               6,046               2,657
Global liquidity                          39,187          42,156              47,066              58,984              49,587
Minimum liquidity threshold               15,000          15,000              15,000              15,000              15,000
Available liquidity             $         24,187    $     27,156    $         32,066    $         43,984    $         34,587



a.Per financial statements.
b.Amount generally includes outstanding checks.
c.Amounts in the USB collections account are excluded from cash in banks as the
balance is included in the borrowing availability under the DZ Financing
Program. As of January 30, 2022, the balance in the USB collections account
included in the DZ Financing Program availability was $7.5 million.

Liquidity outlook

As previously noted, our primary sources of liquidity are cash flows from
operations and proceeds from our financing arrangements. Both operating cash
flows and borrowing capacity under our financing arrangements are directly
related to the levels of accounts receivable generated by our businesses. Our
level of borrowing capacity under the DZ Financing Program increases or
decreases in tandem with any increases or decreases in accounts receivable based
on revenue fluctuations.

While we believe our cash provided by operating activities and borrowing
availability under the DZ Financing Program will be sufficient to meet our
operating working capital and capital expenditure requirements at a minimum for
the next twelve months, the extent to which any on-going or resurgence of
COVID-19 related impacts could affect our business, financial condition, results
of operations and cash flows in the short- and medium-term cannot be predicted
with certainty. We may also face unexpected costs or an adverse impact on our
business operations in connection with government mandated COVID-19
vaccine-related policies and procedures. Any of the above could have a material
adverse effect on our business, financial condition, results of operations and
cash flows and require us to seek additional sources of liquidity and capital
resources.

Many governments in countries and territories in which we do business have
announced that certain payroll, income and other tax payments may be deferred
without penalty for a certain period of time as well as providing other cash
flow related relief packages. As noted above, we determined that we qualify for
the payroll tax deferral under the CARES Act which allows us to delay payment of
the employer portion of payroll taxes and we are evaluating whether we qualify
for certain employment tax credits. If we qualify for such
                                       24
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credits, the credits will be treated as government wage subsidies which will
offset related operating expenses. We continue to monitor these relief packages
to take advantage of all of those which are available to us.

Entering fiscal 2022, we have significant tax benefits including federal net
operating loss ("NOL") carryforwards of $210.0 million, U.S. state NOL
carryforwards of $226.3 million, international NOL carryforwards of $8.3 million
and federal tax credits of $53.3 million, which are fully reserved with a
valuation allowance which we will be able to utilize against future profits. As
of October 31, 2021, the U.S. federal NOL carryforwards will expire at various
dates between 2031 and 2038 (with some indefinite), the U.S. state NOL
carryforwards will expire at various dates beginning in 2022 (with some
indefinite), the international NOL carryforwards will expire at various dates
beginning in 2022 (with some indefinite) and federal tax credits will expire
between 2022 and 2040.

In addition to our discussion and analysis surrounding our liquidity and capital
resources, our significant contractual obligations and commitments as of January
30, 2022, include:

• Debt securities and interest payments – From January 30, 2022our outstanding debt was $60.0 million. See Note 9, “Debt,” to our consolidated financial statements, for more details on our debt and the timing of expected future principal and interest payments.

• Lease obligations – From January 30, 2022our remaining contractual commitment for the leases was $39.6 million. See Note 3, “Leases,” to our consolidated financial statements for more details on our obligations and the timing of expected future payments, including a five-year maturity.

•Software-Related Expenditures - As of January 30, 2022, we had contractual
commitments for software-related expenditures of $3.7 million. We anticipate
capital expenditures in fiscal 2022 of approximately $4.0 - $5.0 million as we
continue to support our strategic initiatives through improved technology, as
necessary. While the majority of our software-related contractual obligations
does not currently extend beyond fiscal 2022, we anticipate annual payments of
approximately $5.5 million for the on-going use of our core technology.

•Casualty Insurance - As of January 30, 2022, we had accrued casualty claims of
$14.2 million under our Casualty Insurance Program. While we cannot accurately
predict future insurance claim liability, we estimate our related expenditures
in fiscal 2022 to be in the range of $8.0 - $11.0 million, based on historical
data.

Off-balance sheet arrangements

From January 30, 2022we had no off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

© Edgar Online, source Previews

If you’re struggling to make ends meet, you might think payday loans and credit cards are your only option – but it has landed Miranda Malanga £11,000 in debt.

Miranda, 34, who lives in Oxfordshire and is now a security manager at a pharmaceutical company, found herself in a ‘vicious circle’ of taking out payday loans to pay her bills when she was home ‘university.

2

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Payday loans are short-term loans, usually for small amounts of money, given to people who are struggling to grow their money until the next payment – but they usually come with high interest rates.

Miranda’s reliance on these loans, as well as increasing credit card debt from spending too much money at her favorite shops, meant she was owed £11,000 by the time she finished school.

Miranda fell into the common trap of taking out new loans to cover what she owed elsewhere.

In all, she took out six payday loans, racking up £3,200 in debt.

She also owed £2,500 worth of store cards – a type of credit card you can only use in one store.

On top of that, her credit card debt was over £3,200, she had £1,700 in her overdraft and she owed £690 on her phone bill.

“Being in debt made me feel defeated,” Miranda said.

“I wanted to be out of my situation as quickly as possible.

“I missed some payments on my payday loans, and I was constantly being chased with phone calls, letters and emails.

“Some of the companies I took loans from sold my debt to a debt collection agency – it was really scary to be sued by them.”

In 2014, Miranda decided to “stop putting my head in the sand” and start paying off her debt.

In just 18 months, she had cleared everything and started accumulating savings, eventually even buying a house. She explains how she did it.

snowball method

Miranda sat down and rummaged through her finances to figure out exactly how much she owed and to whom.

“I wrote down each company I owed money to and calculated how much I could afford to pay each month to clear each debt,” she said.

“I called each lender, was honest and shared details of all my debts to see if I could put together a more affordable repayment plan.”

After agreeing better repayment rates with most of her lenders, Miranda figured out which debt to focus on – so she could repay more than the minimum amount each month.

“I decided to use the snowball method to clear my debts,” she said.

“That meant settling my smaller debts first and paying off the bigger ones last.

Although many experts advise you to settle the debts with the highest interest rate first so that you end up paying less interest, this does not work for everyone.

Miranda said: “I thought it would motivate me to keep paying off my debts – I wanted to see that I was making progress on my plan.

“Psychologically, this method helped me stay focused on my goal.”

Cut expenses

To settle her debts faster, Miranda tried to reduce her expenses as much as possible.

“I would aim to spend £100 a month on food, avoiding branded goods and buying things in bulk,” she said.

“Meal planning helped me stick to that budget because I was only buying the things I needed.”

She got rid of the subscription, saving nearly £100 a month.

“I had a few magazine subscriptions which saved me £30 a month after I canceled them.

“And got rid of my gym membership, saving me £40 a month.”

Miranda also said she had ‘quit my social life’ to save £250 a month.

She used to spend up to £100 a month to see her friends and £150 on train tickets to see her family and then-boyfriend.

But she stopped that, choosing to stay and save her money instead.

Credit score issues

It took Miranda 18 months to clear her debt.

“I felt good, but realized I had no savings,” she said.

“I had spent so much time settling my debts when I could have saved money to go on a trip or save an emergency fund.”

Her debt also left black marks on her credit rating because she missed some repayments on payday loans.

Your credit score indicates how well you’ve managed your borrowings over the past six years.

Lenders use it to decide whether or not to give you credit. Thus, a bad score can prevent the acceptance of your request.

Miranda waited until 2020 before she could start thinking seriously about buying a house she had saved up for.

Having black marks on your credit report makes getting a mortgage much more difficult, but by then she had managed to improve her credit rating significantly.

She said: “I regret taking payday loans. “I was in dire straits where I needed the money, but if I could go back, I never would.”

How to get help with your debts

If, like Miranda, you find your debts unmanageable, there are steps you should take to resolve your situation,

Here’s how to get yourself out of the red.

Dive into your finances

It can be tempting to try to ignore your mounting debt if you’re struggling to pay it off.

But the first thing you need to do is sit down and figure out exactly how much you owe and to whom.

Once you’ve done this, you can calculate a budget based on your expenses to see how much you can afford to repay your loans.

Talk to your lenders and be honest about your situation – you may be able to negotiate a more affordable repayment plan.

Prioritize your debts

If you don’t have enough money to pay everything you owe, pay off your biggest debts first.

These are the ones that could see you losing your home or paying exorbitant interest rates, for example – like your mortgage, council tax and energy bills.

Pay more than the minimum

If you can afford it, you should try to pay off more than the minimum amount of your debt each month.

Only meeting minimum repayments means it will take a lot longer to clear your debt and you’ll end up paying more interest as well.

See how much more you can afford to pay each month, then decide which debt to focus your efforts on.

You can choose the snowball method like Miranda and invest more money in your smallest debt first – or you can choose the debt with the highest interest rate.

Take advice

You can get free advice on how to pay off your debt.

Here are some charities and organizations that will help you get your finances under control and you won’t have to pay them a dime for their help:

As the cost of living crisis worsens, you may be evaluating your regular monthly expenses and looking for things you can reduce.

If you’re lucky enough to be a homeowner, your biggest monthly expense will likely be your mortgage. But will your lender allow you to lower your payments if you explain that you are having difficulty? And how will this affect your credit report?

Also, if you have life insurance or a pension, can you pause your payments and what will be the consequences?

Take a break from your mortgage

According to UK Finance, the banking trade association, mortgage lenders should offer a “forbearance” to any customer who is in financial difficulty or unable to make their mortgage payments.

This could take the form of an authorized payment holiday, where your lender allows you to not pay your mortgage for a short period of time, usually up to three months. Alternatively, with your lender’s permission, you may be allowed to reduce your monthly repayments.

These arrangements come at a cost. Any payment holidays will be noted on your credit report, which could have repercussions the next time you want to borrow money – you might, for example, have to pay a higher interest rate. You’ll also have to repay anything you missed once you’re no longer in financial difficulty. Your mortgage will likely cost you a lot more in the long run.

“The big downside to payment holidays is that you end up with a bigger mortgage to manage when you start making payments again,” says David Hollingworth of mortgage broker L&C.

Every day you don’t reduce the original amount you owe, you’ll accrue interest on it. In addition, you will have to catch up on missing payments.

That means “you end up making a higher payment for the rest of the mortgage — because you have a bigger mortgage,” says Hollingworth.

Also, lenders are only likely to agree to a payment holiday if they think your situation is temporary and a short break will give you enough breathing room to get back on your feet. “They would want to be sure it was the right thing to do because it will cost you more in the long run,” he adds.

Cancellation of life insurance premiums

It may be possible to reduce your life insurance cover or take a short break in your payments, without this affecting your cover – but only if your insurer agrees.

LV= allows this – but you can only qualify if your policy (for income protection, critical illness or life insurance) has been in force for a year or more, you have a good payment history and that you are less than three months behind with monthly payments. premiums. You must declare that you have suffered a significant drop in your income or that your usual income has ceased. Payment suspension will only be offered for one month at a time, up to three months.

You are not obligated to make up missed premiums and your coverage will remain in place for the entire period of payment interruption. Thereafter, your bounties will revert to your normal level and you will not be able to request another break thereafter.

Your insurer, if not LV=, may take a different approach. “If you’re having trouble keeping up with your premium payments, the first thing to do is contact your insurer to see what they might suggest,” says Malcolm Tarling of the Association of British Insurers. “They can follow LV=’s example and say, ‘We can stop your bonuses and you can have a bonus holiday for a specific period of time.’ Or they may say you can reduce your premiums but you’ll have to take a corresponding reduction in the amount of coverage you have.

AIG takes this second approach with customers who are experiencing financial difficulties. They will consider letting you reduce the monthly cost of your protection insurance for up to six months, but you won’t be able to take a full break from your payments. More importantly, during the period when you pay reduced premiums, the value of the coverage you receive will be reduced.

For example, it says a 33-year-old man with £250,000 of life cover, paying £21.86 a month, could reduce his payments to £4.17 a month for six months. However, the maximum that could be claimed during this six month period would only be £10,000.

In other words, in this scenario, an 80% reduction in the cost of the monthly policy would lead to a 96% reduction in the value of the cover and make your loved ones worse off by £240,000 if you died – while saving you just £17.69 per month. However, if £4.17 a month is all you can afford and you want to keep some sort of cover in place, this drastic step may be worth considering.

At the end of the six months, you can either keep your premium reduced or return it to your usual level, with no further underwriting required. You won’t be asked to cover the payment difference when your premiums return to normal, and for the full six-month period you’ll have access to AIG’s health and wellness assistance services 24/7 /7.

Reduce your pension contributions

You may also be considering reducing or stopping your pension contributions for a while. This may alleviate some of your short-term financial pressures, but it will reduce your retirement income.

“Staying in your pension and making regular contributions, if they’re affordable, is one of the best ways to protect your future,” says Eve Read, spokesperson for Nest, the nonprofit program set up by the government. to facilitate occupational pensions. “Especially if you’re saving into a company pension, like Nest, because your employer will be paying in cash, and you also get tax relief from the government – those extra contributions effectively double your investment.”

From April, the annual energy bill for an average household is expected to rise by £693 a year or £57.75 a month, according to Ofgem. If you are a basic rate taxpayer and you divert £57.75 per month from your pension contributions to your energy bill for a year, you will lose £14.45 in tax relief per month and £34.90 £ per month of employer contributions (assuming your employer contributes the minimum amount they can to your pension each month via automatic enrollment).

Cutting £693 a year from your pension will mean £1,284 less in your fund. If that money manages to grow by 5% a year until you retire, the long-term cost is even higher. Hargreaves Lansdown, an investment platform, estimates that a 40-year-old basic-rate taxpayer who cuts his pension payments in this way – cutting his contributions by just £57.75 a month for just one year – ​would end up £4,569 worse before age 67.

“It can be tempting to cut pension contributions when money is tight, but it’s important to remember that you’re losing more than your own contribution,” says Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown. “The tax relief and employer contribution give your pension a real boost and, together with long-term investment returns, can have a powerful impact on how much you’ll find back in retirement.

“If you find yourself in a position where you need to cut or stop your contributions, try to resume them as soon as possible.”

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Management's Discussion and Analysis of Financial Condition and Results of
Operations, as well as disclosures found elsewhere in this report are based upon
First Financial Corporation's consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
the Corporation to make estimates and judgments that affect the reported amounts
of assets, liabilities, revenues, and expenses. Material estimates that are
particularly susceptible to significant change in the near term relate to the
determination of the allowance for credit losses, securities valuation and
goodwill. Actual results could differ from those estimates.

Provision for credit losses. The allowance for credit losses represents management’s estimate of expected losses inherent in the existing loan portfolio. The allowance for credit losses is increased by the allowance for credit losses charged

                                       32
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expense and reduced by loans charged off, net of recoveries. The allowance for
credit losses is determined based on management's assessment of several factors:
reviews and evaluations of specific loans, changes in the nature and volume of
the loan portfolio, current economic conditions, nonperforming loans,
determination of acquired loans as purchase credit deteriorated, and reasonable
and supportable forecasts. Loans are individually evaluated when they do not
share risk characteristics with other loans in the respective pool. Loans
evaluated individually are excluded from the collective evaluation. Management
elected the collateral dependent practical expedient upon adoption of ASC 326.
Expected credit losses on individually evaluated loans are based on the fair
value of the collateral at the reporting date, adjusted for selling costs as
appropriate.

We utilize a cohort methodology to determine the allowance for credit losses.
This method identifies and captures the balance of a pool of loans with similar
risk characteristics, as of a particular point in time to form a cohort, then
tracks the respective losses generated by that cohort of loans over their
remaining life. Our cohorts track loan balances and historical loss experience
since 2008. Where past performance may not be representative of future losses,
loss rates are adjusted for qualitative and economic forecast factors.
Qualitative factors include items such as changes in lending policies or
procedures, asset specific risks, the impact of COVID-19 on customer's
operations, and economic uncertainty in forward-looking forecasts. Economic
indicators utilized in forecasting include unemployment rate, gross domestic
product, housing starts, and interest rates.

Changes in the financial condition of individual borrowers, economic conditions,
historical loss experience, or the condition of the various markets in which
collateral may be sold may affect the required level of the allowance for credit
losses and the associated provision for credit losses. Should cash flow
assumptions or market conditions change, a different amount may be recorded for
the allowance for credit losses and the associated provision for credit losses.

Securities valuation and potential impairment. Securities available-for-sale are
carried at fair value, with unrealized holding gains and losses reported
separately in accumulated other comprehensive income (loss), net of tax. The
Corporation obtains market values from a third party on a monthly basis in order
to adjust the securities to fair value. Equity securities that do not have
readily determinable fair values are carried at cost. Additionally, all
securities are required to be evaluated for impairment related to credit losses.
In evaluating for impairment, management considers the reason for the decline,
the extent of the decline, and whether the Corporation intends to sell a
security or is more likely than not to be required to sell a security before
recovery of its amortized cost. If an entity intends to sell or it is more
likely than not it will be required to sell the security before recovery of its
amortized cost basis, the security's amortized cost is written down to fair
value through income. If an entity does not intend to sell the security and it
is not more likely than not that the entity will be required to sell the
security before recovery of its amortized cost basis less any current-period
loss, a credit loss exists and an allowance for credit losses is recorded,
limited to the amount that the fair value of the security is less than its
amortized cost basis. Any impairment that has not been recorded through an
allowance for credit losses is recognized in other comprehensive income, net of
applicable taxes. No allowance for credit losses for available-for-sale
securities was needed at December 31, 2021.

Goodwill. The carrying value of goodwill requires management to use estimates
and assumptions about the fair value of the reporting unit compared to its book
value. An impairment analysis is prepared on an annual basis. Fair values of the
reporting units are determined by an analysis which considers cash flows
streams, profitability and estimated market values of the reporting unit. With
the decrease in market value as a result of the pandemic, the Corporation
engaged a third party to conduct an in-depth analysis of the Corporation as of
October 31, 2021. The final results determined that there was no impairment of
goodwill. From the effective date of the analysis to December 31, 2021, the
Corporation's market value increased. The majority of the Corporation's goodwill
is recorded at First Financial Bank, N. A.

Management believes the accounting estimates related to the allowance for credit
losses, valuation of investment securities and the valuation of goodwill are
"critical accounting estimates" because: (1) the estimates are highly
susceptible to change from period to period because they require management to
make assumptions concerning, among other factors, the changes in the types and
volumes of the portfolios, valuation assumptions, and economic conditions, and
(2) the impact of recognizing an impairment or credit loss could have a material
effect on the Corporation's assets reported on the balance sheet as well as net
income.

RESULTS OF OPERATIONS – SUMMARY FOR 2021

COMPARISON FROM 2021 TO 2020

Net income for 2021 was $53.0 million, or $4.02 per share versus $53.8 million,
or $3.93 per share for 2020. The decrease in 2021 net income is due to increased
expenses from the Hancock acquisition, as well as declining interest rates.
Return on average assets at December 31, 2021 decreased 12.00% to 1.10% compared
to 1.25% at December 31, 2020.

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The main components of revenues and expenses affecting net profit are examined in the following analysis.

NET INTEREST INCOME

The principal source of the Corporation's earnings is net interest income, which
represents the difference between interest earned on loans and investments and
the interest cost associated with deposits and other sources of funding. Net
interest income decreased in 2021 to $143.4 million compared to $146.3 million
in 2020. Total average interest earning assets increased to $4.61 billion in
2021 from $3.71 billion in 2020. The tax-equivalent yield on these assets
decreased to 3.39% in 2021 from 4.43% in 2020. Total average interest-bearing
liabilities increased to $3.43 billion in 2021 from $2.98 billion in 2020. The
average cost of these interest-bearing liabilities decreased to 0.26% in 2021
from 0.47% in 2020.

Net interest margin decreased from 4.05% in 2020 to 3.20% in 2021. Yields on earning assets decreased by 104 basis points while rate on interest bearing liabilities decreased by 21 basis points .

CONSOLIDATED BALANCE SHEET – AVERAGE BALANCES AND INTEREST RATES

                                                                                                                                           December 31,
                                                                                  2021                                                         2020                                                         2019
                                                            Average                                  Yield/              Average                                  Yield/              Average                                  Yield/
(Dollar amounts in thousands)                               Balance             Interest              Rate               Balance             Interest              Rate               Balance             Interest              Rate
ASSETS
Interest-earning assets:
Loans (1) (2)                                            $ 2,602,344            128,978                 4.96  %       $ 2,702,225            138,302                 5.12  %       $ 2,270,313            125,906                 5.55  %
Taxable investment securities                                890,563             13,110                 1.47  %           689,203             13,625                 1.98  %           621,756             15,191                 2.44  %
Tax-exempt investments (2)                                   387,935             13,544                 3.49  %           322,121             12,731                 3.95  %           302,757             11,999                 3.96  %
Cash and due from banks                                      726,412                888                 0.12  %                 -                  -                    -  %                 -                  -                    -  %
Federal funds sold                                             4,487                 42                 0.94  %             1,245                 71                 5.70  %             3,029                143                 4.72  %
Total interest-earning assets                              4,611,741            156,562                 3.39  %         3,714,794            164,729                 4.43  %         3,197,855            153,239                 4.79  %
Non-interest earning assets:
Cash and due from banks                                            -                                                      370,883                                                       86,592
Premises and equipment, net                                   64,787                                                       63,145                                                       54,336
Other assets                                                 183,589                                                      187,415                                                      121,411
Less allowance for loan losses                               (45,767)                                                     (23,318)                                                     (20,401)
TOTALS                                                   $ 4,814,350                                                  $ 4,312,919                                                  $ 3,439,793
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Transaction accounts                                     $ 2,799,227              2,751                 0.10  %       $ 2,282,750              4,424                 0.19  %       $ 2,057,713              9,847                 0.48  %
Time deposits                                                520,885              5,407                 1.04  %           589,975              8,377                 1.42  %           447,172              5,864                 1.31  %
Short-term borrowings                                         99,805                387                 0.39  %            90,613                568                 0.63  %            60,924              1,105                 1.81  %
Other borrowings                                               7,562                252                 3.33  %            18,335                770                 4.20  %            24,780                653                 2.64  %
Total interest-bearing liabilities:                        3,427,479              8,797                 0.26  %         2,981,673             14,139                 0.47  %         2,590,589             17,469                 0.67  %
Non interest-bearing liabilities:
Demand deposits                                              717,764                                                      660,011                                                      292,445
Other                                                         71,738                                                       77,444                                                       59,430
                                                           4,216,981                                                    3,719,128                                                    2,942,464
Shareholders' equity                                         597,369                                                      593,791                                                      497,329
TOTALS                                                   $ 4,814,350                                                  $ 4,312,919                                                  $ 3,439,793
Net interest earnings                                                         $ 147,765                                                    $ 150,590                                                    $ 135,770
Net yield on interest- earning assets                                                                   3.20  %                                                      4.05  %                                                      4.25  %



(1)For purposes of these computations, non-accruing loans are included in the
daily average loan amounts outstanding.
(2)Interest income includes the effect of tax equivalent adjustments using a
federal tax rate of 21%.



                                       34

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The following table shows the components of net interest income attributable to volume and rate variations. The information in the table compares 2021 to 2020 and 2020 to 2019.

                                                                             2021 Compared to 2020 Increase                                          

2020 vs. 2019 Increase

                                                                                   (Decrease) Due to                                                       (Decrease) Due to
                                                                                                 Volume/                                                                  Volume/
(Dollar amounts in thousands)                                 Volume             Rate              Rate             Total            Volume              Rate              Rate              Total
Interest earned on interest-earning assets:
Loans (1) (2)                                               $ (5,112)         $ (4,374)         $   162          $ (9,324)         $ 23,953          $  (9,710)         $ (1,847)         $ 12,396
Taxable investment securities                                  3,981            (3,479)          (1,017)             (515)            1,648             (2,899)             (315)           (1,566)
Tax-exempt investment securities (2)                           2,600            (1,484)            (303)              813               767                (33)               (2)              732
Cash and due from banks                                            -                 -              888               888                 -                  -                 -                 -
Federal funds sold                                               185               (59)            (155)              (29)              (84)                30               (18)              (72)
Total interest income                                       $  1,654          $ (9,396)         $  (425)         $ (8,167)         $ 26,284          $ (12,612)         $ (2,182)         $ 11,490
Interest paid on interest-bearing liabilities:
Transaction accounts                                           1,001            (2,181)            (493)           (1,673)            1,077             (5,859)             (641)           (5,423)
Time deposits                                                   (981)           (2,253)             264            (2,970)            1,873                485               155             2,513
Short-term borrowings                                             58              (217)             (22)             (181)              538               (723)             (352)             (537)
Other borrowings                                                (452)             (159)              93              (518)             (170)               388              (101)              117
Total interest expense                                          (374)           (4,810)            (158)           (5,342)            3,318             (5,709)             (939)           (3,330)
Net interest income                                         $  2,028          $ (4,586)         $  (267)         $ (2,825)         $ 22,966          $  (6,903)         $ (1,243)         $ 14,820



(1)For purposes of these computations, non-accruing loans are included in the
daily average loan amounts outstanding.
(2)Interest income includes the effect of tax equivalent adjustments using a
federal tax rate of 21%.

PROVISION FOR CREDIT LOSSES

The provision for credit losses charged to expense is based upon current
expected loss and the results of a detailed analysis estimating an appropriate
and adequate allowance for credit losses. The analysis is governed by Accounting
Standards Codification (ASC 326), implemented in 2020, which uses an economic
forecast that includes the impact of the COVID-19 pandemic. For the year ended
December 31, 2021, the provision for credit losses was $2.5 million, a decrease
of $8.1 million, or 77%, compared to 2020. In 2020, along with the adoption of
CECL, $4 million was added to allowance to accommodate anticipated losses from
the pandemic. In 2021 when those losses became unrealized, the additional
pandemic allowances were removed, as well as CECL performance requiring lower
allowance for credit losses. Continued loan growth in future periods, an
increase in charge-offs, or a decline in our current level of recoveries could
result in an increase in provision expense. Additionally, with the adoption of
ASC 326 in 2020, provision expense may become more volatile due to changes in
CECL model assumptions of credit quality, economic conditions, and loan
composition, which drive allowance for credit losses.

Net charge-offs for 2021 were $2.6 million as compared to $3.5 million for 2020
and $5.2 million for 2019. Non-accrual loans, excluding TDR's, decreased to $9.6
million at December 31, 2021 from $15.4 million at December 31, 2020. Loans past
due 90 days and still on accrual decreased to $515 thousand compared to $2.3
million at December 31, 2020.

NON-INTEREST INCOME

Non-interest income from $42.1 million decreases $392,000 from $42.5 million earned in 2020. Non-interest income decreased due to lower gains on sales of mortgages.

NON-INTEREST EXPENSES

Non-interest expenses increased to $117.4 million in 2021 from $112.8 million in
2020. The increase was mainly due to increased expenses from the acquisition of
Hancock Bancorp, Inc.

INCOME TAXES

The Corporation's federal income tax provision was $12.6 million in 2021
compared to $11.7 million in 2020. The overall effective tax rate in 2021 of
19.2% increased as compared to a 2020 effective rate of 17.8%. The increase is
primarily due to increase of general business tax credits benefits earned in
2020.

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COMPARISON FROM 2020 TO 2019

Net income for 2020 was $53.8 million Where $3.93 per share compared to $48.9 million in 2019 or $3.80 per share. The increase in net profit in 2020 is mainly due to an increase in net interest income related to the impact of the acquisition on the full year. The 2019 net result includes the results of the acquisition of
HopFed, Inc.

Net interest income increased $14.6 million in 2020 compared to 2019. Provision for credit losses increased $5.8 million from $4.7 million in 2019 at
$10.5 million in 2020. Non-interest expense increased $8.4 million and non-interest income increased $4.0 million. The increase in non-interest expenses is largely explained by the acquisition of HopFed, Inc.

The provision for income taxes decreased $492 thousand from 2019 to 2020 and the
effective tax rate decreased to 17.8% in 2020 from 20.0% in 2019. The decrease
is primarily due to increase of general business tax credits benefits earned in
2020.

COMPARISON AND DISCUSSION OF THE 2021 TO 2020 REPORT

The Corporation's total assets increased 13.5% or $614.6 million at December 31,
2021, from a year earlier. Available-for-sale securities increased $344.0
million at December 31, 2021, from the previous year. Loans, net increased by
$204.3 million to $2.77 billion. Deposits increased $653.6 million while
borrowings decreased by $12.6 million. Total shareholders' equity decreased
$14.4 million to $582.6 million at December 31, 2021. In 2021 dividends paid by
the Corporation totaled $1.06 per share. There were also 31,355 shares from the
treasury with a value of $1.40 million that were contributed to the ESOP plan in
2021 compared to 39,029 shares with a value of $1.47 million in 2020.

Here is an analysis of the components of the Company’s balance sheet.

SECURITIES

The Corporation's investment strategy seeks to maximize income from the
investment portfolio while using it as a risk management tool and ensuring
safety of principal and capital. During 2021 the portfolio's balance increased
by 33.7%. The average life of the portfolio increased from 3.8 years in 2020 to
5.0 years in 2021. The portfolio structure will continue to provide cash flows
to be reinvested during 2022.

                                                                      1 year and less                               1 to 5 years                               5 to 10 years                              Over 10 Years                        2021
(Dollar amounts in thousands)                                   Balance                 Rate                Balance                Rate                Balance                 Rate                Balance                Rate                Total
U.S. government sponsored entity mortgage-backed
securities and agencies and U.S. Treasury (1)              $       12,784                 2.37  %       $     28,466                 1.84  %       $      42,881                 3.96  %       $    678,295                 2.15  %       $   762,426
Collateralized mortgage obligations (1)                             3,449                 2.17  %                688                 3.79  %               7,516                 2.15  %            163,352                 2.32  % 

175,005

States and political subdivisions                                   5,358                 3.27  %             34,438                 2.97  %              75,506                 2.68  %            303,422                 2.57  %           418,724
Other securities                                                    3,477                 1.40  %              1,245                 0.01  %                 498                 0.01  %                  -                    -  %             5,220
Collateralized debt obligations                                         -                    -  %                  -                    -  %                   -                    -  %              3,359                    -  %             3,359
TOTAL                                                      $       25,068                 2.40  %       $     64,837                 2.42  %       $     126,401                 3.07  %       $  1,148,428                 2.28  %       $ 1,364,734


 (1) Distribution of maturities is based on the estimated life of the asset.

                                                                      1 year and less                               1 to 5 years                               5 to 10 years                               Over 10 Years                       2020
(Dollar amounts in thousands)                                   Balance                 Rate                Balance                Rate                Balance                 Rate                Balance                 Rate                Total
U.S. government sponsored entity mortgage-backed
securities and agencies (1)                                $        8,892                 2.21  %       $     36,343                 1.87  %       $      40,007                 5.02  %       $     388,936                 2.44  %       $  474,178
Collateralized mortgage obligations (1)                                 -                    -  %              3,728                 5.19  %               5,400                 1.67  %             205,032                 2.42  %          214,160
States and political subdivisions                                   4,414                 3.17  %             35,651                 3.15  %              57,755                 3.06  %             231,450                 2.87  %          329,270
Collateralized debt obligations                                         -                    -  %                  -                    -  %                   -                    -  %               3,136                    -  %            3,136
TOTAL                                                              13,306                 2.53  %             75,722                 2.64  %             103,162                 3.74  %             828,554                 2.55  %        1,020,744

(1) The breakdown of maturities is based on the estimated useful life of the asset.

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LOAN PORTFOLIO

Loans outstanding by major category as of December 31 for each of the last five
years and the maturities at year end 2021 are set forth in the following
analyses.
(Dollar amounts in thousands)                 2021                 2020                 2019                 2018                 2017
Loan Category
Commercial                               $ 1,674,066          $ 1,521,711          $ 1,584,447          $ 1,166,352          $ 1,139,490
Residential                                  664,509              604,652              682,077              443,670              436,143
Consumer                                     474,026              479,750              386,006              341,041              327,976
TOTAL                                    $ 2,812,601          $ 2,606,113          $ 2,652,530          $ 1,951,063          $ 1,903,609



                                                             After One
                                               Within        But Within      After Five
(Dollar amounts in thousands)                 One Year       Five Years        Years            Total
MATURITY DISTRIBUTION
Commercial, financial and agricultural       $ 535,632      $  748,859      $  389,575      $ 1,674,066
TOTAL
Residential                                                                                     664,509
Consumer                                                                                        474,026
TOTAL                                                                                       $ 2,812,601
Loans maturing after one year with:
Fixed interest rates                                        $  437,115      $  346,566
Variable interest rates                                        311,744          43,009
TOTAL                                                       $  748,859      $  389,575



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PROVISION FOR CREDIT LOSSES

The activity in the Corporation's allowance for credit losses is shown in the
following analysis:
(Dollar amounts in thousands)                 2021                 2020                 2019                 2018                 2017
Amount of loans outstanding at
December 31,                             $ 2,812,601          $ 2,606,113   

$2,652,530 $1,951,063 $1,903,609
Average amount of loans per year $2,602,344 $2,702,225

          $ 2,270,313          $ 1,855,092          $ 1,792,609
Allowance for credit losses at
beginning of year                        $    44,076          $    19,943          $    20,436          $    19,909          $    18,773
Loans charged off:
Commercial                                     2,158                1,097                2,616                1,122                1,572
Residential                                      812                  944                1,050                  841                  761
Consumer                                       5,246                6,355                7,007                6,868                6,429
Total loans charged off                        8,216                8,396               10,673                8,831                8,762
Recoveries of loans previously
charged off:
Commercial                                     1,069                  856                1,092                  606                1,377
Residential                                      616                  657                1,360                  639                  842
Consumer                                       3,884                3,404                3,028                2,345                2,384
Total recoveries                               5,569                4,917                5,480                3,590                4,603
Net loans charged off                          2,647                3,479                5,193                5,241                4,159
Provision charged to expense *                 2,466               10,528                4,700                5,768                5,295
CECL adoption                                      -               17,084                    -                    -                    -
PCD ACL on acquired loans                      4,410                    -                    -                    -                    -

Balance at end of year                   $    48,305          $    44,076          $    19,943          $    20,436          $    19,909
Ratio of net charge-offs during
period to average loans
outstanding                                     0.10  %              0.13  %              0.23  %              0.22  %              0.25  %



The allowance is maintained at an amount management believes sufficient to
absorb expected losses in the loan portfolio. Monitoring loan quality and
maintaining an adequate allowance is an ongoing process overseen by senior
management and the loan review function. On at least a quarterly basis, a formal
analysis of the adequacy of the allowance is prepared and reviewed by management
and the Board of Directors. This analysis serves as a point in time assessment
of the level of the allowance and serves as a basis for provisions for credit
losses. The loan quality monitoring process includes assigning loan grades and
the use of a watch list to identify loans of concern.

The analysis of the allowance for credit losses includes the allocation of
specific amounts of the allowance to individually evaluated loans, generally
based on an analysis of the collateral securing those loans. Portions of the
allowance are also allocated to loan portfolios, based upon a variety of factors
including historical loss experience, trends in the type and volume of the loan
portfolios, trends in delinquent and non-performing loans, and economic trends
affecting our market, including current conditions and reasonable and
supportable forecasts about the future. These components are added together and
compared to the balance of our allowance at the evaluation date. The allowance
for credit losses as a percentage of total loans increased to 1.72% at year end
2021 compared to 1.69% at year end 2020. The increase is primarily due to the
adoption of CECL. A portion of the increase was due to the requirement to
include an allowance for credit losses on purchased loans that previously only
required an allocation if there was a deterioration since acquisition date. The
calculation of historical losses used in the allowance computation averages the
net charge off activity and qualitative factors that supplement historical
losses and consider internal and external factors, including reasonable and
supportable forecasts, that influence management's expectations of loss in the
portfolio. Non-performing loans of $14.9 million at December 31, 2021 decreased
from $21.9 million at December 31, 2020. Management believes the allowance for
credit losses balance at year end 2021 is reasonable based on their analysis of
specific loans and the credit trends reflected within the loan portfolio.
                                       38
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The table below presents the allocation of the allowance to the loan portfolios
at year-end.


                                                            Years Ended December 31,
(Dollar amounts in thousands)             2021          2020          2019          2018          2017
Commercial                             $ 18,883      $ 13,925      $  8,945      $  9,848      $ 10,281
Residential                              18,316        19,142         1,302         1,313         1,455
Consumer                                 10,721        11,009         8,304         7,481         6,709
Unallocated                                 385             -         1,392         1,794         1,464
TOTAL ALLOWANCE FOR CREDIT LOSSES      $ 48,305      $ 44,076      $ 19,943      $ 20,436      $ 19,909



NONPERFORMING LOANS

Management monitors the components and status of nonperforming loans as a part
of the evaluation procedures used in determining the adequacy of the allowance
for loan losses. It is the Corporation's policy to discontinue the accrual of
interest on loans where, in management's opinion, serious doubt exists as to
collectability. The amounts shown below represent non-accrual loans, loans which
have been restructured to provide for a reduction or deferral of interest or
principal because of deterioration in the financial condition of the borrower
and those loans which are past due more than 90 days where the Corporation
continues to accrue interest. Restructured loans increased in 2021 and in 2020
due to the increased number and balance of loans added combined with the
continued receipt of payments in accordance with the restructuring terms.
Additional information regarding restructured loans is available in the
footnotes to the financial statements.

(Dollar amounts in thousands)                2021          2020          2019          2018          2017
Non-accrual loans                         $  9,590      $ 15,367      $  9,535      $ 10,974      $ 13,245
Accruing restructured loans                  3,897         3,052         3,318         3,702         3,280
Non-accrual restructured loans                 902         1,154           876         1,104         3,754
Accruing loans past due over 90 days           515         2,324         1,610           798         1,403
                                          $ 14,904      $ 21,897      $ 15,339      $ 16,578      $ 21,682



The ratio of the allowance for loan losses as a percentage of nonperforming
loans was 324.11% at December 31, 2021, compared to 226.83% in 2020. In the
footnotes to the financial statements the amount reported for nonperforming
loans is the recorded investment which includes accrued interest receivable. The
following loan categories comprise significant components of the nonperforming
loans at December 31, 2021 and 2020:

(Dollar amounts in thousands)               2021                    2020
Non-accrual loans:
Commercial loans                    $ 4,991        52  %    $  9,704        63  %
Residential loans                     3,049        32  %       4,355        28  %
Consumer loans                        1,550        16  %       1,308         9  %
                                    $ 9,590       100  %    $ 15,367       100  %
Past due 90 days or more:
Commercial loans                    $    14         3  %    $      -         -  %
Residential loans                       410        79  %       1,962        84  %
Consumer loans                           91        18  %         362        16  %
                                    $   515       100  %    $  2,324       100  %

Management considers the current allowance to be appropriate and adequate to cover expected losses inherent in the loan portfolio given the current economic environment. However, future economic changes cannot be predicted. Deteriorating economic conditions could lead to an increase in the risk characteristics of the loan portfolio and an increase in the potential for credit losses.

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DEPOSITS

The information below presents the average amount of deposits and the rates paid on these deposits for 2021, 2020 and 2019.

                                                                2021                                      2020                                      

2019

(Dollar amounts in thousands)                        Amount                Rate                Amount                Rate                Amount        

Rate

Non-interest-bearing demand deposits             $   717,764                               $   660,011                               $   292,445
Interest-bearing demand deposits                   1,309,682                 0.15  %         1,061,745                 0.27  %           979,195                 0.60  %
Savings deposits                                   1,489,545                 0.05  %         1,221,005                 0.12  %         1,078,518                 0.37  %
Time deposits: $100,000 or more                      214,976                 1.36  %           260,314                 1.88  %           139,416                 1.82  %
Other time deposits                                  305,909                 0.81  %           329,661                 1.05  %           307,756                 1.08  %
TOTAL                                            $ 4,037,876                               $ 3,532,736                               $ 2,797,330



The maturities of certificates of deposit of more than $100 thousand outstanding
at December 31, 2021, are summarized as follows:
(Dollar amounts in thousands)
3 months or less                 $  40,254
Over 3 through 6 months             28,258
Over 6 through 12 months            67,474
Over 12 months                     109,835
TOTAL                            $ 245,821



OTHER BORROWINGS

Advances from the Federal Home Loan Bank decreased to $15.9 million in 2021
compared to $5.9 million in 2020. The Asset/Liability Committee reviews these
funding sources and considers the related strategies on a monthly basis. See
Interest Rate Sensitivity and Liquidity below for more information.

CAPITAL RESOURCES

Bank regulatory agencies have established capital adequacy standards which are
used extensively in their monitoring and control of the industry. These
standards relate capital to level of risk by assigning different weightings to
assets and certain off-balance-sheet activity. As shown in the footnote to the
consolidated financial statements ("Regulatory Matters"), the Corporation's
subsidiary banking institutions capital exceeds the requirements to be
considered well capitalized at December 31, 2021.

First Financial Corporation's objective continues to be to maintain adequate
capital to merit the confidence of its customers and shareholders. To warrant
this confidence, the Corporation's management maintains a capital position which
they believe is sufficient to absorb unforeseen financial shocks without
unnecessarily restricting dividends to its shareholders. The Corporation's
dividend payout ratio for 2021 and 2020 was 28.2% and 26.6%, respectively. The
Corporation expects to continue its policy of paying regular cash dividends,
subject to future earnings and regulatory restrictions and capital requirements.

INTEREST RATE SENSITIVITY AND LIQUIDITY

First Financial Corporation has established risk measures, limits and policy
guidelines for managing interest rate risk and liquidity. Responsibility for
management of these functions resides with the Asset/Liability Committee. The
primary goal of the Asset/Liability Committee is to maximize net interest income
within the interest rate risk limits approved by the Board of Directors.

Interest Rate Risk: Management considers interest rate risk to be the
Corporation's most significant market risk. Interest rate risk is the exposure
to changes in net interest income as a result of changes in interest rates.
Consistency in the Corporation's net interest income is largely dependent on the
effective management of this risk. The Asset/Liability position is measured
using sophisticated risk management tools, including earnings simulation and
market value of equity sensitivity analysis. These tools
                                       40
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allow management to quantify and monitor both short-and long-term exposure to
interest rate risk. Simulation modeling measures the effects of changes in
interest rates, changes in the shape of the yield curve and the effects of
embedded options on net interest income. This measure projects earnings in the
various environments over the next three years. It is important to note that
measures of interest rate risk have limitations and are dependent on various
assumptions. These assumptions are inherently uncertain and, as a result, the
model cannot precisely predict the impact of interest rate fluctuations on net
interest income. Actual results will differ from simulated results due to
timing, frequency and amount of interest rate changes as well as overall market
conditions. The Committee has performed a thorough analysis of these assumptions
and believes them to be valid and theoretically sound. These assumptions are
continuously monitored for behavioral changes.

The Corporation from time to time utilizes derivatives to manage interest rate
risk. Management continuously evaluates the merits of such interest rate risk
products but does not anticipate the use of such products to become a major part
of the Corporation's risk management strategy.

The table below shows the Corporation's estimated sensitivity profile as of
December 31, 2021. The change in interest rates assumes a parallel shift in
interest rates of 100 and 200 basis points. Given a 100 basis point increase in
rates, net interest income would increase 5.09% over the next 12 months and
increase 8.96% over the following 12 months. Given a 100 basis point decrease in
rates, net interest income would decrease 6.49% over the next 12 months and
decrease 10.91% over the following 12 months. These estimates assume all rate
changes occur overnight and management takes no action as a result of this
change.
Basis Point                               Percentage Change in Net Interest Income
Interest Rate Change                      12 months                     24 months      36 months

Down 100                                                   -6.49  %      -10.91  %      -13.51  %
Up 100                                                      5.09  %        8.96  %       11.92  %
Up 200                                                      6.61  %       13.62  %       19.54  %

The typical analysis of rate shocks does not reflect management’s ability to react and therefore reduce the effects of rate changes, and represents the worst-case scenario.

Liquidity Risk Liquidity is measured by the bank's ability to raise funds to
meet the obligations of its customers, including deposit withdrawals and credit
needs. This is accomplished primarily by maintaining sufficient liquid assets in
the form of investment securities and core deposits. The Corporation has $25.1
million of investments that mature throughout the coming 12 months. The
Corporation also anticipates $164.5 million of principal payments from
mortgage-backed securities. Given the current rate environment, the Corporation
anticipates $30.0 million in securities to be called within the next 12 months.

The Company also has additional sources of liquidity through its secured and unsecured borrowing capacity. These include upstream correspondents, Federal mortgage bank and the Federal Reserve Bank.

CONTRACTUAL OBLIGATIONS, COMMITMENTS, CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS

The Company has various financial obligations, including contractual obligations and commitments that may require future cash payments.

Contractual Obligations: The following table presents, as of December 31, 2021,
significant fixed and determinable contractual obligations to third parties by
payment date. Further discussion of the nature of each obligation is included in
the referenced note to the consolidated financial statements.
                                                                                                                      Payments Due in
                                                                       Note                One year            One year to            Three to            Over Five
(Dollar amounts in thousands)                                        Reference             or less             Three Years           Five Years             Years               Total
Deposits without a stated maturity                                                      $ 3,859,753          $          -          $         -          $        -          $ 3,859,753
Consumer certificates of deposit                                                            326,173               191,871               31,681                  91              549,816
Short-term borrowings                                                       11               93,374                     -                    -                   -               93,374
Other borrowings                                                            12                    -                15,937                    -                   -               15,937

The Company has obligations under its pension plan, supplemental executive retirement plan and post-retirement medical benefit plan, as described in note 16 to the consolidated financial statements.

                                       41
--------------------------------------------------------------------------------

The Company has lease obligations on certain branch properties and equipment, as described in Note 8 to the consolidated financial statements.

Commitments: The following table details the amount and expected maturities of
significant commitments as of December 31, 2021. Further discussion of these
commitments is included in Note 15 to the consolidated financial statements.

                                    Total Amount       One year       Over 

A

(Dollar amounts in thousands)         Committed         or less         Year
Commitments to extend credit:
Unused loan commitments            $     823,422      $ 698,588      $ 

124,834

Commercial letters of credit               7,042          7,042             

–

Commitments to extend credit, including loan commitments, standby and commercial
letters of credit do not necessarily represent future cash requirements, in that
these commitments often expire without being drawn upon.

© Edgar Online, source Previews

Payday lenders who have suffered the severe consequences of the pandemic are anxiously awaiting the end of most government programs in the United States. Those who follow the industry say high cost loans can never be fully paid off.

Since 2020, the federal government has increased unemployment benefits, federal stimulus payments and evictions. In fact, the number of loans no credit check guaranteed approval dropped in some states more than 45%. The situation is not about to change in the near future.

The story gets even more complicated as Americans have used much of their savings to pay off their debts. They do this primarily to protect a solid monthly child tax credit. Additionally, regulatory scrutiny is likely to tighten under the Biden government.

Turbocharged Trends Experienced by Online Payday Loans

Online payday loans are meant to prepare for a shift in customer preferences. Since 2019, small dollar loan volumes have declined significantly. If customer demand is lower, direct lenders tend to verify customer needs.

Company for the traditional payday lenders offers 400% annual percentage rates on loans, high fees and small payment plans. It has been attractive to everyone nationwide. But the pandemic has amplified these trends.

Payday loans are available in Alabama, Michigan, North Dakota, Washington, and Wisconsin. Since 2020, this type of service is provided at 40% and 60%. As for the low points, the federal distribution is associated with stimulus payments. According to Veritec Solutions, a data provider collates data from state regulators.

And the California Department of Financial Protection and Innovation reported a 40% drop in payday loans granted in 2020 compared to 2019 levels, and a 30% drop in payday customers. There is a movement towards long-term installment products that oppose short-term payment. It’s a popular opinion voiced by top executives at big projects like the Pew Charitable Trusts Consumer Finance.

Alliance members in government posted obvious declines in their payday loan products and other short-term loans. Despite good volumes of payments and check remittances, people are visiting stores to receive some assistance.

Even online, high cost installment lenders hasn’t necessarily seen a huge increase in business during the pandemic. Just look at the services provided by two of the biggest online lenders, Elevate Credit and Enova International. They announced an increase in profits in 2020. In the meantime, they did not confirm any growth in loans. Both companies reported a significant drop in charges. Does this mean anything unusual to you? They suffered fewer losses on their professional loans. It has to do with a wide range of factors, including current social and economic situations around the world.

How can average Americans benefit from these stories? They can access financial volumes anywhere in the world. They can borrow them and use them for personal and professional purposes. Moreover, they can use them in both short and long time frames.

More Money, Less Online Payday Loans

The government creates a direct economic environment. It demonstrates the biggest drop in in-store payday loans when stimulus checks go to people Bank accounts. The Federal Reserve Bank of New York reports that 37% of Americans are committed to using stimulus payments to cover their debts.

Are there still issues? What do you need to know? The future turns out to be quite bleak. Financial aid is not enough. Due to the pandemic, there is an increase in areas with low vaccination rates. Opponents of high costs fear that people will come back to them.

Along with pandemic relief, the federal government has increased a child tax credit of up to $300 per child. The credit is set to expire by the end of the year. President Joe Biden wants to continue for the next five years. Democrats expect to expand the program in the budget reconciliation bill.

If we look at a long-term chart of Invesco DB Agriculture ETF (DBA), we can see that stocks have broken out above their multi-year cycle trend line. Although stocks appear overbought on the RSI due to the sustained rally that has been taking place for several months now, this in itself is not a sign that a top is near. The reason for this is that the fund’s MACD indicator, which is now well above the zero line, should attract new investors to the fund here. Moreover, there is no significant divergence from the moving averages of the indicator, which means that the probability is high that this bullish trend will indeed continue.

The momentum on the technical chart was fueled by strong asset flow growth that continues to outperform the asset class average. Assets under management have increased by nearly 27% in the last 30 days alone, while the average fund in this asset class has increased its inflows by just over 22%. Although investors may lament that DBA pays no dividends and has an above average expense ratio of 0.85%, this fund has significantly more assets under management (now well over 1.1 billion) compared to other funds in this area.

Suffice it to say that we continue to place a greater emphasis on fund liquidity than competing funds for the following reason. For example, the cost of selling and buying the ETF is directly correlated to the width of the bid/ask spread. If the spreads aren’t tight, you’re essentially paying more for the stock because it’s virtually impossible to get filled halfway through. Sometimes dividend growth investors can overlook this in that every time capital is reinvested into an illiquid fund, profit is essentially lost due to the price paid for the stock.

If we go to the daily chart, we can see that the recent DBA rally has pushed stocks well above their major moving averages. Although volume trends, as well as money flow, remain in bullish mode, the fund’s momentum indicator may hint (where we have divergence) that a short-term bearish move might be at hand. At the end of last year, however, we had a similar setup, but the price of the fund did not act on the momentum divergence. Suffice it to say that we can use the fund’s liquidity and more specifically in its options to improve our odds here from a long perspective.

What we would be looking at here would be selling the July cycle $22 put at par, which is currently trading at around $1.50 per contract. This would give us a cost base of around $20.50 per ETF share, which would bring us back exactly to the fund’s 50-day moving average. Some investors may wonder why we would move to a cycle (July) that is 130 days to expiration when the derivatives industry, in general, is built on shorter-term strategies. Options are usually sold on a monthly or even weekly basis to take advantage of theta decay. So here are some opposing points:

• The most obvious reason is that it lowers our break-even point. Longer dated options have more extrinsic value, meaning the option writer receives more premium when the position is initially opened.
• Also, the longer timeframe gives the investor more time to defend their position. This is where extrinsic value helps us as the value of the option decreases at a slower rate compared to short-term contracts. This is what we want if we actually have to roll these options over (buying them back as cheaply as possible) on another cycle in time.
• All other things being equal, longer-dated at-the-money options have a higher vega than short-dated options. With the July cycle currently showing a VI of nearly 30% (above average for DBAs), a contraction in implied volatility will yield more money (vega) on a relative percentage basis against contracts. at short notice. Suffice it to say that the investor always has the option of withdrawing the contract early if a contraction in theft actually results in a significant reduction in the price of the sales contract.

So, to sum up, Invesco DB Agriculture ETF attracts us for a number of reasons. The fund has more cash than its peers and momentum remains strong thanks to robust growth in assets under management. Additionally, the recent surge in implied volatility allows investors to exploit long deltas here at an advantageous cost. We look forward to continued coverage.

If you are interested in a short-term loan solution, perhaps even for a small amount of money, then you might find it worth looking into payday loans. Like any other loan product, a payday loan involves borrowing money from a business and paying it back with interest.

But these loans work a little differently than other loan products. These loans are designed to be:

• Arranged and Approved Briefly
• Used when you only need to borrow smaller
• Used to borrow for shorter

These loans are generally used for short-term bridge financing. A standard loan, such as a secured home loan or an unsecured loan, can take weeks to arrange and may come with a higher loan limit than you might need. These types of loans tend to be designed to allow people to borrow more money over the years.

Payday loans, however, work more on the cash advance principle. You may, for example, need a few $100 to tide you over until you get paid. You may be short on cash and have an unexpected bill to pay, or you may need quick access to cash right away.

These loans get their name from the fact that they give you a cash advance until you get paid. Used correctly, they are intended to give you almost immediate access to a small loan for a few days or a few weeks. Typically, when you take out a payday loan, your repayment term is set for your next payday.

So, if you take out this type of financing, you will generally find that:

• You can borrow a small amount with just a quick loan
• Your loan application can be processed and paid to you remarkably quickly (i.e., sometimes within 2 hours).
• You pay off the loan later, so you don’t have long-term debt to weigh you down.

It can be essential to think about how these loans are supposed to work before applying. It can be a great way to get a quick and easy cash injection when you need it. But, if you don’t pay it back when you’re supposed to, interest charges can be a problem.

Because of how payday loans work, their fees can be much higher than standard loan fees. However, this may not be a problem if used correctly. Paying off what you borrow on time and not rolling over your debt or continuing to borrow can make this a viable loan solution for you.

How do instant payday loans work?

If you’ve taken out a standard loan before, you might already know that it can be a long and tedious process. You may have to wait weeks to find out if a lender is willing to let you borrow, and it may take years to pay off what you owe. Instant payday loans, however, are designed to be very different.

This is not a review of regular loans. They’re just designed to work differently. Payday loans are based on an alternative system of cash advances and can work very well on completely opposite principles to other loans. For example, they can:

• Grant you a loan for a small amount of
• Enable you to get the money you need virtually
• Don’t put you through endless credit checks and approvals
• Get paid back in weeks (or even days) with a fixed amount of interest added on your next payment

Let’s be honest now. You may have learned that payday loans have high interest rates (here CreditNinja’s take on interest-free loans). This is perhaps not so surprising considering the benefits they can bring to you. They can sometimes cost more, but you usually won’t suffer if you manage your loan properly. By repaying what you borrow when it comes due, you are simply paying a fixed amount in addition to your loan amount.

Failing to repay like you’re supposed to, however, may be when this type of solution costs more. But, if you use Instant Payday Loans in the right way, that may never be a problem. For many, the advantages of this type of short-term cash advance far outweigh the disadvantages.

You may not have to go through a lengthy credit approval process for this type of loan, but you may need to check some boxes before you can apply. The criteria established by a payday loan company may vary, but generally you may need to:

• Work full time.
• Earn more than a minimum amount each
• Have a bank account with a debit

Instant payday loans may well be a quick and easy loan solution for those who only need a small loan for a short period of time. These loans can be an alternative to consider if you ever find yourself in this situation.

Why do people use a payday loan?

Needing to borrow money isn’t always about borrowing a big to lend for a long time. Sometimes you may need a smaller loan just to get you through a few weeks or even days. This is where a payday loan can come in handy.

There are many different reasons why consumers choose to use a short-term loan over the more complicated or longer-term standard loans. For example, you may need to borrow a smaller amount for a shorter period because you:

• Bring in an unexpected bill
• You have to pay for something you didn’t do
• Having a busy month of expenses and needing a little extra cash to tide you over
• Find a good deal that you need money for immediately to buy it, but you don’t have spare money until you get it next time

A payday loan is unlike other types of loans in many ways. This type of loan is more designed to help you:

• Borrow smaller sums (i.e. hundreds rather than thousands of pounds).
• Get a loan in 24 hours or
• Bypass standard loan approval and waiting procedures
• Borrow money that you can then pay back the next time you get

This type of loan is suitable for many people who need to borrow money, but find that their loan needs do not match traditional lending methods. Say, for example, you see a discounted vacation deal that’s only available for a few days. If you do not get a deposit by then, the offer will be closed.

You may not have the money available now. You may be a few weeks away from your next payday when you will have access to the deposit money. But you might not be able to get a bank to lend you the small amount you need, and they doubt they’ll approve a loan on time anyway.

A payday loan may be an alternative to consider. It could give you the money you need in a day. All you have to do then is pay back what you borrow plus the interest charges charged, and you’ll be sorted.

Struggling to fund an emergency? What should you do if you need money right now? First of all, assess the situation and do not make hasty decisions. Payday loans play a good role here to help you pay off your debt and spend the necessary amount of money for emergency expenses.

We recommend the option of taking out a payday loan DirectLoanTransfer if you have a short-term disruption to your finances. Thus, you can repay your debt in just one to two months and calmly continue to pay your loans on time.

More often than not, we find ourselves in a financial bind. Suppose you spread yourself too thin and exhaust your borrowing options. Now what? Let’s take a look at 10 good reasons why people take payday loans.

Reasons to get a payday loan

1. When you can’t afford major purchases

A client took out payday loans to buy new appliances, a cell phone, a fur coat for his wife, a car and winter tires. He was able to finance all of these purchases with payday loans while saving money to pay for his personal needs and necessities, such as food, gas, and clothing.

2. To avoid empty pockets

Over the past 15 years, a customer has taken out about 10 loans to buy a camera, two tablets, two phones, and new furniture. Taking out payday loans allowed her to buy what she needed and still have money in her pocket. These were well-calculated decisions that helped the client get the necessities without spending all her money.

3. Out of madness

A customer broke his phone. Unfortunately, he had no savings, so he took out a loan. Therefore, the customer filled out a request directly in the store, but only one bank responded. The fees and interest rates on this bank loan were thousands of dollars more than the original amount he had borrowed. After this realization, he decided to look into payday loans instead. The client received money instantly and didn’t have to worry about trailing payments that accrue interest. With payday loans, he got his phone and paid off the debt in just one month – easy and hassle-free!

4. If there is not enough will to accumulate

Let’s say you took out two payday loans, the first for remote programming lessons and the second for a digital piano. One has already been paid, the other is being paid. There is not enough will to save on such acquisitions. Each time, think carefully about the need to apply for a payday loan. Consult specialists from different banks and don’t forget to consider different payday loan offers. Due to this, thanks to the training, you will receive attractive offers of personal loans from the management, and the piano will become a source of additional income.

5. To raise the standard of living

A payday loan is a great opportunity to get an item at a discount. You can close the debt on the first payment, saving a little. Credit cards help you get certain things without overpaying but a little earlier. Payday loans will help you raise the bar on quality of life. It is not because there are things that are borrowed. Indeed, you will start thinking in slightly different numbers with a payday loan.

6. Live until the next paycheck

Payday loans can help solve urgent and unexpected financial difficulties, but sometimes high rates and overpayments can create long-term problems in a family’s budget. Now we have to work for the loans. All the money is divided into two categories: repayment of the loan and somehow stretching the salary.

7. In order not to constrain oneself in desires

Payday loans can be taken on a whim. For example, if you suddenly wanted to renew your fleet of vehicles and it was uncomfortable to withdraw the full amount of traffic and savings, even if formally there was such an opportunity. You took about a few thousand dollars for six months for an iPhone. You can afford to take out a payday loan. You could take it for a wedding so as not to be afraid of desires, which is about 700,000 for three years.

A personal loan is a practical tool if it is not coerced. If credit money helps accelerate the rate of capital growth or get the feeling now and pay it back later, then that’s a good reason to agree to take out a payday loan.

8. In order not to choose what to buy

When repairing an apartment, money is needed for plastic windows or TV. Suppose you need to borrow several thousand dollars for a television. Let’s say it would be a shame if you gave more than five thousand a month, but the way of life will not change. It is likely that you will not regret having taken out a personal loan. Nevertheless, in the future, think about how you could save in advance.

9. To spend money on the most important

Suppose you have taken out many small loans that could amount to hundreds of dollars. You close one and immediately organize the next, for example for studies, treatment, travel, expensive furniture or equipment. In general, for whatever is most important. Additionally, you can use a credit card with a limit of a few thousand. Loans are always closed ahead of schedule in two or three months while spending money on useful and necessary things that you could not save for in any way and not on momentary pleasures like a bottle of expensive alcohol or unnecessary clothes.

10. When there are no other options

Let’s say the roof of your house was in a terrible state. Suppose an urgent repair is needed, but it would be impossible to save such an amount even if the whole family saved the entire salary. Then a payday loan is a very good option.

Are installment loans and payday loans the same thing? When people need money right away, they often fail to shop around and evaluate loan options. However, the repercussions of rushed loans can be serious. For this reason, we will analyze and discuss the differences and similarities between two common types of loans: payday loans and installment loans. So here’s what you need to know to make smart credit decisions and avoid doubling your debt.

What is an installment loan?

We’ve all undoubtedly used different types of installment loans, even though the phrase “Paymentis unknown to us. It is a kind of loan in which you borrow a certain amount of money and then repay it in monthly installments. Typically, these loans have a fixed repayment schedule, which means the monthly payment amount remains constant for the life of the loan. As a result, borrowers can simply organize their budget and loan repayment will not be a surprise as payment day approaches.

Common Examples of Installment Loans

Installment loans come in different forms:

They can be secured or unsecured, may have different repayment terms and APRs (Annual Percentage Rates). So whatever you’re looking for, it’s a good idea to compare interest rates https://shinyloans.com/articles/difference-between-nominal-and-real-interest-rate and repayment terms to find the one that suits you best. The most popular types of installment loans are:

Car loans:

These loans are granted to finance a new or used vehicle. These loans have a collateral when you secure the borrowed money against the acquired automobile. The repayment periods for these loans generally range from two to eight years.

Student loans:

These types of installment loans are usually unsecured and help pay for undergraduate, graduate, and other types of post-secondary education. The advantage of student loans is that you don’t start your payments right away. instead, you take the money, pay your tuition, and pay it back when you graduate and work.

Mortgages:

Mortgages are provided to make major expenses, such as the house. The purchased property also secures these loans. Mortgage repayment terms typically range from 10 to 30 years.

What is a payday loan?

The question most often raised is that of the payday loan. These loans are becoming increasingly popular due to their wide availability. Advertisements for these small loans spread across the internet, attracting more borrowers. Payday loans are short-term loans lasting several weeks. These loans, also known as cash advances, are popular among low-income borrowers and those with a history of credit failure. Unfortunately, because they have high interest rates, it’s easy to get into debt.

Installment and payday loans: main distinctions

Let’s start by noting the distinctions between these loans. Therefore, the basic distinction between a payday loan and an installment loan lies in the repayment terms, payment mechanism, and loan amounts.

Reimbursement deadlines:

A personal loan is a very short-term loan with a maturity of usually less than one month, while an installment loan is at least two years old.

Payment forms:

Payday advances must be repaid in one large payment. But installment loans, as the name suggests, are paid in monthly installments over a set period of time that can range from a few months to several years.

Amounts borrowed:

These two types of loans mainly vary in the amounts available. The amount borrowed for payday loans cannot exceed $2,500, while installment loans are available for higher amounts.

Interest rate:

Installment loans generally have lower interest rates than payday advances.

Availablity:

Payday advances are easily accessible compared to installments.

The Similarity Between Installment Loans and Payday Loans

Despite the distinctions mentioned above, these two loan types also share some standard features:

The absence of a surety:

A basic similarity between payday loans and installment loans is that they are both often unsecured, meaning there is no property or collateral to back the transaction. In other words, if you fail to repay the borrowed money, the lender cannot seize your secured property.

Online processing:

Although installment loans are often granted by traditional credit institutions. (Banks and credit unions). They are increasingly available online through internet lenders. Accordingly, you can apply for these loans from anywhere and anytime.

No credit check:

Indirect credit drawdowns may occur in addition to hard credit drawdowns for online installment loans. Also, because internet lenders often do not set strict qualification standards for accepting these loans. Moreover, even consumers with poor credit could benefit.

When choosing between a payday loan and an installment loan, the latter is always the cheaper alternative. However, if you are denied an installment loan, you can always consider payday loan options.

Are installment loans and payday loans the same thing?