The payment of a deferred annuity may be made in one sum, or it may be broken up into a number of small payments at regular intervals. You can, by a slight increase on the payment for a deferred annuity, secure the return of the purchase-money to your representatives in the event of your death before the commencement of the annuity, or to yourself, should you for any reason wish to be out of the bargain.
A word of advice is given by a sensible writer to all who are life annuitants. “They should bear in mind,” she says, “to live well within their income, as generally the whole of their money is one of life interest, and there will be no fund to fall back upon to pay funeral expenses, doctors’ bills, wages, etc., when they die, but their savings.”
Fire insurance, life insurance, and the purchase of annuities are amongst the sensible transactions of prudent and saving people. But sometimes the prudent and saving, quite through innocent misfortune, come down in the world, and have a difficulty in making both ends meet for the present, let alone providing for the future. Under these circumstances people without much experience, and especially women who are not business women, are very apt to fall a prey to the wiles of the professional money-lender. To the artful ways of the money-lending fraternity we shall devote what remains of this article.
If anyone is in want of a little ready money she has only to turn over the morning papers, and she will there see a score of advertisements headed “Money,” and all offering “loans on easy terms.” How is she to know, unless she has been told, that these petty money-lenders are one of the most serious evils of our present state of society, and that there are hundreds of them preying on the ignorance, the impulsiveness, and the necessities of their fellow-creatures?
“There is considerable variety,” says a writer in the Leisure Hour, “in the bait used by these angling money-lenders, but great sameness in the general form of the cruel hook by which poor silly fish are caught. Some of the advertisements are from ‘loan offices,’ others from ‘private gentlemen’ who are ‘willing to advance money’ and who have ‘no connection with loan offices.’ They all seem to have unlimited resources, from £2 to £1,000 being at the disposal of every borrower. The invitations are to respectable persons, male or female, in town or country; distance no object; personal application preferred, but not necessary. ‘Strict secrecy and prompt despatch’ are usually promised; answers to application ‘by return of post’ and money sent ‘at a day’s notice.’ So obliging are these gentlemen, ‘forms will be sent gratis,’ and in some cases the borrower is assured there are ‘no law costs’ and ‘no office fees.’ More convenient still there are ‘no securities required.’ To borrow is an easy matter after all.
“But of course there must be securities of some sort. Well, the borrower’s ‘note of hand’ is sufficient, with deposit of deeds, leases, life policies, or, if preferred, a bill of sale on furniture or other goods ‘without removal’ (i.e. at the time of borrowing). Then the repayment may be by ‘easy instalments.’” How accommodating!
Many of these assertions the needy borrower will find abundant reason to doubt before the loan is completed. On application she will be puzzled to reconcile the terms named to her with those in the alluring advertisement, and will find the rate of interest to be truly “five per cent. and upwards,” fifty per cent. being no uncommon demand, in addition to expenses connected with and deducted from the loan. Should she complain about the expenses, she is usually told that they are rendered necessary by the existence of some special risk in her particular case.
The writer whom we have just quoted tells a sad story of a poor widow lady, who, being pressed for her rent, saw a money-lender’s advertisement and answered it. The money-lender came, and obtained the lease of the house as a security, “only a form, you know.” He was such a polite, kind man; and interest, she understood, was to be only £5 per cent.
Soon after the widow had an offer for her house and furniture, so she went to redeem the lease held in security by the money-lender. The poor woman, who had signed the papers presented to her, either without reading them or without thoroughly understanding them, then learned for the first time that “£5 per cent.” did not mean £5 a year for the loan of a hundred pounds. The money-lender’s advertisement did not say “£5 per cent. per annum.” He lent his money at £5 per cent. per month, or £60 for a year for £100, besides various fees and charges. The moral of the story is that it is very foolish to have anything to do with money-lenders, and that it is still more foolish to go into any transaction without making perfectly certain as to the exact amount for which one is liable.
There are some money-lenders who only pretend to lend: as a matter of fact, they never do. Their profits are derived solely from booking fees, office expenses, and charges for the sham “inquiry,” which always is of so unsatisfactory a nature that the loan cannot be granted. It is true the advertisements of these gentry often state that no preliminary fees or office expenses of any kind are charged. The borrower, however, is in such cases informed that these payments are dispensed with only in the cases of certain classes, in none of which, we need hardly say is she fortunate enough to find herself.