Sunday, August 26, 2012

Asking Questions About Payday Loans and Other Financial Transactions

If you find yourself in a financially trying situation, you may need to withdraw a payday loan in order to make it to the next paycheck. Despite the negative stigma often associated with such loans, they can be a helpful way to get monetary matters settled when your next paycheck is too far away. Thus a trip to your local lender need not be a bad experience, and in order to make sure that it is not so you will want to be well informed. Unfortunately, this is where many payday loan experiences often go awry.

Consumers have an unusual and potentially troublesome habit of failing to ask questions when performing a financial transaction. This can lead to a misunderstanding in what the consumer is buying and how much they are paying for it, particularly in more complicated transactions such as loans, where the true costs and rules are often shrouded in legalistic language. However, by asking questions you can make a better informed decision and have the best loan experience possible.

Of course, the first question that comes to mind whenever dealing with money is 'How much does it cost'? While this may seem apparent at first, often time's expenses are hidden in the fine print that end up raising the final price of your transaction. For this reason, you should not only ask whomever you are dealing with how much his or her services costs, but what the final amount is that you can expect to pay after fees, interests, etc. This will give you a more realistic idea as to how much you will spend, thus better enabling you to make a decision concerning whether you want to complete the transaction or not.

Another question you will want to ask, especially when taking out a payday loan, is what are the stipulations of said loan and what will happen if these stipulations are not met. Specifically, you will want to know how much time you have to pay back the loan and what will occur if you cannot make repayment in this allotted time. This is important information to know for any financial transaction, but particularly important in the case of payday loans, as repayment schedules can be quick (often as little as two weeks) and fees for failing to repay in time can be steep.

There several other things you may wish to know when taking out a payday loan. For example, you may be concerned about how said loans will affect your credit, what legal actions you or your lender may take against each other if one of you fails to fulfill the contract, etc. These are legitimate concerns and should they or any other questions come to mind, do not be afraid to ask them. Remember, you are a customer, and as such you deserve good customer service. Be clear when asking your questions, and accept only clear answers.

A legitimate payday loan lender will be more than happy to alleviate any concerns you may have by giving you the information you ask for. By staying well-informed, you are better able to make good decisions in your financial dealings. Asking your lender any question that you may have will ensure you a positive experience at their office, making them a happy proprietor and you a happy customer.

Sunday, August 19, 2012

A Tweaked Version of Payday Loans Being Offered in Limited Areas

A new spin-off from payday loans has filtered into Hispanic communities in Southern California and Texas. This new tweaked version of direct payday loans stems from a Stanford student, James Gutierrez. His business school project focused on single-digit interest rates for high risk loans to be paid off over 9 or10 months instead of just a few short few weeks.

The new payday loan model is set up at a small kiosk within small Hispanic supermarkets. Agents offer unsecured loans to those who need some fast cash when there is little to no credit built in to obtain other types of financial help. The loans are still much more expensive than bank loans, but they are helping people in small Hispanic communities get access to much needed cash. Often times, people will take out a small loan in order to get groceries or pay for vehicle repair. The money is most often used within the same community strengthening the community's economy.

These new payday loan lenders already deny about 50% of its applicants and in turn have a very low default rate. Lending to someone who does not have the means to make the payments is following best practices rules. There are many online loan lenders who good business policies of keeping rates lower than the state caps. Lenders who look at direct payday loans as opportunities for people, who have nowhere else to go to make ends meet, will offer better rates. There are many companies who look at loans only as potential profit, and their rates will follow state caps. There are those predatory lenders who do not follow any type of rule or regulation but will prey on those who need extra money fast by offering larger amounts. Extremely high interest rates coupled with unaffordable loan amounts create big trouble for those who accept the loans.

Borrowing money from an aggressive or predatory lender will also put you more at risk with dealing with possible fraudulent companies. Steer clear of a lender who will offer you loans when the majority will not.

Payday loans online, brick and mortar, or now at conveniently located kiosks in limited locations, are still a high risk loan to those with poor or thin credit. People with good credit do often use these low cost loans to help out a financial crunch. These borrowers tend not to go into default. The debt struggle tends to fall on the laps of people who have no secure payoff plan or are loaned money without proper income to back up the payoff.

The battle will continue between opponents and promoters of the low cost payday loans. Opposition will keep governments trying to restrict the payday loans process and in some areas ban them altogether. Those for the fast cash opportunity will fight for the rights of people to keep options available to use at their own discretion. The argument that people who use these types of loans may fall into the low income bracket, but it does not mean their intelligence is low. Financial solutions are options and it is up to the borrower to find the one which fits their finances the best.

Sunday, August 12, 2012

The Evolution of the Payday Loan Industry

The payday loan industry has been getting a lot of attention recently. Many Americans have only recently learned about these lending agents through television commercials and advertisements, but the industry itself has a substantial history that predates the advent of the TV.

According to a PEW analysis of the history of payday loans, the industry stems from an over hundred year old practice of salary lending, wherein an individual could borrow against his/her salary for substantial interest. While payday loans are similar in this regard, the industry has evolved over the past one hundred years, with government regulations making these businesses more transparent and online availability making these services more accessible.

Unlike salary lending, payday loans are legal in most states. At the turn of the century, borrowing from a salary lender could cost someone his/her reputation, job, and money. Things have certainly come a long way, as these days payday loan lending is now mainstream, legal, and government regulated.

Regulations started early in the 20th century; in 1916, the Uniform Small Loan Law proposed a cap of 3.5 % monthly interest on loans of less than $300. While all the states did not comply with this low interest rate, two-thirds adopted the law with revisions, charging between 18 to 45 % interest on small loans. Regulators hoped to encourage the populace to seek out more reputable, licensed lending establishments, but, despite their efforts, the industry continued to grow.

The influx of consumerism in the middle of the 20th century led to the federal deregulation of lending laws in the 1970 and 80′s. When the federal government eased up on the regulations for mortgage lending, credit cards, and other lending businesses, they essentially made it possible for state licensed payday loan lenders to emerge. Following in the footsteps of the feds, the states began to allow state-licensed lenders to offer high-interest, deferred transactions, wherein a borrower could write a post-dated check to secure a loan--for a cost. And so began the payday loan industry as we know it today.

In the past 30 years, the industry has seen tremendous growth, with expansion beyond onsite independent lenders to big banks and online providers. For instance, earlier this year Wells Fargo Bank began offering payday advances, while many companies have taken to the internet. Online lenders have gained popularity due to the convenience they provide, but many are wary of such providers as they are less regulated than their onsite counterparts.

Undeniably, payday advances are still viewed critically by much of society; the high interest rates and short payback periods make such loans dangerous to many consumers. However, with state level regulations, the industry has gained a lot of credibility. Many states have outlawed payday advances altogether; these are dubbed restrictive states and they have very low reports of loan reliance. In hybrid states, those that allow lending but with more regulations, lower fees, and more transparency, payday advance reliance is significantly less prominent.

Even in permissive states, which have less regulation than their restrictive and hybrid counterparts, payday loan businesses have gained reputability. Many lenders are responsible and transparent, seeking to provide loans with their intended purpose: to help people in times of emergency. When used in this way, these advances can be useful. When abused, however, they can cause a lot of harm to one's credit (financial reputation) and finances, much like their predecessors: salary loans.

Sunday, August 5, 2012

Retailers And The Holidays - Is This The Right Time For A Payday Loan?

The holidays are approaching and some of us may find that our pocketbooks are cringing. Americans are gearing up to spend as always but will shop till they drop? This may be the time for a payday loan.

Americans love to shop, especially around the holidays, but money is tight and now is a good time for that extra cash from a payday loan or cash advance. Being able to buy that treasure for your loved one will not only put a smile on their face but on yours. Retailers are expecting a rise in spending this year and we all want to be part of the holiday cheer.

Consumer spending is important to the American economy but with so many of us experieincing empty bank accounts, how do we keep up our holiday cheer via retail bliss? A payday loan can put that much needed money in your account on the very same day you apply and are regulated so the borrower can usually receive anywhere from $50 to $2,000 overnight. The borrower must have a job, an active bank account and be over the age of 18 to be able to secure a cash advance.

It is important to America's faltering financial situation that the traditional shopping season goes well but the mindset of Americans can be judged by their spending habits. If you do find yourself needing to take out a payday loan, you don't have to be embarrassed. You can find one online and only you will know about it. Online lending is safe and easy. Just be sure to find a licensed insured payday lender so your experience is a pleasant one. The licensed lender will be able to explain the terms of your loan to you clearly so that you fully understand what is expected as far as repayment goes.

None of us need worry for the holidays. We want to shop and enjoy without the stress of the borrowing process. With the repayment date of the cash advance on your next payday, your loan obligations will be over soon. You even have to remember to make your payment because the insured lender will automatically debit your bank account on the due date for the full amount of the loan.

This is a challenging year for the country. Americans are filled with uncertainties about jobs, homes, gas prices and a longer recession. Yet, we still want to buy that special gift for our for our son or daughter and take that trip back east to see Gramma. A payday loan is not a challenge. It is a great advantage during this holiday season especially with all the hustle and bustle. Don't let this be an overwhelming challenge and concern. Find a payday loan, learn the terms, realize that the interest will be high and the repayment date soon, and don't bite off more than you can chew. Enjoy the giving season while making those you love smile.

Wednesday, August 1, 2012

Stop, Look and Listen With A Payday Loan

We live in a generation where people live on credit. Instant gratification, when it comes to money at least, is something too many of us have become used to. Mortgages, car loans, credit cards, and student loans are just a few ways people borrow on credit. The problem with these loans is that most of the time they are secured. Meaning, if the borrower goes into default on the payment, the creditor has something to take away from them. These loans do not prove helpful in cases when someone needs instant cash.

Nowadays consumers turn to cash advance and payday loans online to get instant cash when there is a financial emergency or unexpected cost. Given the popularity of such loans, the market is flooded with payday loan providers. This is great for payday loan customers because it keeps the terms, conditions and interest rates charged by lenders very competitive. On the other hand, amidst many genuine lenders, there can be lenders known as "predatory" who seek to give out a loan at any cost; even when it means putting the borrower into financial jeopardy.

Unsecured online payday loans are a great solution to getting cash fast. Over 12 million people use these loans every year. Because of the ease and convenience of the process, reliable and trustworthy payday loans can be effective if used for the right reasons. Finding a reliable lender is as important as getting the instant cash you need.

It doesn't require any financial expertise to note the do's and don'ts of applying for a payday loan with a credible lender. Educating yourself on the basics of payday lending will help you feel better if you apply for and receive a loan. Meanwhile, when you need cash in a hurry, do not make decisions in haste. Take a few minutes of your time to look at all of your options. Payday loan lenders who adhere to state rules and regulations will be the most honest and trustworthy.

Getting references from friends, relatives or colleagues who have utilized the services of a payday loan provider can help you in getting instant cash. You can get helpful information about providers of payday loans with the assurance of knowing someone who has gone through the experience. Visiting the Better Business Bureau's website to see if there are any grievances against the lender can help you stay away from predatory lenders. Reading opinions and reviews about lenders will help a great deal as well being that these are usually written by people who have gone through the lender for a loan.

Don't just choose the first lender that pops-up on your computer screen. Go through their website and look at their "FAQs" page to get some answers to their most commonly asked questions. You can even take a few minutes to call certain lenders and ask then about their loan practices, policies, and procedures. Any good lender will be happy to answer you questions. Should they seem hesitant, take that as a warning sign that they may not be credible.