Payday Loans, A Viable Option?

What are payday loans?Payday loans are short-term loans that are extended between two pay days. A payday loan is normally provided for 14 days. The borrower, on acceptance of the loan conditions, provides a check favoring the lender as security against the loan. On the due date, the lender deposits this check to recover the loan dues. The due date is generally the next pay day of the borrower. No credit checks are conducted for granting payday loans. Therefore, the FICO score of the borrower is irrelevant. It doesn’t matter whether the borrower has a bad credit history, or has no credit history, or has declared bankruptcy.Qualifications for payday loansTo qualify for a payday loan, the borrower needs to fulfill all of the following conditions. There are no exceptions.o You must be a US citizen.o You must at least 18 years of age.o You must be at a full time job currently and must be at this job for at least three months.o You must either have an active checking account or a savings account.

o Your after tax salary should be at least $ 1,000 or you must have a fixed income of $800.Cost of payday loansPayday loans carry a very high cost. Generally the lender fees for a $ 100 payday loan is anywhere between $15 and $25. It should be remembered that this fee is for 14 days as the loan itself is extended for these many days only. If one considers the cost on an annual percentage rate (APR) basis, the average is 391%, which by any standard is exorbitant. By law, it is mandatory for the lender to specify the APR to the borrower. Many lenders do compare the cost of payday loan against other forms of financing; but the common denominator of such a comparison is that all of them are very expensive.When to avail of payday loans?Payday loans should be availed only during emergencies. Considering the fact that the cost of carrying a payday loan is very high, it should be a resource of last resort. If one implements good budgeting techniques and has a good financial plan, the need for borrowing by way of payday loans can be minimized. Moreover, one must ensure that a payday loan is paid on time. Payday loans should not be rolled over or extended as within no time the borrower will find himself or herself in a debt trap where money may have to be borrowed just to repay the interest.Profile of a payday loan borrowero A typical payday loan customer is between 25 and 40 years of age with an annual income anywhere between $ 25,000 and $ 50,000.o According to the US Census report of Year 2000, the results of the payday loan borrowers survey are:22% of those surveyed hold a bachelor’s degree.51% of those surveyed have a retirement savings plan.In excess of two-thirds of those surveyed have a savings account.More than two-thirds of those surveyed have an annual income of at least $ 25,555.Why are Payday loans popular?They are popular for a number of reasons such as:o Credit checks are not required. The personal check that you make payable to the lender acts as security.

o Approval is quick. If all the necessary documents are submitted, your loan application maybe approved in minutes.o The paperwork involved is simple. Generally one or two documents would suffice which explains the loan process and your obligations.o The repayment process is without hassles. The check submitted as security is encashed on the next payday by the lender. You could extend the loan to subsequent paydays for a fee. However this is very expensive.o Easy availability. Payday loans are particularly appropriate for emergency situations provided the amount required is small and one is willing to bear the high cost of the loan.In summary, payday loans might be a viable option if you need cash and need it fast. You still should be careful who you are working with to obtain your loan. If you don’t need money right away, there is probably a better solution for you.

Acquiring Financial Liberty Doesn’t Have to Be Hard

Do you need Great Ideas On Getting OUT of debt? If you do, you are not by yourself. Quite a few wish to accomplish economic liberty, however may not be sure of how to go about accomplishing this. The first thing you could do is request the initial credit contract from each creditor. They need to be in a position to produce this particular paperwork if they want to win over you in court. If your financial debt has been passed from business to business, they may not be capable of producing these documents. Whenever they are not able to do so, you’ve got the right to fight the debt. Another option will be to declare bankruptcy to obtain economic freedom. While you will probably be required to give over any financial assets you have, there are ways to protect the resources you actually have. Caution needs to be taken if you select this approach, but it is a solution to think about. In addition, you may decide to invest the funds you’ve got, enabling it to provide you with cash. The cash you make when you choose this method could then be employed to pay your debt downward. There are many ways to get from under a massive stack of personal debt. Pay a visit to http://www.personalfinanceninja.com/how-to-get-out-of-debt-without-using-your-savings/ to understand more about these tips to help you acquire the relief you would like and demand in the shortest time doable.

The Benefits of Payday Loans

Payday loans are becoming more popular, and more in demand, as the credit squeeze continues. But can you afford to take one? That is a question that many people ask of themselves. And rightly so, because unless they go about it the right way, they can end up paying a massive amount of interest.So, if you feel that you need a payday loan how should you go about it? First, don’t opt for the first online advert you see. Not all payday loans are the same, and you can usually get a deal that suits you. You should look for a deal that has a limited ‘rollover’ period.Although a payday loan should strictly be repaid next payday, many people find themselves unable to do so and it carries on for another month. That is when the rollover comes into play. The rollover involves another fee payment. You don’t pay interest as such with a payday loan: you pay a ‘fee’. For example, with a payday loans of $400 you could pay a $50 fee. That works out at an interest rate of 25% a month, or an APR of 300%. If you miss the payment, then you pay a rollover fee of another $50, so that your APR has suddenly risen to 600%. So a payday loan can be very expensive unless you make sure that you pay it. So, how do you do that?

Simple. Make your payment by direct debit from your bank on payday. Make sure that the direct debit is dated for your payday, or as close as possible to it, and you will always have money in the bank when the payment is due. If you are paid on a certain date each month, make the direct debit for that date.The definition of a payday loan is that it is paid back on your next payday after taking out the loan. If you know your payday after taking the loan then you can arrange a direct debit to be applied on that date, and the payment will be made before you can access your account. That way there will be no temptation to spend the money before you pay it back.If payday is a Saturday or Sunday, then you will be paid on the Friday, so arrange the direct debit for the Friday. If you have taken the loan out close to payday, you might have made an arrangement to pay next payday: in that case the same arrangements will apply.If you ever make an arrangement to make repayments over a number of months, then it will be difficult to arrange a single direct debit date, and that kind of payment is not variable: it is made on the same date each month. Many people I know come to an arrangement with their bank in such situations.You can open another account with your bank after discussing your problem with them, and arrange the bank to transfer your payment to that account on payday, and then have the direct debit remove that for your payday loan repayment on the 1st of each month. I know this all sounds a bit complicated, but it works for many people, and helps them to keep clear of rollovers that can end up with them owing more than they borrowed.

However, payday loans have many benefits if you are able to make the payment at the right time. It will give you emergency cash when needed, such as an emergency car repair or medical bill, and allow you to pay it back next payday. How often have thought ‘I could pay that in a couple of days – I wish it were payday today’? Well, payday can be ‘today’ with a payday loan, arranged the same day, or at least within 24 hours.So payday loans do have benefits to those that need them, and if you need one then think carefully before taking it, and make sure you get the best deal. The take it and use it well.