Escaping the Payday Loan Trap

An Economic Sign of Trouble

Getting caught in the payday loan trap is common In today’s economy. With gas prices approaching $4.00 per gallon, food prices rising at record rates and health insurance costs rising as much as 20 percent in one year, there is one relatively new industry that is flourishing by feeding off the financially challenged. The payday loan industry is experiencing tremendous growth in recent years. Virtually unknown only several years ago, the loan stores are opening up almost daily in every low and middle income neighborhood in the states where they are legal. The internet has virtually thousands of sites where anyone, with a job and direct deposit, can get a loan deposited directly into their account with no credit check. The internet lenders are generally more predatory in nature than their storefront counterparts as they are not regulated and can charge interest rates that would be usurious and illegal in any other financial industry. Many of them allow customers to rollover their loans until the next pay period for a fee rather than paying it off in full. Some actually make it extremely difficult to pay in full by requiring 72 hour notice by fax prior to the ACH withdrawal date. They know that most people do not have faxes in their homes and will generally will not remember to do it. For example, if George takes out a 500.00 loan on the internet and agrees to pay back 600.00 on his payday by allowing the payday loan company to ACH debit his account, he will receive an email stating that his loan is due on the 15th. This email is sent on the 11th and says, if he wishes to pay the loan in full, he must fill out and email, or fax, the attached statement within 24 hours. It is Sunday and he does not see the email until Monday morning. He is now at work and tries to fill out the form on line to email back but cannot type in the blanks. He does not want to print it for fear of his coworkers seeing it so he waits until he gets home. Now it is too late. The company will take the 100.00 from his account and he still owes them 600.00 on the next paydate. The problem now is his rent is due on that date also.
Getting Trapped

The 1st of the month is quickly appoaching and George begins hearing a noise from the front brakes in his car. He takes it to the shop and is told that he waited too long and they have to cut the rotors and replace the pads. They also disovered his brake lines to be dangerouly worn, Total cost 375.00. He has no choice but to pay. Now, between rolling over his 600.00 loan again and subracting the cash for his repairs, George has found himself short of the rent. So what does he do?. He goes back on the internet antd takes another loan from a different company for $300.00 more. Now he owes 900.00 with 300.00 due on the 15th from the second loan and 600.00 also due the same day on the first loan. However, this time, he realizes that the 600.00 has to be paid in full as only two rollovers are allowed and the 300.00 he can rollover at a cost of 60.00. There goes most of his check leaving him short of his utility bills and car insurance so he starts to panic and takes a third loan for 500.00.

As a moderator and counsellor on a prominent website dealing with debt, it is not uncommon to see guests who come there looking for help with as many as a dozen payday loans or even more. Some of them have paid as much a $1000.00 on a $300.00 loan. They are ashamed and scared to a point of insomnia and can no longer focus on anything, including their jobs. One person, as I learned later, had become suicidal. It is a very difficult situation but there is a way out. The poverbial light at the end of the tunnel does exist..

Escaping the Trap

The very first thing a person should do to get out the the payday loan trap, is to list all the loans they have by category (internet or storefront) the amount borrowed from each and the total amount paid to each, including interest and rollovers. The next thing to do is to check the lending laws of the state you live in to determine the maximum interest allowed and are rollovers permitted. Contrary to what the lenders will tell you, most states require lenders to be licensed in the state, regardless of their geographic location, and must abide by the laws of that particular state. Most, but not all, internet lenders are not licensed anywhere and many are located offshore with only mail drops in the US. Wilmington Delaware has a huge number at a Mail Boxes Etc.there due to the the states soft lending laws. A helpful site for this info is http://www.paydayloaninfo.org/.

After you have determined the above, you must see if any of them are members of the CFSA, a membership organization of payday lenders. These will almost always be the storefront lenders. Their members are required, under the membership rules, to set up payment plans for those who are in trouble. You must however request a plan before you default. Because the storefronts are legal operations, and abiding by state laws, you are required to repay your loan and interest or they can sue you for the amount plus attorney fees and court costs. Contact them and tell them you need to make arrangements and they will usually be obliging..

The next step out of the payday loan trap is to close that checking account before the next pay date and ask your payroll department for a live check for a while until you feel it is safe to open a new account. Do not let any of the internet lenders know in advance of your plans or they will hit your account immediately. You must then send a letter to each of the lenders revoking any wage assignment agreement you may have signed and give a copy to your payroll department. Wage assignments are not garnishments and can be legally revoked by the signer at anytime. The lenders will still send the assignment to your employer, regardless of the revocation, but at least you will not have your paycheck handed over to them. You must also check with your bank to be sure they will not force open your account if an ACH withdrawal comes through after you close it. Once you have done all this you have your life back and can make the internet lenders deal with you on your terms and not theirs. Remember to never give them any new account info or card information. They can clean you out. Pay them only by money order, wire or preypayed debit card.

You have at least a moral obligation, when caught in the payday loan trap, to pay back what you borrowed plus interest under the laws of your state. Make it clear to them in writing that this is what you are paying and not a cent more. You can expect nasty phone calls, threatening you with arrest at your job and all sorts of other illegal nonsense, of which they cannot follow though. Do not allow them to intimidate you. Stand your ground. Some will turn you over to third party collectors. If that happens you must send the collector a debt validation letter asking them to prove that the debt is yours, how they arrived at the amount and that the lender is licensed in your state. Nine times out of ten you will never hear from them again. Remember if an internet payday lender is illegal in your state they will not have the power to collect there and they know it. They will resort to intimidation as their only recourse. The few that are licensed will be much easier to deal with and will usually come to a settlement agreement with you, For those who choose the path of harassment, send them certified, cease communication letters and do not hesitate to file complaints with the Better Business Bureau, the Attorney General in your state and the state where they say they are located, the financial regulatory agency of your state and the FTC.

Remember, if you are ensnared in the payday loan trap, that most payday lenders are predators and their sole purpose for existence is to suck as much from their financially vulnerable victims as is possible. Escaping them is traveling an avenue that is difficult and stressful but it is the only road that will lead to freedom from the snare that that entangles so many in this era of economic turmoil.

How To Sue A Payday Loan Company

Dealing With Debt Collectors

Payday loans are among the most easiest of loan types that anyone with a full time job and a regular stream of monthly income can apply for. Payday loan providers often do not carry out credit checks on their applicants and this makes them quite attractive to a lot of people who often fall short of funds halfway through the month. However, as easy as they may be to apply for and actually get the money, things start getting unpleasant when you fail to repay what your borrowed in a timely manner. Payday loan companies are often among the most aggressive of loan providers when it comes to debt collection.

Know Your Rights
Regardless of what your purpose of loan application may have been, if you borrowed from a payday loan provider and are currently facing harassment from them because of your inability to repay, you may want to look at how to sue a payday loan company because there are laws governing the whole practice to protect you as a consumer. These loan providers take advantage of your ignorance about finance laws and use it to their advantage. The key is therefore for you to know your rights and understand exactly what the legal consequence of failing to repay a payday loan is.

You Can Not Be Arrested Or Have Your Assets Seized
You should understand that payday loan providers cannot threaten to arrest you or seize your assets with immediate effect for failure to repay. If you get threatening phone calls, you should make it clear to them that you know your rights very well and that they have no legal basis to threaten you. Moreover, there are legislations in place to restrict the amount of money you can be sued for by payday loan companies on bounced checks and this makes it extremely difficult for them to hire attorneys as they lack sufficient grounds for a solid case.

How To Sue A Payday Loan Company?
Many states have restrictions on the maximum amount of interest a payday loan company can charge for lending and there are laws they are expected to abide by for lending and subsequently dealing with borrowers who cannot repay on time. Therefore, depending upon your location, you may have a range of grounds to fight back harassment from payday loan companies as discussed below.

1) Payday loan providers can be sued for charging excessive interest on their loans if you can prove that they operated against state laws by charging more than what the law allows them to. These companies often look for loop-holes in state laws and attempt to benefit from it. If you know your rights, there is very little they can do against you.

2) You can sue them for harassment because state laws prohibit them from making false threats and from lying to you about the consequences of your loan. However, you stand a better chance of being contacted by foreign collectors who feel they are immune from state laws. If that is the case, you can simply ignore their calls as there is nothing they can do against you.

If you have sufficient grounds to pursue a case against a payday loan provider, you may get in touch with your local, non-profit debt management agency or seek the help of a law firm specializing is such cases.

7 Steps to Get Out of Pay Day Loan Debt

7 Steps to Get out of the Pay Day Loan Cycle

If you are struggling with payday loan(s) or you know someone struggling to payoff payday loan(s), please share this article. Here is a proven strategy that can be used to get you out of the payday loan cycle without filing bankruptcy or risking damaging your credit. Again, please review the following steps carefully and share this article with anyone you think may benefit from the information.

Step 1: Do not get another payday loan–no matter what happens. Basically, stop adding new interest debt.

Step 2: Get Organized. This step is particularly important if you have more than one payday loan. Write the name of each payday loan company, its corporate phone number, loan due date, interest rate, and amount due each pay period. Use a calendar and organize the information you collect. This will give you perspective and help you effectively organize a clear plan of action.

Step 3: Determine if Payday Loan Company is a CFSA Member. Contact each pay day loan corporate office and confirm whether or not they are a CFSA (Community Financial Services Association) Member. Most operating payday loan companies are members of CFSA . As a member, these companies are required to offer solutions to help consumers needing more time to pay back their financial obligation. One of these options CFSA member companies provide is an Extended Payment Plan (EPP). CFSA member companies are required to provide this option to any customer for any reason and at no additional cost.

Many employees may not be familiar with these terms so this is why you must speak to someone in corporate office and insist on speaking with a manager. (You should also read through your contract carefully and sometimes this information is plainly stated in the terms of your contract. Even if it is not listed on your contract, it may still be an undisclosed option).

Basically, to qualify for the CFSA EPP a customer must simply ask for the EPP by close of business on the last business day before the loan’s due date. This must be done by returning to the office where the loan originated or by using whatever method was used to obtain the loan. The customer will be required to sign an amendment to the loan agreement reflecting the new payment schedule. Under an EPP agreement, a customer may pay the transaction balance in four equal payments coinciding with periodic pay dates.

Again, there is no charge to enter into an EPP and the interest on your loan will stop while you are in this agreement. However, if a customer defaults on an EPP, a lender may charge an EPP fee and accelerate payment on the balance remaining, as authorized by law. The lender will not begin collection activities while a customer is enrolled in the EPP as long as all obligations under the EPP are met. Which means all collections calls must stop while you are in this agreement. (Note: You can have more than one EPP arrangement with different companies at one time.)

Step 4: Agressively attack your payday loans. Start with the biggest payday loan (Loan A) and work yourself down to the smallest one. This loan will usually have the most interest charged. Visit the storefront for (Loan A) and request an EPP on the day before your loan is due. Once you sign the appropriate paperwork you are typically granted and extension until the next payment due date. (So instead of your payment being due the day after you enter into the EPP installment payment, your payment will not be due until the next payment due date.)

Do not waste your cash, rather save any money you were planning to use to pay on (Loan A) the next day towards your first EPP installment payment which will be due in a couple of weeks. Again, it is important that you do not default on this EPP agreement.

Continue to pay at least the minimum due on any other existing payday loans w/out EPP Agreements. Note: Sometimes paying off your loans completely and refinancing is less expensive than just paying interest. For instance if you owe $650 to payoff Loan B and your interest is $100 you can opt to pay $650 and immediately refinance $550. Either way you are out $100 but since you have reduced your principal you may slightly lessen your interest rate. Every dollar you can save counts!!

Step 5: Develop a plan to gain extra money. Get a part time job; work overtime at your current place of business; have a garage sale; and/or contact your bank/credit union and see if you are eligible for an Advanced Deposit, Overdraft Protection, or a small personal loan. If you are successful dedicate these extra funds completely to paying off your payday loans. (Note: The fees/interest you pay in overdraft fees or a small personal loan will pale in comparison to the interest you are paying with your payday loan.) Remember, you must maximize every dollar and commit to using every extra dollar towards paying off you payday loans.

Step 6: Repeat step 4. The next pay cycle repeat step 4 with Loan B. If you need more leverage just wait a couple of pay cycles in between your EPP requests for Loan A and Loan B. Continue this process until all loans are paid in full. As soon as you pay off your first EPP installment loan continue to aggressively set up and pay on any remaining EPP installments. Remember if you have successfully entered into an EPP installment payment agreement with a payday loan company, you DO NOT have to worry about interest accruing; however, you must be sure you do not default on your agreement. So be realistic and DO NOT open too many EPP agreements at one time. Stagger these EPP agreements as needed to ensure you will not default!

Step 7: Start a savings. Once you have successfully paid off all of your payday loans, you WILL NOT be eligible for obtaining another payday loan from those particular companies for 12 months. This is actually a good thing as this will help you to commit to a budget from this point forward. You should now start a savings plan and prepare for future emergencies. Once you break this payday loan cycle you should have renewed confidence in you own ability to save for future emergencies that will inevitably happen.

Payday Loans: Quick Ailment For All Unplanned Expenses

Are you struggling with financial deficiency in the mid of the month? Looking for a way to cope with the pressure of unexpected expenses? This is a fact that no one has that much power to stop the arrival of emergency. So, it is better to get ready with the ways to tackle such emergency situation smartly. At such times of inadequate finance in hand, applying for payday loans could prove to be beneficial. These loans will help you to solve all your fiscal difficulties in an effective manner. These kinds of Loans Payday come under the category of short term loans that will provide you sufficient funds, before the arrival of your next payday.

However, you have to meet certain criteria for the approval of the loan. These criteria include the following:-

• You should be 18 years or more
• You should be a regular employee of a firm
• You should have an active and valid bank account

After qualifying the above criteria, payday loans allow you to borrow an amount ranging from $100 to $1500 depending upon your income, repayment ability and needs. Repayment duration of 7 to 31 days will be provided, within which you will have to repay back the loan along with the interest charged. However, the rates of interest for these loans are a bit higher because of its short term financial nature.

Payday loans do not involve time-consuming and hectic credit check, fax and lengthy paperwork formalities which makes the approval of the loan faster and easier. The required loan amount will be directly transferred in your account in a very less time.

Loans Payday allow you to use the borrowed amount for meeting several urgent financial requirements such as- paying off medical bills, credit card bills, grocery bills, car repair, travel expenses and many more.

No Fax Payday Loans: Adopt The New In Stead Of Outdated Faxing

Getting a loan without suffering or passing through the monotonously lengthy faxing process is possible now. For that you will have to go for the no fax payday loans. As the name suggests, there is no need of sending fax. You will have to produce your documents but that will not be asked to be sent through fax. In fact, for proving your eligibility you will only have to fill up a simple form in these loans. Everything that is required will be asked in these forms and you will have to be honest and appropriate in answering these.

As you are not sending fax so lots of time will be saved in this procedure. The whole process of approving and dispatching the loan will take only 24 hours and not more than that. Moreover, there is no credit check too. In such case, these loans are ideal for emergencies. Through it you will be able to handle emergencies like paying medical bills, repairing your car, electricity bills, child’s examination fees, home installments, loan installments or home rent.

You will get £100 to £1500 for 14 to 31 days and within that duration it is must for you to repay the loan. An inability to repay the loan within that period will lead to extra monetary fines on you. So, you should adjust the repayment date with your payday and get it paid automatically from your bank account.

Bad credit holders are always allowed in it and their credit records that are permitted in it include bankruptcy, arrears, late payment, CCJs, defaults, skipping of installments or IVA. You will get such facilities because your credit records will not be checked while you go for the no fax payday loans.

So, if you are an 18 years old person with bank account and an income of minimum £1,000 per month then go for it without any hesitation.

No Fax Payday Loans: Make Your Future Safe With The Extra Money Help

You have urgent requirement of money in the middle of the month and don’t know where to search for? These things now become the past with no fax payday loans which is specially configured for such conditions or fighting the money crisis that occurs on you in the middle of the month without providing you any information. When you don’t have right document with yourself and still looking for the loan then these loans can be a excellent option.

No faxing, no security and no visits to the lenders place for loan approval. If you have bad credit history then there will be no problem. Lenders do not perform any credit check procedure for no fax payday loans. So if you are suffering from bankruptcy, default, late payment, or CCJs etc just go for these loan any time without being worried about any hassle. No collateral is also one of the conditions with this plan. So tenants and home owners who don’t want to keep their home as collateral can easily go for these loans.

Any one can get these loans but have to meet some requirements that is you must be the citizen of UK and your age should be more than 18 years. You must have the job of atleast £1000 and also must hold the active bank account. Once such criterion is meeting up no fax payday loans can be yours without demanding you to having the worry about any paper work.

The money which you can avail through these loans ranging from £100 to £1500 and the repayment term will be around 14 to 31 days. You can easily repay the loan amount once your salary takes place. Lenders approved the money according to your repayment ability. You can ask for more time if you want but for this you need to pay some extra amount. Lenders charge high interest rate as these loans are short term loans. You can fill out the form online and once the loan gets approved the money will be in your account directly within 24 hours.

Everything You Ever Needed to Know About Payday Loans But Were Afraid to Ask

A payday loan is a small short term loan you can use to cover expenditure until your next payday. You can apply online and the decision to loan you the money is made almost straight away. In most cases the whole application can be completed online and the money loaned can be credited into your bank account on the same day as you make your application.

A payday loan is an unsecured loan, so it is not dependent on collateral, such as you owning a house or car etc.

Generally when you make your first application you can borrow any amount up to £300, depending on your take home pay. You are more likely to be approved the less you want to borrow, so it is advisable to borrow only what you need. Once you have successfully repaid loans with one particular company they may then offer to lend you anything up to about £750 in subsequent loans.

Payday loans can provide a useful solution for short term cash flow problems.

Who can apply for a Payday loan?

In order to be eligible for a payday loan you must be over 18 years old and in employment with a take home wage of at least £750 per month. You must also have a bank account with a valid debit card.

Even if you have bad credit history you should still be able to obtain a payday loan as long as you fulfil the above criteria.

How do you get a Payday loan?

The majority of payday loans are available online, so there is no delay with faxing or posting of documents. The application process is quick and easy to complete. You will be asked for your name, address, details about your monthly income and employment, when your next payday is, along with the amount you wish to borrow and your bank account details.

Once you have submitted your application you should hear back from the payday loan provider within minutes. They will email you with their decision to the email address you have registered with your application.

Payday loan providers partly make their decision as whether to lend you money dependent on the amount you want to borrow compared to the amount you earn. Only borrow what you need, the less you borrow the more likely that your application will be accepted and the smaller the amount of interest you will accrue.

If your application is successful you will be sent, by email, your loan agreement showing the amount that will be lent to you, the repayment date and the amount of interest you will pay on the repayment date. Along with the loan agreement you should also be sent loan conditions. These loan conditions should outline your rights under the Consumer Credit Act 1974 along with details about repaying the loan, cancelling the loan and the use the personal information you supply when applying for the payday loan.

If you are happy to proceed you sign online by providing details of your name and answering a security question such as your mothers’ maiden name. Then, email this back to the loan provider and the money will be deposited into the bank account you registered at the application process. The money can be deposited in your bank account on the same day you make the application, so this is a very fast and efficient way of borrowing money short term.

How do I repay the loan?

You will need to repay the loan amount and the interest accrued on the repayment date as specified in the loan agreement. The repayment date is usually your payday, hence the name payday loan.

The repayment will be collected by the loan provider by debiting the bank account you registered at the application process, which is the bank account into which you get your wages paid.

Repayment over a longer period

Payday loans may be extended if you find yourself in a position to be unable to satisfy all or part of the amount due on the repayment date. If this happens it is recommended that you contact your payday loan provider as soon as possible and explain your circumstances to them. They will then be able to explain your options and how to go about extending your loan.

Even if you are not able to fully settle the repayment amount, it is advisable to pay off as much as possible on the repayment date. This will help to keep the amount of interest you owe to a minimum. Some companies may charge you additional fees for extending your loan, you should check if this is the case before you sign your loan agreement.

Regulation of Payday Loan Companies

Properly regulated payday loan companies must adhere to strict laws governing the finance industry.

As with any financial product you apply for it is always advisable to check that the company offering the loan is properly regulated. The payday loan company you are applying to should show its Consumer Credit Licence number within its loan conditions and it should also be authorised by the Office of Fair Trading. If you are in any doubt as to whether the payday loan company you are considering applying to is fully regulated then you are within your rights to contact either of these bodies for further information.

As long as the payday loan company you are applying to is properly regulated, there will be a recognised body to make any complaints you may have to and you can be assured that you will not be subject to any unfair practices.

What are the benefits of a Payday loan?

Fast

One of the main benefits of a payday loan is the speed at which the cash can be credited to you. The money you need can be available to you in your bank account on the same day that you make the application. This can provide valuable assistance if you have a short term cash flow problem and need money in an emergency.

Simple

The application process is very simple, it takes just minutes to apply for a payday loan and you do not have waste time posting or faxing documents to the payday loan provider, as you would with other more traditional high street loans.

Poor Credit History

Payday loans are available to people with a poor credit history. This is because payday loan companies do not solely make their decision to lend based on a persons credit history. As long as you fulfil the application criteria you have a good chance of obtaining a payday loan. For many people a payday loan may be the only way they are able to obtain credit, especially in the current financial climate where the majority of lenders are unwilling to provide loans altogether, never mind to a person with a poor credit history.

Use of the Loan Money

You do not have to tell the payday loan provider what you need the payday loan for. You can use the money for whatever you want. You may need money in an emergency which can not wait until payday for instance; emergency medical or dental treatment, to settle a bill quickly, extra spending money on holiday or even for a romantic weekend away. The choice is yours as long as you make the repayment due on the repayment date.

No Upfront Costs

There are no upfront costs associated with a payday loan. You do not pay anything back until the repayment date you have agreed to in the loan agreement.

Why does the APR appear high on payday loans?

The APR applied to payday loans appears at first glance to be high. This is very misleading, but there is a simple reason why this figure looks so high. APR is an Annual Percentage Rate, and as such is calculated over a whole year (365 days). However, a payday loan is taken usually only over a number of days or weeks.

The APR calculation was not designed to apply to very short term loans such as payday loans. It was designed to apply to long term loans in existence for a year or more. It is really a theoretical figure than enables people to compare similar longer term loan products, like mortgages or ongoing credit balances.

Rather than relying on the APR rate it is more advisable to look directly at the loan agreement to see exactly how much interest you will be charged for the period of your payday loan. Some companies have a standard interest charge for the amount you wish to borrow regardless of the duration of the loan. It is then up to you to decide whether you will be able to repay both the cash advance you receive initially and the interest amount on the repayment date.

To Conclude

Many people do not have savings or access to credit cards or more traditional loans and so the convenience of a regulated payday loan provides piece of mind should the occasion arise that they need some money quickly.

If you need money in a hurry, can not wait until payday and are confident that you can make the necessary repayments on the repayment date, this could be the ideal solution for you.

Overall, payday loans are convenient, easy to access and offer a viable option for people who require money quickly for whatever reason.

Article Source: http://EzineArticles.com/2550921

Payday Loans: No Credit Check No Fuss Loans

Payday loans are the fastest and most convenient option for getting a cash advance for emergencies before your next payday. However getting payday loans and their repayments involve certain important aspects. Herein we are attempting to answer all your general queries related to Payday loans and we hope it will serve as a tool to open up any mystery surrounding payday loans or cash advance.

What Is A Payday Loan Or Cash Advance Loan?

We daily come across many loan types like housing loan, personal loan, and education loan. However, the payday loans are a new buzz in the market, and it is very popular. This loan is known by many names like “Cash Advance”, “Paycheck loan”, “Check loans”, and “Payday advance loans”. Let us understand what is a payday loan or cash advance loan and how and when it should be used for your maximum advantage. Payday loans are unsecured loans, which can be used for meeting your emergency financial needs and is paid back out of your next paycheck on your payday. Thus, payday loans are the shortest tenure loans among the other loans available in the market.

Are there any limitations on payday loan or cash advance loan usage?

Many a times we face a situation when we need money badly but feel like our hands are tied as our payday is still several days away. In such a scenario, we either have to shelve or defer our plan of purchasing something or go for a heavy interest credit card loan to meet the obligation. The requirement could be to pay up unexpected medical bills, your kid’s school fee, to avoid bouncing of your issued checks or any other financial obligation. In such trying times, payday loans or a cash advance comes in handy. Thus, you can use this cash advance for whatever purpose. There is no restriction on the usage of payday loans.

Am I eligible to receive a payday loan or cash advance loan?

The best thing about payday loans is that they can be had even if your credit rating is not very good. The second best thing about payday loans is that taking a cash advance does not affect your credit rating. All you need to be eligible to receive the payday loans is to have a running checking account and a regular job.

How should I apply for a payday loan?

To apply for the payday loans, we would say it is easier to do than to say. You can apply for payday loans online using Internet. You may be required to supply some basic information such as your Name, Address, and your employer details. Some companies offering payday loans may ask for your Bank Statement or pay stub over fax. The documents required by these companies for payday loans are minimum in comparison to other types of loans.

What is the fee charged for payday loans?

Before applying for payday loans, we suggest that you scan 5-6 companies for the fees they are charging. Some companies offer payday loans without any fee for the first week.

How much cash can I get with a payday loan?

The amount of payday loans ranges from $100 to $1000 depending upon the repaying capacity of the borrower.

What is the length of payday loans?

Normally a cash advance is supposed to be paid back on or before your coming payday. Therefore, the maximum length of payday loan could be up to 30 days. However, some companies are flexible with respect to the loan duration as well. Payday loans can be extended until the next payday. This extension of payday loans however comes at a price.

How long does it take to get a payday loan?

Payday loans are much easier to get and in less time than other loans. After applying for a payday loan online, you will get a telephone call from the payday lender. After completing the small formalities, the cash advance will be credited to your checking account the next business day.

Does this mean I can enjoy my pay without waiting for my payday?

Before you jump for a payday loan, please note that the rate of interest charged for these loans are higher than other loans. Extending the duration of payment will only increase the fees charged. The payday loans or cash advance loan should be used very prudently and only for meeting financial exigencies that cannot be avoided. Please remember that getting a payday loan or cash advance loan too frequently could upset your monthly budget and you may find it difficult to get out.

Article Source: http://EzineArticles.com/110680

Multiple retailers closures accelerate to average of 20 stores a day

Several forces are creating the “perfect financial storm” to lead many more South Africans towards cash flow shortages in 2016, Debtbusters CEO Ian Wason said.
stevepb via
stevepb via Pixabay
Debtbusters has recorded a 113% increase in enquiries about debt counselling so far in December, compared to last year. Wason is predicting the situation is only going to get worse. He points out four key reasons why the debt stress of cash-strapped consumers will increase even more.

Increasing tax burden

Wason predicts there will be no income tax relief on the horizon for middle- and upper-income earning consumers in 2016. He believes any tax hikes will only make these consumers more financially vulnerable.

“Middle- and upper-income earners are some of the most financially constrained South Africans. They have houses, cars and ample monetary commitments, such as school fees and mobile contracts,” said Wason.

“These consumers have these possessions because they have borrowed money to make purchases and have already been impacted by two repo rate increases in 2015. Any tax increases will directly impact their level of disposable income and will only make it harder for them to service their financial commitments and absorb another repo rate increase.”

Interest rate increases

The recent weakening of the rand, tighter monetary and fiscal policy and the inflationary impact of possibly the worst drought in South Africa’s history will likely lead to additional hikes in the repo rate by the SA Reserve Bank at the start of 2016. This could be a tipping point for many consumers after their festive season spending, in Wason’s view.

In addition, consumers can expect their cash flow to be squeezed by other price increases in items such as food – due to the drought – electricity and water. “The weakening economy – and an increased risk of unemployment added to the mix – sets the scene for a potentially bleak start to 2016,” said Wason.

More difficult to get a loan

New interest rate caps introduced by the Department of Trade and Industry will make it even more difficult for borrowers to obtain loans in the future, according to Wason. While low-risk consumers will be paying less in interest and fees, lenders will be using more stringent risk models to evaluate customers’ creditworthiness.

“As soon as the new regulations regarding limitations on fees and interest rates come into effect in May 2016, lenders will be taking on more risk for less money and are, therefore, bound to decline riskier borrowers,” said Wason.

As lenders start scaling back on who they lend money to, even fewer people will qualify for loans, and consumers who are dependent on short-term loans for survival will find themselves in a “cash flow drought” with “nowhere left to turn”.

DebtBusters’ Debtometer report for the third quarter already shows significant changes in the South African lending landscape, with a decrease in banks’ share of overall debt. This confirms that banks have scaled back on lending, according to Wason.

Consumer debt scales tipping to the bad side

In Wason’s view, South African consumers are addicted to shorter-term expensive debt and do not seem to care about or understand the costs. “This addiction – driven by desperation for cash – has led to the increase in payday loans. Almost two million South Africans rely on payday loans every month, according to the latest Consumer Credit Market Report (CCMR),” said Wason.

What is even more concerning to him is that payday loans between R5,000 and R8,000 have increased by 557% this year. The CCMR also indicates that only 58% of unsecured accounts are up to date – the lowest on record.

The latest Debtbusters Debtometer report shows clients required 102% of their net income to service their debt before paying for any living expenses.

Controversy over Newcastle’s deal with Wonga

English Premier League side Newcastle United on Tuesday unveiled a sponsorship deal with loans company wonga.com, sparking criticism and concern because of the firm’s reputation for charging sky-high interest rates.
Wonga will sponsor the club’s shirts from the start of next season and will also invest £1.5m in the club’s academy and a social scheme helping to equip local youngsters with workplace skills.

Newcastle managing director Derek Llambias said in a statement: “We are building a club that can regularly compete for top honours at the highest level.

“Throughout our discussions Wonga’s desire to help us invest in our young playing talent, the local community and new fan initiatives really impressed us and stood them apart from other candidates.”

But local politicians and R3, a trade body for insolvency professionals, questioned the appropriateness of the choice as the north-east of England, of which Newcastle is the main city, has the highest rate of insolvency in Britain.

Wonga offers short-term business loans for an annual percentage rate of up to 360% while its “representative” annual rate for payday loans for struggling households is more than 4,000%.

Those rates have seen the opposition Labour Party speak out against the deal.

Local Labour lawmaker Ian Lavery told The Times that “if Wonga get this sponsorship I will not set foot in St James’ Park (which club owner Mike Ashley has rebranded the Sports Direct arena) until it is off the shirts.”

He dubbed the deal “an outrage.”

R3’s chairman Lee Manning noted that “Wonga has chosen to target a region that has comparatively high numbers of people experiencing financial difficulty. Our experience tells us that many of those seeking high-cost credit need professional advice for their financial problems, rather than accruing further debt.”