Payday Loan Report

Payday Loan Companies Change Practices (for the Good)

Wed, 07 Mar 2007 05:03:47 -0800

I'm a believer of free market. As long as the nature of payday loans are properly disclosed, and the industry stops misleading marketing, I don't see an issue with the high interest rates. We have to allow borrowers to make decisions based on free will.

Payday Loan ABC Tracks Industry Developments

Mon, 05 Mar 2007 06:49:46 -0800

Payday Loan ABC is just a me-too payday loan site that seeks to solicit online applications from people in bad credit and in urgent need of cash. It provides up to $500 next-day cash advance to almost all states (excluding AR, CT, GA, NJ, NY, PA, PR, WV, and VT). All you have to do is to fill up a quick application that usually includes a paystub copy, a voided personal check, recent bank statement and contact information. Funds are usually deposited to your checking account in the next business day. The news section of Payday Loan ABC is certainly interesting. It is definitely not for payday loan applicants -- it tracks legal developments, federal agency research, regulations and industry trends. Of course, its editorial most favors the businesses in the payday loan industry, but still, it makes good readings if you, like me, are curious about the ins and outs of the industry. I will never apply for payday loans for sure -- I have enough cashflow and emergency fund that are more than enough to carry me through bad times -- but I do believe in free market. As long as all information is adequately disclosed in plain English, there is a reason for the industry to provide a useful service to the general public, even though high interest rates are charged. (While the above is a sponsored post, PFBlog is not required to provide a favorable review. Quality time was spent to study the subject website in completing this post in order to give an independent opinion.)]]>

Do You Know The Pros and Cons of Payday Loans?

Tue, 21 Nov 2006 22:11:12 -0800

Short term instant loans are known as payday loans. These are cash advances that are to be returned with interest on payday. Within a few minutes of applying online the loan will be approved and you will have the cash within a couple of hours. All it needs is your name, address, and bank details. Most often, the people who advance these loans do not perform a credit check. There are several online sites like www.personalcashadvance.com/ that advance up to USD 500 instantly. Also known as cash advance or post-dated check loans, the borrower can write out a check that can be cashed in on payday and avail the amount the check is for immediately. To get this instant cash the charge for every USD 100 is about USD15 for 14 days only. Any delays means you need to pay the charges once again. There are both pros as well as cons to payday loans. These loans are at a high rate of interest and are being marketed aggressively through radio, television, direct mailing, and the World Wide Web. The plus points are: • If you suddenly need cash for medical expenses or unforeseen emergencies, a payday loan is the fastest and easiest. • In a financial crunch, a payday loan can help you pay immediately pending bills so that your credit report remains unblemished. • The paper work is simple and all they require is you name, address, and bank account information. The procedure for obtaining a payday loan is simple. The disadvantages are: • You can avail only small amounts. There are limits, some states permit as much as USD 1000 while in others the maximal permissible is USD 300-400. • If you do not pay exactly in 14 days and need to take an extension then you may land up paying USD 60 for a loan of USD 100. Payday loans are not recommended if you need a large loan or are unable to pay the amount back quickly. • Although payday loans enable you to access money quickly, in fact, the rate of interest charged is quite high. In fact, long term credit rates are more affordable. • Often, the terms and conditions may not be clear and you may land up paying finance charges twice or thrice especially if you allow the amounts to be deducted from your salary itself. You must specify that you want the whole amount of the payday loan deducted not just 25% or so. A payday loan is actually a cash advance against you next month’s earnings or salary. And, today you can apply for a payday loan by fax or email. It is quick, easy, and instant and will help you tide over a tight situation. However, it is important to avoid rollovers as this is a debt trap. Take a payday loan only if you are sure you can return the whole amount as soon as you get paid.

Online Payday Loans: Try At Your Own Risk

Wed, 18 Oct 2006 21:28:22 -0800

Bankrate reminds us that online payday loans may well be scam that extracts your personal information.

Payday Advance Interest Rate Capped At 36% For Servicemembers

Tue, 17 Oct 2006 19:46:33 -0800

This kind of policy may bring unintended results. Like minimal-wage law, this maximum-rate law will discourage payday loan providers to underwrite more loans for servicemembers of the country. And at the end of the day, those who are underpaid by DoD will have one less way to get relief.

How To Avoid Payday Loans?

Fri, 13 Oct 2006 21:28:17 -0800

Although this article was published eight years ago, the advice it offered is still sound.

Alternatives To Payday Loans

Sat, 07 Oct 2006 15:49:10 -0800

There are other options. Consider the possibilities before choosing a payday loan: - When you need credit, shop carefully. Compare offers. Look for the credit offer with the lowest APR - consider a small loan from your credit union or small loan company, an advance on pay from your employer, or a loan from family or friends. A cash advance on a credit card also may be a possibility, but it may have a higher interest rate than your other sources of funds: find out the terms before you decide. Also, a local community-based organization may make small business loans to individuals. - Compare the APR and the finance charge (which includes loan fees, interest and other types of credit costs) of credit offers to get the lowest cost. - Ask your creditors for more time to pay your bills. Find out what they will charge for that service - as a late charge, an additional finance charge or a higher interest rate. - Make a realistic budget, and figure your monthly and daily expenditures. Avoid unnecessary purchases - even small daily items. Their costs add up. Also, build some savings - even small deposits can help - to avoid borrowing for emergencies, unexpected expenses or other items. For example, by putting the amount of the fee that would be paid on a typical $300 payday loan in a savings account for six months, you would have extra dollars available. This can give you a buffer against financial emergencies. - Find out if you have, or can get, overdraft protection on your checking account. If you are regularly using most or all of the funds in your account and if you make a mistake in your checking (or savings) account ledger or records, overdraft protection can help protect you from further credit problems. Find out the terms of overdraft protection. - If you need help working out a debt repayment plan with creditors or developing a budget, contact your local consumer credit counseling service. There are non-profit groups in every state that offer credit guidance to consumers. These services are available at little or no cost. Also, check with your employer, credit union or housing authority for no- or low-cost credit counseling programs. - If you decide you must use a payday loan, borrow only as much as you can afford to pay with your next paycheck and still have enough to make it to the next payday.

Payday Loans Are Costly Cash

Sat, 07 Oct 2006 15:49:08 -0800

Check cashers, finance companies and others are making small, short-term, high-rate loans that go by a variety of names: payday loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans. Usually, a borrower writes a personal check payable to the lender for the amount he or she wishes to borrow plus a fee. The company gives the borrower the amount of the check minus the fee. Fees charged for payday loans are usually a percentage of the face value of the check or a fee charged per amount borrowed - say, for every $50 or $100 loaned. And, if you extend or "roll-over" the loan - say for another two weeks - you will pay the fees for each extension. Under the Truth in Lending Act, the cost of payday loans - like other types of credit - must be disclosed. Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis). A cash advance loan secured by a personal check - such as a payday loan - is very expensive credit. Let's say you write a personal check for $115 to borrow $100 for up to 14 days. The check casher or payday lender agrees to hold the check until your next payday. At that time, depending on the particular plan, the lender deposits the check, you redeem the check by paying the $115 in cash, or you roll-over the check by paying a fee to extend the loan for another two weeks. In this example, the cost of the initial loan is a $15 finance charge and 391 percent APR. If you roll-over the loan three times, the finance charge would climb to $60 to borrow $100.