Payday Loan Blog - Payday Loans
Planning a much needed vacation can be exciting and can give you something to look forward to in the future. Depending on the vacation, it can be very important to ensure that you have a little extra cash on hand to cover any unexpected costs. Having extra money on hand can help your vacation go longer and smoother. For many, a great way to get extra money for a vacation is by using a payday loan to get the money now and then pay it back after the vacation. If a vacation is what you need and are ready to get away, then use a payday loan to help you get the extra money you need to finance your trip.
How Much Can I Borrow?
When you are taking a vacation one always is worried how much they are going to need and what they plan to spend. Depending on where your destination is, this may vary. Most of your money will go to eating out while you are on vacation and this can add up quickly, making your daily expenses more and more. Using a payday loan for extra expenses can help you cover costs and what you don't spend you can just bring back and use towards paying back your loan or other bills. How much you borrow can be up to you, most payday loan company's offer lending amounts from $100 to $1,000, depending on your income. No matter how much you decide to borrow, you can rest assure that a payday loan can help you have a more relaxing, stress free vacation.
How to Use Your Payday Loan on Vacation
Once you have planned a vacation and have received a payday loan to help cover your expenses, now is the time to put your vacation money to use. Depending on what type of traveler you are and where your destination is, putting your money to use the appropriate way is important.
Here are some of the common vacation expenses:
- Plane Ticket
- Admission Costs- Shows/Theme Parks/Parks/Museums/Exhibits
Being able to have the money you need for these expenses can be very relaxing and make your vacation a very enjoyable one.
Payday Loan Travel Limitations!
The great thing about a payday loan is that there are no limitations to where you can spend your money and how you spend it. The best thing is that you receive the requested funds and from there you are able to put them to use anyway that you like. Having this option allows you to enjoy your trip and put your borrowed money to use on things that you want without any limitations. Using your payday loan wisely is important, but it is also important to use it how you see fit that way you can enjoy your vacation.
To fax or not to fax, that is the question. Alright, you might be wondering more about that question, and that is why we are here. Let's talk a little bit about how you can go about faxing in a payday loan request, or if that is something that you even want to do. You need to know the possibilities of how every payday loan request will work out, so take your time and really get it done. You need fast cash relief, and that is what a payday loan will do. You should not settle for a poor experience when you can take your time and get everything done. Read on and make sure you get the fast cash that you truly want.
What Would You Fax In?
If you do not want to go into the payday loans store and get a loan, then sometimes companies will offer you the ability to fax information in. This means that you would have to fax in the application, a copy of your paycheck stub, proof you are a legal citizen, and proof of a bank account for transfer. This is a lot of things to fax over, so you need to make sure that you have a clear understanding of what they are going to want. The last thing you need to do is forget a valuable piece of information and hold up your process.
Should I Fax?
If you do not actually want to go into the store then this is a valuable method. It will allow you to just take your time and complete this process whenever you are ready. There are some people who have been really happy with the results that they have gotten thanks to fax payday loans. Like always you need to make sure that this is something that you want to do and something that you can handle correctly. If you do not want to fax then obviously you have some other options you can use to your payday loan advantage.
No Fax Needed
Faxing has really been replaced by the internet. People have found that they do not want to fax because they do not trust the fax machine as much as they trust the security on the internet. This is one of the big reasons why you might not want to fax, and you want to handle this some other way. Remember, you do not need a fax machine to do this, and there are some companies that will not even allow for faxes. Just take your time and make sure that you are safe, secure, and able to get the money that you really need.
We always hear about special interest groups in politics. Everybody is claiming that they are going to fight them, yet both major parties have plenty of people who will fall right in line with what those special interest groups will tell them. Can payday loans actually become a special interest group? This is something that could really affect a politician if they get in on this platform, and try to work it from the inside. Well, unfortunately for one politician it has now come to light that those groups he once aimed to fight are actually the groups that have helped get him elected in the past. What could this all mean?
Who is This Politician?
Democrat Representative Bernie Buescher from Grand Junction, Colorado is dealing with some information he probably did not want to come out. Documents filed with the IRS have shown that Buescher has some links to the payday loan industry. The payday loan industry actually fought legislation that Buescher pushed for this past year. Talk about a conflict of interest! In August ACE Cash Express sent his campaign $25,000, which was the largest check registered for a period of over a month. The bill Buescher was trying to pass would have capped interest rates and fee that lenders could charge.
How Can This Become Special Interests
Well, if you are a politician and accept a large sum of money from a group, then it is generally understood that you will fight for that groups rights. This could really cloud your judgment. Payday loans have always been under fire for interest rates and fees, so it is obvious why these lenders would want to get someone on their side that will fight for them, even though it backfired in this case. If they feared that their industry could take a large hit thanks to bills limiting their business then that is when they can give a lot of money to a politician. That is also when they become a special interest group. It could happen.
What Can You Do?
Well, if you feel like you want to get involved then you should not sit there and do nothing. Learn more about payday loans and learn about the bills that people are trying to pass in regards to them. This way you can be involved in the discussion about loans and the special interests groups. Then you can let your politicians know your thoughts and what you like or dislike. This is really the best thing that you can do in this current situation.
Have you ever dealt with the payday loan industry? Many people do not like to deal with this industry because they feel as though there is something wrong with how it works. People have begun to change how they deal with payday loans. States are also starting to do something different as well. These states really want to find new ways to make sure that the payday loan industry is giving people a fair shot and that it is not corrupt. Ohio is a state that is trying to do this. Let's take a look at what Ohio is doing. This might end up affecting your state at some point, so make sure that you are paying attention.
What the Law States
In May the General Assembly passed a law that will drastically cut the annual interest rate that is permitted on short term payday loans. The law cuts the rate down to 28% from a rate that could go as high as 391%. Like any fight this has gotten expensive and the Ohio payday lenders have shelled out hundreds of thousands of dollars to launch a statewide campaign to stop this law. Both sides have really been pushing to get the result that they want. This is a process that is going to have a resolution passed very soon.
Deadlines Must Be Met
This is not something that will pass without a few deadlines having to be met. The first date to remember is August 14th. This is when payday lenders will go before the Ohio Ballot Board. They want to do this to make sure that they can get wording in this bill that will make sure the result they get is the one that the lenders want. The result they need is 241, 365 signatures from Ohio voters. If these signatures are not received by August 31st then the law will be passed on the very next day. On November 4th the issue of payday loan will be raised on a national level.
What is it Looking Like?
Well, obviously the payday loan lenders are fighting long and hard to make sure that this does not go through. You would assume that anti-payday loan organizations would be fighting hard to pass this. It turns out that the anti groups are not as concerned. They feel as though this is not the defining time of the issue and they are working to make sure that this bill can be worded in the best way possible. They do not want any bad confusion to take place with the voters. This is why they are fighting for wording, but are not as concerned about a potential NO vote.
Payday loans are an extraordinarily popular form of borrowing, but they don’t have the best reputation. Why is this? For the most part, payday loans get a bad rap because of the unscrupulous tactics of a handful of lenders that give the rest of the industry a bad name. In addition, some buyers dive into payday loans without fully understanding what they’re getting into, which leaves some borrowers with a bad taste in their mouths. So are payday loans really all that bad? In this post, we’ll answer that question and try to provide some insight into why payday loans have such a negative stigma.
- Notorious lenders. Sadly, the unethical practices of just a few lenders can get generalized to an entire industry, which is in part what has happened with payday loans. Before the government regulation that we have today, some payday lenders charged usurious interest rates and were not upfront about their terms. They took advantage of their borrowers, and, in doing so, earned the entire industry a degree of notoriety for being less than upstanding.
- Outrageous interest rates. The average payday borrower will pay about $15 for every $100 borrowed. This translates into a 400% APR, which means payday loans are, without question, costly cash. However, if they are used infrequently and with discretion, payday loans can be a viable solution to short-term cash flow problems.
- Uninformed borrowers. The federal Truth in Lending Act mandates that lenders disclose the terms and rates of payday loans in the consumer loan agreement. The APR must be disclosed in this agreement in bold. All of the information that a borrower needs to know is contained in this agreement, but problems arise because few borrowers actually read the document. As a result, interest rates and terms catch the borrower by surprise. To avoid this, read your loan agreement thoroughly and ask your lender any questions you have before you sign.
- Misuse of the loans. The real danger of payday loans comes when borrowers depend on them chronically. Borrowers who continually roll the loans over for more time eventually bury themselves in finance charges, making it virtually impossible to pay the original loan off. Rather than rolling the loan over when it is due, try to do everything you can to pay it off. Though the additional time may be convenient, it will cost you dearly in finance charges.
There are some people out there who do not think that payday loans should have a place in our society. Those people might be interested to know that there is a new study in the works to find alternatives to payday loans. This is a program started by the Federal Deposit Insurance Corp (FDIC). You might be wondering why this is important to discuss. Well, there are many people out there who get payday loans every day, so any research on alternatives is very impactful to our financial society. Let’s take some time and go through why there is research and what they might find in regards to this study.
Why the Research?
The obvious part of the research is that it looks to cut out predatory lending. They want to make these loans more profitable so larger financial institutions and commercial banks begin to offer them. This would make it more of an even playing field for those who want to be involved. If larger institutions see that there is a way that these loans can work more successfully, then they might be encouraged enough to take over some control. This would also put an end to things like overwhelming interest rates that people fall victim to.
Emphasis on Stability
It is with that stability in mind that they look to lower the interest. These loans can only be received in amounts up to $2,500. The lowered interest rates must be capped at 36%, because of the new regulations. The interest rate is a key problem, so capping it can control it better. If larger institutions and commercials banks begin to take control of this process then you could also see them become more flexible with the rules. This could also be a benefit that matches up a person with a payday loan that is easier to handle given their situation.
What Have the Results Shown Thus Far?
More then 3,000 of these loans have been released in order to see the early results. While the results have not actually been released yet, the banking institution experts like what they have been seeing. It shows that those with stability have done really well. The reason these institutions were so hesitant about this is because of that stability. The more they see, the more likely this program can go through. This is just another step in the process to find a suitable alternative to a payday loan. One day there will be a major breakthrough.
You are likely familiar with payday loans and cash advance loans. The industry has experienced a boom since 2000, with increasing numbers of payday loan retail shops popping up across the United States. These businesses thrive on offering low dollar, short-term loans to consumers who are strapped for cash. However, as an increasing proportion of Americans gain computers and internet access, payday loan businesses have began to operate online, either as extensions of traditional, physical payday loan locations, or as completely internet-based entities. If you have taken out a payday loan the traditional way, in person, or even if you are considering on for the first time, you may not feel comfortable with the safety and legitimacy of online payday lending. However, you can be rest assured that the vast majority of internet payday loan sites are indeed safe and legitimate. Here are some tips and advice you can use to make sure that (a) your payday lending site is a legitimate and trustworthy business and (b) it is safe to give personal information on the payday lending website without the fear of identity theft.
Tips to Watch For
- Research several internet payday loan sites before choosing one. Look for lots of advertising, information, and reviews of these sites. This usually indicates a legitimate business.
- Beware of payday lending sites that ask for some kind of up-front payment. While some may do so legitimately, this should typically be a red-flag that you may have stumbled on a bogus site that is attempting to steal your information.
- Avoid payday lending sites that guarantee approval. It is fairly easy to get a payday loan, but no one is ever guaranteed without possessing a way to pay the loan back (i.e. bank account, place of employment, etc.)
- Make sure that you have a secure internet connection. Public computers such as those at libraries or schools are generally NOT secure. If you must use a public computer be sure to close the browser and reboot the computer to ensure your information is not easily retrievable by a stranger. Also, if you use a wireless internet connection from home or elsewhere, make sure it is a secure connection (secure connections require that you know the name and password of the network).
- Familiarize yourself with the settings and functions of your internet browser. Most will tell you if you are on a secure website with a security icon or some other symbol. Many times the site will tell you that it is secure but always check your browser to make sure.
You Are Ready for A Payday Loan?
These tips will help you make sure that you are secure when taking out an online payday loan or when making any kind of internet based transaction where you give out personal information. If you have made the decision to take out an online payday loan, please borrow responsibly, and take care with your personal information.
The valor and dedication of the armed forces in the United States is indeed awe-inspiring. How we treat these brave men and women reflects our appreciation of their important duties. Thus, as part of the recognition of their service, the military offers a variety of loan plans to assist service members in times of financial hardship. One of these loans is called a military personal loan. In this post, we will compare and contrast military loans with payday loans to help you decide which is right for you.
Military Loan Facts
The type of military loan for which you qualify depends on your branch, or whether you serve in the Marines, Air Force, Navy, etc. For the most part, the loans of the various branches are the same with only minor exceptions. Military personal loans allow service members to borrow anywhere from $500-$10,000 with repayment terms ranging from six to 36 months. Clearly, military loans allow borrowers to qualify for larger loans and have a longer repayment schedule than typical payday loans.
Benefits of Military Loans
Compared with payday loans and other types of lending products available to civilians, military loans have several distinct advantages. Some of the benefits include:
- Low interest rates
- Streamlined application & approval process
- Expedited delivery of funds
- Very accessible
- Do not affect credit
Military Loans vs. Payday Loans
Almost every benefit offered by military loans can also be attained with a payday loan. Specifically, payday loans have minimal processing time, fast delivery, are not credit-based, and are very accessible to virtually all borrowers. Both military and payday loans are also offered online, which makes them even more accessible. The main difference between the two is the interest rates. While military loans come with exclusive low rates not available to the general public, payday loans tend to have rather high APRs. Aside from this difference, the purpose and uses of the two types of loans are essentially identical. You can use either type of loan to pay off small debts, pay for gas, or make home or auto repairs, for example.
It’s no secret that the economy is in dire straits right now. The mortgage crisis still looms large over many homeowners, the cost of living becomes more and more prohibitive, and gas prices are through the roof. Middle-class consumers who once had a plethora of financial products available to them may now have startlingly few options as their credit scores plummet in this economy. As a result, traditional lenders, who are also hurting because of foreclosures and other loan defaults, may be less inclined to lend to anyone with less-than-perfect credit. When these traditional financial doors shut, where should cash-strapped consumers turn? Payday loans are one viable option, which is what may make them one of the economy’s last hopes.
What Payday Loans Have to Offer
Payday loans can help those struggling in this tough economy in a number of ways:
- Help consumers who are maxed out. To keep up with the cost-of-living increases we have experienced recently, more and more consumers turn to credit cards to make ends meet. Consequently, many cardholders find themselves maxed out, or using 100% of their credit capacity. In the event that this occurs, the consumer cannot turn to traditional lenders for a loan. However, payday loans are still a possibility for short-term cash needs.
- Alternatives for those with poor or no credit history. It’s not difficult to ravage your credit in these adverse economic conditions. With poor credit, though, it can be almost impossible to get a traditional loan. But because payday loans look only at monthly income, even those with poor credit still have a chance to qualify.
- Pay for fuel costs. For most Americans, gas prices are rising much more quickly than their incomes ever will. Inevitably, then, some Americans will occasionally come up short on cash for gas. Payday loans come in denominations as small as $100 and as large as $1,000, in most cases. You can use a payday loan to cover your transportation costs until your next paycheck comes in.
- Discretionary spending. When the country is on the brink of recession, most consumers have a tendency to pull back, tighten their belts, and cut down on discretionary spending. This actually hurts the economy overall and can even contribute to a recession. By using a payday loan, consumers can buy the “luxury” items they might not otherwise be able to afford. In doing so, the borrower helps keep consumer spending up and perhaps even keep the recession at bay.
As you are driving you may see building on the site of the road that advertises check advances. Have you ever heard of a check advance? Odds are that you have, you just might not be aware of it. This is a financial matter, and remember what we preach about finances. You need to be aware of all things related to finances because you never know when you will be dealing with a certain aspect.
The Definition of a Check Advance
Did you know that a check advance is in fact a payday loan? You are getting an advance on your pay, which is exactly what happens with a payday loan. It still offers you the short term relief that you need for any emergency expenses that will arise. You still need to make sure that you do as much research as possible when dealing with a check advance. Get to know how the company works, and how they will give you money and expect you to return the money.
You might find that people use the term "check advance" as a front in order to get more money out of you. It should really be no different then a payday loan. But every company works its own separate way. That is why you need to pay attention and not just assume you know how the company will handle your advance and their business.
Using Money to Your Advantage
It is easy to believe that this is free money. You are getting a check, and you did not even have to work! Although, you do have to pay it back, and pay it back on time, every time. If you do not pay then you will be subject to higher fees and a higher interest rate on loan. You may be struggling for money initially, and forgetting to pay back does not do anything to help you. In fact, if will make you fall even more into debt, and it will be so much harder to come back from.
That is why you need to manage your money. Make a solid budget and know where your money is going at all times. This is something you should always do, but if you are not, then you should start right now. A good budget and money management can help prevent you from needing a check advance any time in the foreseeable future. That is something we all should welcome and truly strive for. It may take a little bit of work in the beginning, but soon you will really smart with your finances, and it will not take as much work.
Many people who have a payday loan also have other types of loans. You really need to know how to handle these loans and make them work for you. But what about using a payday loan as an auto loan? Is this even a viable option or should you stay away from this? It is important to manage your finances as best as you can, so let's decide if this will help.
Do You Need a New Car?
Well, if you do need that car then you should probably finance with money that is not from a payday loan. First of all, payday loans generally go up to $500, which is not a lot of money when talking about a car. It may help you, but how much help will it really provide? This is a short term loan and might not really be suitable for this use. You would probably be able to get away with using a longer term loan with your automobile. I know you really need this new car, but there are definitely some better options for you to use for the auto.
Remember, payday loans are a quick fix, and you will need to pay them back the next time you get paid. Auto loans and better off being paid over a longer period of time. You might be stuck taking out other payday loans in order to cover this payday loan, because some people can really have trouble pay the loan back. I know this sounds like a great way to get quick cash, and it is, but not for your auto loan. You may still need that car, so are there any other way to finance your car that is not an auto loan?
Paying for Your Car
You need a loan that gets you more money then the standard $1,000 of a payday loan. Go through your bank and try to get a loan there. Hopefully you have built up a great reputation with your bank in order to get a loan that can really help for you. This can be very helpful, because you know have a loan that can be paid off over an extended period of time, and will not cripple your finances right off the bat.
You might also want to look at used cars. These cars are not as sexy as new cars, in many people's eyes. However, they can really save you a large chunk of money. You can get some great used cars that are in really good shape. It is definitely worth a look on your search for the perfect automobile.
It may come where there is a time that you need to file for bankruptcy. Obviously this is something that you truly need to seek to avoid, but that may be too difficult in your situation. What if you have a payday loan still withstanding? Will you be able to file bankruptcy on that payday loan just like you normally would? Is this a special circumstance just like it seems everything else with payday loans are?
Is This Eligible for Bankruptcy?
A payday loan is a lot like an unsecured loan. You are not securing it with any of your assets; all you are doing is taking out a small amount of money and then repaying it when the time is right. Of course, the window for payment is much smaller then your typical unsecured loan. On average a payday loan comes due every two weeks.
Bankruptcy is a means by where all your debts are forgiven if you cannot pay back. But it is not as simple as that. It is not a quick and easy way out. You do not want to apply for 50 payday loans, not pay them off then declare for bankruptcy. When you declare for bankruptcy you forfeit your right to credit for the next seven years. You also may lose some assets in the process. Basically, your financial life is destroyed for a window of time, during which you will have trouble getting loans.
Payday loans can be included in this process. Of course you need to pay attention to the type of bankruptcy you need to follow, and you need to follow your state laws. If your payday loan was too much too handle then it can be included on a bankruptcy, provided your state allows for it.
The Last Step
If you are running behind on your payday loan, but not your others loans do not use bankruptcy! Bankruptcy should never be used for just one small payday loan. It should be used when all your debts and loans get too large for you too handle. But you must be willing to sacrifice your credit for the next seven years. Bankruptcy is not a quick and easy way too get rid of payday loan debt. It can, however, be used to alleviate payday loan debt if that debt and your other debts become too burdensome. You can manage your payday loans effectively with hard work and a good budget. For those times when that is not enough, bankruptcy may be your final debt option.
A payday loan by any other name is, well, still a payday loan. There are many ways to refer to a payday loan, but the result is always the same. You may have heard some of the following phrases used interchangeably with a payday loan. But do not let that confuse you from getting a payday loan. If you need some quick financial relief, then a payday loan is still your best option.
The Other Names of Payday Loans
The following are ways you might hear payday loans described as:
Paycheck advance, payday advance, check advance, cash advance, cash loan, check loan
These are the same exact things as a payday loan, just with a different name. The difference comes with how each company handles these loans. Some may charged more interest then others. That is why you really need to know how each company will handle its loans. You already know that there are some very big positives towards getting a payday loan. It gets you money right then and there that can be applied to the quick money needs you may have. You do not have to worry about much because the money is directly deposited into your bank account for you to use right away.
Getting a Bad Name
However you may refer to it, you know that payday loans sometimes get a bad name. Why is this? One of the main reasons is because people do not know how to successfully manage a payday loan. You need to pay it off right away on the deadline (the next pay period). If you do not pay back on time then you will be subject to more fees. You also need to make sure you do not take out more than one payday within a short period of time. You may need to extend a loan, but try not to take out more then one. You also need to budget your money when you take out a loan. Some people believe that the payday loan will be the budget, but that is not true. If you budget your money then you be in better shape for your financial future. Finally, you need to make sure you hook on with a payday loan company that is solid and has a good reputation. A good way to get scammed is to go to a company that does not have a solid history.
You need to make your payday loan work for you, no matter its name. It will make sure you do not refer your payday loan as another name:
You always hear about companies that offer to consolidate your debt at a low, low price. It does not matter if it is student loan debt, mortgage debt or credit card debt, you can get it consolidated quickly and easily. Well, what about payday loan debt? Can you consolidate that? Is it as easy as your other debt? You need to make sure that you repay your payday loan debt as quickly as possible.
Dreaded Payday Loan Debt
Debt is never fun, no matter the circumstance. You need to pull yourself out of debt as quickly and as effectively as possible. Debt can ruin your finances and really set you back in the long run. When dealing with payday loans you should not treat them any differently. Payday loans are unlike any other debt you may come across because of their short term nature. When you get your payday loan you need to pay it off quickly, but sometimes it is not as easy as that. Your loan could pile up with interest and fees that make it even harder to pay off. This only leads to more trouble with your payday loan debt. This is why payday loan debt is unlike any other debt, and feared more as well. So, how about consolidation?
The Steps to Payday Loan Consolidation
Like we stated earlier, debt consolidation is the process of combining all of your debt into one large debt with one interest rate. This is designed to make it easier for you to pay off. Instead of worrying about five debts, you now deal with one debt. You do not have to worry about multiple missed payments any longer. This is professional help that works with you to relieve your debt. You will then decide on a payment plan that works for both you and the company.
Payday loans are much harder to consolidate. Because they are short term, lenders may not be willing to take on this challenge. Consolidation on a payday loan should really only take place if you have let a loan get really out of control. You may not be able to work out a payment plan with the lender over a payday loan, but at least they are willing to help you. It is possible to consolidate a payday loan, but know that not everyone will do it. You also need to know that there will be different criteria for dealing with the loan because it is so short term and you should have paid off the entire loan already. You do not want your payday loan debt to spiral out of control, but if it happens, you have the options to consolidate.
Sometimes when you apply for a loan companies will want to check your credit references. This is not like applying for a job where they check to see what type of worker and person you are. These references will be based on how you deal with credit and how you have done with loans in the past. Is this something you have to worry about a payday loan company doing?
Who Would Refer Me?
Well, if you had to list references then you would list people who have handle your credit business. These people would know how you have done with payments. But the good part is you do not have list references for a payday loan. The company will not ask for, nor check, references. Hopefully this works out to your advantage. You just have to make sure that you are a U.S. citizen who is at least 18 years of age. You also need to have a checking account and make at least $1000 per month. Those are the only real requirements. If you are worried about references, then you really need to take a step back and ask yourself why you would be so worried. Maybe your credit score or credit history is not as high as you would have hoped and you did not want it to reflect poorly on you. If this is the case then you need to look at your credit situation and see what changes you can make.
Fixing Your Credit and Payday Loans
Payday loans offer the short term relief that could help your credit, if you manage it correctly. You can use this relief to pay off a bill that may be haunting you. Then, because that is finally paid off, you can start to work on your credit. Get out of debt as quickly as possible. This can be done in small steps. Every little bit helps along the way. You do not want to pull out more than one payday loan at a time because this could actually have the reverse effect. You may find that you owe more at that point then you ever did before.
You do not have to worry about listing any references because they will not be contacted. This will not hinder your ability to get a payday loan that can really work for you. If you are worried about your credit history, then ask yourself why you are so concerned. You may need to make some changes in your credit and work on fixing that score. It will really easy to pay off in the end, because it will benefit you greatly in the realm of credit.
One of the things that many people ask me is "will a payday loan help my credit?" This is really an interesting question and one that many people might actually not know the answer to. Anything that deals with money or credit should be taken very seriously. Payday loans are no different. So, let's discuss your credit and whether or not payday loans will help you improve your credit.
Payday Loans Helping Your Credit
If used correctly, payday loans can provide great short term financial relief. If you need to get a payday loan then you need to pay attention and pay it off as soon as you possibly can. Hopefully that helps you get the relief you can, and helps get your money situation more in order. When you have your finances stabilized you can then make a solid budget in order to help manage your money better. This will help you with bills. When you pay off your bills on time you will then see your credit score improve rapidly. Payday loans can also offer short term relief in order to help you avoid defaulting on payments. Defaulting on payments can have a very negative effect on your credit. Remember, payday loans are only a short term situation to your troubles.
Payday Loans Hurting Your Credit
The main troubles come when you use your payday loans and are not responsible about it. People do not take payday loans seriously and this is when they will get into the most trouble. When you take out a payday loan and then ask to get it extended many times, you will fall into trouble. Your loans will start to accumulate fees, and this may get to the point where you have no possible way to pay them off. This is when you find that you will default on your loan. You are now only a few short steps from bankruptcy. Your credit is really in trouble when this happens. This is a vicious cycle that will be hard to stop.
So the main goal is to pay attention. If you take out a payday loan, make sure you pay it off as quickly as possible. Do not let it linger around and let it accumulate fees and charges that you have trouble paying off. Every financial decision needs to be taken with as much care as possible. That is how you will find that credit will begin to rise.
You know about payday loans. You might even consider yourself the biggest payday loan expert on the block. We are glad you are so knowledgeable; everybody needs to catch up on all things finance. But sometimes there is one question that many people cannot answer. Why do we need payday loans in this country? It seems like it is such a simple question.
The Good of Payday Loans
Loans will always be a fact of life in America. People will always look to borrow money in order to better their lives in some capacity. Payday loans are just another way for people to get money. Although, this is short term financial relief. This allows people to borrow money and not worry about paying it back over a long period of time. This is a helpful quick fix that many people will want to take advantage of. Many people in the United State just cannot wait until their next payday, because unforeseen expenses happen all the time. Sometimes this type of loan gets a bad name. However, payday loans are like the other loans, sometimes people can take advantage of them. There are scammers out there, so you always need to keep a watchful eye. Payday loans will continue to be a fact of life in America because of that short term relief that is offered. You may not need to use a payday loan, but there are many people who do. Why would you personally need one?
Why Would I Need a Payday Loan?
If you need a short term loan that you can pay back in a few weeks, then a payday loan is right for you. Emergency expenses can strike at a moments notice, and there may be times that you just cannot pay. That is when you should look into the payday loan. You just need to make sure you are in a place where you know you will be able to pay back; otherwise payday loans can be trouble if they sit around for too long.
Payday loans will always be around in America. There will always be someone who needs money in the short term, and there will always be someone that will be willing to give it to them, with interest. You may discover that you do not need a payday loan right now, and may not ever need one. That is alright, and many people find that out. If you do need a payday loan then you should do your research and make sure you find the best fit for you. It could really pay off.
One of the things that makes a payday loan so difficult to pay back at times is the interest that is charged. This interest rate tends to be a little larger then a normal loan and can really creep up on you if you are not paying attention. With that said, is it possible to get a payday lender to stop charging you interest on a payday loan? How would you go about asking?
The Interest Factor
When you apply for the payday loan you will generally get anywhere from $100-$500. This amount will need to be paid back on the next pay date. The trouble comes when people forget to factor in the interest. Payday loans fall around 15% interest. If you take a payday loan of $300, then you will need to pay back $345. People forget about that extra $45, and then when pay day comes then realize that they do not have enough money to pay off the complete loan.
Fifteen percent is a safe number to assume. Payday loans can charge as much as 30% interest, if not more! This is where the trouble really comes. You may take out $100; because that is the maximum amount you can pay. That is the trouble. Interest will push that payday loan past your "maximum" amount. Now, is it possible that you can actually get them to stop charging you interest on your payday loans?
Stop the Interest, Please!
Right off the bat we will tell you that there is no way you can get the payday loan company to stop charging you interest. If you find one, then please let us know! Your interest rate is how the company makes their money. If not, then you are just getting free money, and that is too good to be true. So you can ask them to stop the interest rates, but you will leave with an answer that you are not very please with.
What can you do? Well you need to make sure that you do not take out a loan that is more then you can pay. That way the interest is more manageable. Then you need to pay back right on time. This will stop any hike in the interest rate, which can be a lot, making the loan a lot harder to pay off. That is the main way you can stop the interest rate from killing your finances and turning your payday loan into a very bad thing. Pay attention to your loan, and pay that thing off on time!
The payday industry has seen such a large boom over the past decade. A lot of this is due to the internet. Internet payday loans have become such a large financial matter. Yet, many people still do not use the internet for their payday loans. This may be because they like the old way better, but they might not yet trust payday loans over the internet. Are internet payday loans a good option?
Using the Internet
With the internet come the standard concerns. People are scared of theft and fraud which seems to loom large on the internet these days. This is why some people have trouble trusting payday loans that are done over the internet. But what some people do not know is that the security on the internet is at an all time high. If you really want to be safe, then make sure anytime you give out private information that it is done on a SSL page. This is the way that the companies stay ahead of the hackers. It is definitely a valid concern you have that the company can keep you safe.
If you do not feel safe then you need to contact the payday lender and ask them what they will do to keep you safe. This is very important and they must make sure that you are safe if they want your business. Also, you can look for an icon in the bottom right corner of the website. It will be an icon of the padlock and this will mean that there is now encryption on the site. If the website does not look legit, then you may have to take your business elsewhere. You can tell a lot about the company by looking at their website.
So You Are Saying They Are Safe?
If you do the research and make sure that the website has set up security measures, then you can proceed. If they are secured, then they should have it listed on their site somewhere. When you see all of this, then you know the site is secure and your payday loan process will be handled with great care.
The process is no different online, except the money is transferred into your bank account. You do not have to worry about any surprised. Just make sure you do the same research you would on a payday loan as if you were to walk into the company. You still need to pay back the payday loan on time regardless of how your obtain it. So take your payday loan and get the great short term financial relief you truly and truly deserve on online!
You might have noticed a small trend on some of our payday loan advice. You have probably seen the word "budget" pop up a number of times. Well, we talk about a budget and its importance for a reason! A great budget can do wonders for your financial life. If you budget correctly, then you can even avoid the need for a payday loan. But how do you do that?
A Great Budget and You
What you need to do is figure out how much income you take in every month. The amount needs to be after taxes, of course. This should only be the income you know you are going to make, not unexpected income. Only budget what you know you will have. It is important to know as close to the exact amount as possible, do not round off the number. If you do that then you are giving yourself money that is not there. Next thing you need to do is figure out every single bill that you will have each month. These include: mortgage/rent, phone, internet, television, insurance, credit card, etc. Subtract these from the amount of income you have coming in. It is also important to know when each bill is due. Know if there is a week where four bills are due, or if the bills are generally spread out throughout the month. These are the things you need to worry about first, after you figure out your income. Next you need to figure out how much you spend on other expenses. These expenses are things like: gas, food, investments, school tuition, donations, and anything else to which you routinely contribute. These are not expenses that are only done on a one time basis. This can help you because you now see how much money you have after your bills and needed expenses. Does that number look bigger then you thought it would? Hopefully it does. This means you know have what is called "disposable income." Do not let that phrase fool you, however. Just because it is disposable does not mean you should waste it. This is the money you can use for entertainment, but also have in case of an emergency. This is really how you set up a successful budget for you and your finances.
Beating Your Budget Demons
Now that you have a successful budget you can hopefully avoid a payday loan. You know what bills you need to pay and you know where your money is going during the month. Your bills will not surprise you any longer. Congratulations, you are now ahead of the financial game. That is more then many people can say. Hopefully your need for payday loans is broken, and your money is working harder for you now.
Loans can sometimes be a tricky thing. Many times they are very safe, and you really have nothing too worry about. Although, this is a financial matter, and sometimes there are people out there who are looking to scam you out of money anyway possible. How does this work in with payday loans? Do you have anything to worry about with payday loans? Just how safe are they?
Payday loans can be very scary to someone who has not educated themselves on the process. Getting cash is too good to be true, so people have to think there is a catch. All you have to do is pay back your loan on time and everything will be alright. Because of that insecurity, you must do your research on the company. Get too know how they handle the process and how much money you will be charged in order to get this loan. The more you learn, the more you will be able to decide if this loan is right for you or if you should go another route. If you at any time have any questions that you should not hesitate to contact your loan company. These payday loans are unsecured because you do not have to put up any of your assets in order to back your loan. This can be very good, because it helps you know that you do not risk your house, or anything near and dear to you.
You need to help protect yourself as much as possible through this entire process. Do not walk into a payday loan office and get money without be familiar with the whole process. Know how much you need, and then know when you must pay it back. Also be aware of the fees and interest that are being charged as well. You do not want to take out a loan and not be aware of fees. This is how you can get scammed out of money. Do not sign anything without reading it first, and make sure you do not agree to anything that you do not feel comfortable with. Many people get so excited about the money that they agree to anything, and that is how they get taken advantage of.
Unsecured payday loans are very safe. You need to make sure that you pay attention during the entire process though. Many people walk away very happy with how their payday loan turned out. The ones who get scammed or walk away unhappy do so because they got too excited over the idea of another payday. The bad lenders can sense your need for money and are looking to advantage of you. Do not give them a reason to do so.
Sometimes when you apply for a loan companies will want to check your credit references. This is not like applying for a job where they check to see what type of worker and person you are. These references will be based on how you deal with credit and how you have done with loans in the past. Is this something you have to worry about a payday loan company doing?
Who Would Refer Me?
Well, if you had to list references then you would list people who have handle your credit business. These people would know how you have done with payments. But the good part is you do not have list references for a payday loan. The company will not asked for, nor check, references. Hopefully this works out to your advantage. You just have to make sure that you are a U.S. citizen who is at least 18 years of age. You also need to have a checking account and make at least $1000 per month. Those are the only real requirements. If you are worried about references, then you really need to take a step back and ask yourself why you would be so worried. Maybe your credit score or credit history is not as high as you would have hoped and you did not want it to reflect poorly on you. If this is the case then you need to look at your credit situation and see what changes you can make.
Fixing Your Credit and Payday Loans
Payday loans offer the short term relief that could help your credit, if you manage it correctly. You can use this relief to pay off a bill that may be haunting you. Then, because that is finally paid off, you can start to work on your credit. Get out of debt as quickly as possible. This can be done in small steps. Every little bit helps along the way. You do not want to pull out more than one payday loan at a time because this could actually have the reverse effect. You may find that you owe more at that point then you ever did before.
You do not have to worry about listing any references because they will not be contacted. This will not hinder your ability to get a payday loan that can really work for you. If you are worried about your credit history, then ask yourself why you are so concerned. You may need to make some changes in your credit and work on fixing that score. It will really pay off in the end, because it will benefit you greatly in the realm of credit. It is such an important thing to do.
So you know that a payday loan is a short term loan designed to get you money quickly, whenever you are in need to funds. Now you need to decide which amount of money is right for you to be borrowing. It is not the same for everyone, and it requires a bit of thinking and planning. If you only need a small amount of money should you apply for a payday loan?
The Amount of a Payday Loan
The thing about payday loans is that they should only be used for short term financial relief. Plus, a lot of these payday loan companies will not even let you borrow a lot of money because they don't want you to be in over your head. They fear they will not get their money back in those situations. It is very possible to get $100 in a payday loan if you need it. It is not a large amount, but it may be enough for a small emergency. In fact, if you are going to get a payday loan then it should probably be for not much more than $100. It is a number that is a lot easier to pay back then $500 is. There will be less of a chance that you cannot pay, and then you will not be subject to the fees that may arise. Because this is a small number, there may be better ways of coming up with the money instead of using a payday loan. You need to consider all your options before you go through the process of getting a payday loan. In the end you may find that a payday loan is the best options, but it is completely possible that you will choose to go a different route.
Other Ways of Obtaining Money
There are some other ways that you can go about getting money that you need that are different from getting a payday loan. If you have a credit card then you can use some of the credit that you have been given. This is such a useful tool and you should not misuse it. Your credit is important because it shows you can handle money that people have lent you and you can pay it back within a timely manner. Some credit cards may even allow you to withdraw money from an ATM. The money you take out will then be added to your balance to pay off later on.
This is also a touchy subject, but borrow money from your friends can be good to. You will not be subject to interest rates that you cannot pay back and they may give you some extra time to pay back. Also, you can ask around and see if anyone is in need to part time work doing odd jobs. This may seem like something only a high schooler would do over the summer, but it can be a great way to get money that you did not have before. It also works well in short term situations.
All the payday loan companies advertise that ability to get you quick cash when you apply for a loan. This is such a helpful thing and can have really large benefits. But do you have to get quick cash? Can you have your money deposited directly into your bank account? Many people love the ability to get cash as they walk out of the building, but may also like the ability to get a direct deposit.
Getting Money Deposited Directly
If you do not want cash then direct deposit is a great option for you. It can be done by the payday loan company and it will not cost you anything. Maybe you do not think you will treat your cash responsibly, or maybe you just like using your card better. Just know that it might take a day or so to clear into your account, whereas you will get your cash right away. This may be the only main difference.
So how will they deposit it? When you go into the payday loan office you need to show them a few things. You need to prove that you are an American citizen who is at least 18 years old. Then you need to show them you have a job from which you can pay the money back. Finally you give them a voided check that will allow them to take the money out of your account when the time comes. So you are already bringing in a check which has your account number on it, they can just take that number you are giving them and put the money right into the account. It is not a difficult process for you and them to undertake.
Still the Same Payday Loan
If you get your payday loan direct deposited you must know that the loan still works the same way it would work if you got quick cash. You still need to pay back the loan on time, every time you get a payday loan. You need to set reminders for yourself as to when the money will be drawn from your account, and what specific day it is. The last thing you want is for them to go into your account to draw out money, only to find that there is no money left. You will then be subject to large fees and higher interest rates. This only leads to negative events. It is a great way to damage your finances. A payday loan offers you short term relief, but if you mismanage it then it can really turn into something that begins to harm you.
If you do not pay back your payday loan then there is a great chance that the payday loan company will send your loan to collections. These people have been known to be aggressive when they try to get back money that is owed. How do you avoid these collection practices? Also, how can you avoid defaulting on your payday loan in the first place?
Getting Sent to Collections
Now there may come a time when you cannot pay your payday loan back, even though you have the intention of doing so. If you have ever been in debt and can’t make payments then you know what it is like to deal with collections. The process of payday loan collections is really similar to other collection cases on unsecured loans. They will always start out the same way. You will first get a letter and a phone call where they will remind you of your debt that you still owe. If they start to call you at home and at work, and they do it quite frequently then you can send them a cease and desist letter. This is a lawful way to tell them to stop and it will give you a short amount of time to gather money without them calling you. But if you do not pay then you may find that a lawsuit will be filed against you. The following process is only dictated by your states current laws on the subject. This will determine what action the company can take against you. You probably can expect some kind of wage garnishment. Obviously you know what affect this will have your credit and your credit score. This situation needs to be avoided at all cost.
How Do I Avoid This Situation?
The best way to stop this situation is to obviously pay back on time. You need to avoid giving them any reason to ever contact you about the missed payments on the loan. If this is not feasible, then you need to contact the company right as you realize that you will not be able to pay back. You can then hopefully work on some sort of payment plan on your loan. This would be the most helpful situation possible. They may even make you take out another payday loan, at a higher interest rate, in order to pay back the first one. This is a less desirable decision, but it is still better then collections. You also need to formulate some sort of budget. This can be helpful in two ways. First it will help you be able to manage your money better so that you can pay back on time. Second it may help you find money that you did not even know you had. This will help you alleviate the need for any payday loan in the future. You just need to avoid collections, and do whatever it takes to do so.
We all know how important your credit report is. It is the main factor in helping determine your credit score which is turn helps you on out on financial matters like interest rates and loans. When you apply for and receive a payday loan, will that show up on your credit report? This is an important question because you must always know what is on your report.
Payday Loans and Your Report
Remember, if you do not pay back your payday loan it can then be taken to collections by the lender. This is definitely something that you want to avoid because it will end up on your credit report. Anytime you have something taken to collections it will result in a negative mark being put on your report. This is something that you really need to remember. This is a great example of how an unpaid payday loan can end up hurting your credit report.
Now, can a payday loan show up on your report and help your score? I would not go as far to say that the payday loan will actually improve your score. But, by paying it off and doing everything that is asked of you, you will not see a negative. Anytime you can avoid a negative it is definitely a positive. Plus, people can see that you handled your loans correctly and that you are not a big risk. It will help by showing people that you have experience with short term loans and you did well with it. It is always good to show people that you have a good history of dealing with loans.
The Dreaded Trap
Anytime you run yourself into debt you will have a negative impact on your credit score. That is why it is important to manage the payday loan you have, and make sure you do not take one more then one payday loan at a time. They can really add up. It you take out more then one then you may have trouble paying them off because of the interest involved and the fees that come with paying them late. That is when debt can affect you. Avoid debt should be your number one goal.
So payday loans can have a negative aspect on your credit report if you do not pay attention. You can turn that into a positive however by paying off the loan on time and following the directions. This will be a positive because it shows people that you can handle your loans and that you are not a risk to pay your loans later then the applied due date.
Not everybody in the nation has a bank account. That is not a problem, because it does work out well for many people not to have one. But a bank account has many great advantages. But what if you do not have a bank account and you need a payday loan? Is this a requirement for getting a payday loan? Does the fact that you do not have a bank account change anything?
The Importance of a Bank Account
When you go into the payday loan office you will need to show them proof that you have a job, in order to let them know that you have means of paying back. They do not actually make you show them proof that you have a bank account. In order to pay back the loan you will need to bring in a voided check in order for them to pull the money out of your account on the due date. How do you get checks? That’s right, a bank account. That is a sneaky aspect.
This is an easy way to pay back because they will just take the money out of your account on the proper day. This is less hassle for you because you do not need to remember to go back into the office on the due date. Plus, when you receive the funds, they can directly deposit the funds into your account. Overall, a bank account really saves you the hassle that may come with a payday loan.
What If I Do Not Have a Bank Account?
Now I know that you may not have the means to get a bank account right now. In fact, if that is the case then you should probably be working on that more then working on a payday loan. But then again you may really need the payday loan right now. Now just because you do not have the bank account does not mean that you cannot get a payday loan. A bank account just makes everything easier for you and the payday loan company. But you may luck out and find a company that does not require a bank account.
Know that it will be more difficult though. You need to still give them a plan of how you will repay. They may like it, they may not. Without a bank account, this process will become harder and odds are that you will not end up receiving loan. It is worth a try however. What you need to do is work on getting that bank account. It can really help you in ways that are not only the payday loan. Overall, it really helps you take control of your finances.
People get payday loans because they need a quick fix to help their income. It is possible that while you have a payday loan that your company may ask you to move for a new job. People even move out of the country for their job. So what happens if you leave the country and you still have an unpaid payday loan? Is it possible that you could get sued for this?
Could You Be Sued?
Payday loans are considered unsecured. This means that you do not have to back the loan with any of your assets. This does not mean that you will be able to get away with not paying them back. Does it surprise anyone that people would try and get away with not paying these loans back? Some people just assume that if they leave the country then they will not be followed and therefore they do not have to pay anything back. This is a mistake in thinking. It is possible that a company will not want to follow the customer and just let them leave. More likely, however, the payday loan company will hire some sort of collection agency. This agency will do everything possible to track you down and get the money back. Their action varies depending on the action allowed by that particular country. There may be cases where they are able to take legal action against you, but other cases may unfold in such a way that the collection agency cannot take any legal action against you at all.
What are My Options if I Leave the Country?
No matter if you stay in the country or leave the country it is still your responsibility to pay the loan back. It is what you agreed to when you took out the money. If you do not pay then know that your lender will find a way to get a hold of you in order to get their money back. That is why it is in your best interest to make sure you repay the loan before you need to go to your new country. If anything will prohibit you from doing so then you must contact your lender and let them know the situation. That way it becomes possible for the two of you to come up with some sort of plan for paying back. It will not be hard to get in touch with your lender, especially if you want to talk repayment. You need to make sure you avoid any hassle that can come your way and pay back on time. It is very possible that you could get sued if you do not pay your payday loan back. No one ever wants this result.
We all know that you can consolidation loans and credit card balances to make them easier to pay off. Can you consolidate a payday loan? This would be a very helpful thing to do, if at all possible. Many people are searching for ways to make their payday loan payments easier. So can you consolidate a payday loan? What are some of the ways that make payday loan repayment easier?
Is Consolidation Possible?
First you must know that your payday loan is not like your mortgage or credit card. You have been given as a quick fix until you reach payday. Note the term “quick fix.” This is not suppose to be a process that is long and drawn out. You get your money, then you pay it back next pay period. It is as simple as that. Unfortunately there are people who cannot pay it back the next pay period.
There is no simple answer to your consolidation question. Payday loans are a tough thing, because they are meant as that quick fix. So people who consolidate loans do not expect many people to want to consolidate. That is because they expect that the payday loans are already paid off. So really it just depends on the consolidator.
One thing that can cause a problem is the interest rates that a payday loan has. They can be so high that your interest payments are larger then your loan. This is a big problem. It will then be rare to find anyone who wants to consolidate that. So it is possible to find someone who wants to consolidate a payday loan. You just need to search long and hard. Know that you will probably get rejected a few times as well.
What Are My Other Options?
If you are hesitant about your repayment situation before you take out a payday loan, then that is probably a good reason not to get a loan. You always need to make sure that you will be able to repay. So what can you do? Well first of all you need to take a look at your budget. If you do not have a budget you need to start one. This will let you know where all your money is going. If you see that you are spending a lot of money on things that are not that important you may want to cut back. When you have a strong budget then you know you will be able to pay back. That is when you can take out that loan. The main thing you need to remember is that you must pay back on time. If that means waiting a little while for your repayment situation to be put in order, then you should probably wait.
Many times we have preached the positive effects that payday loans can have on your financial situation, but we understand that payday loans are not for everyone. In the end you need to do what is right for your and your finances. The following are some of the alternatives to payday loans that you may find more suitable for your current and future financial needs.
Do you have a credit card? If you do then you really need to use this to your advantage. You have been allotted some credit, so use it. Do not use your credit without discretion though. You need your credit to help you out for some purchases. You then can pay back the credit over the next few months. Payday loans make you pay back on your next paycheck.
It is a sensitive subject, but borrowing money from family members may work for you as well. It does not have to be a lot, but they will probably let you pay back at your discretion. I know that many of you do not like going to your family about money, but it may be worth a shot. You will want to let them know that you really will pay back and you are not just borrowing money for a bad reason.
Do you have any home equity in your home? A lot of people really build up equity but do not use it. This is a helpful way to get you some extra money to help around the house. Look into this option because a lot of people do not use the money they have built up because of their good standing in their home.
Help You Help Yourself
In order to have an effective alternative to payday loans you must do all you can to help yourself avoid that loan. Make sure you keep your debts as low as possible, and always work on paying that off. Your debt is so important and you cannot let that go without paying attention to it. The less debt you have the more your future loans will be able to pay off for you. You also want to manage the money you do have. You can still spend some of your money on entertainment, but make sure you take care of business first. This will help you alleviate the need for a payday loan any time in the future. So be smart about your finances. Manage the money you do have effectively and really make sure that it can work for you at all times.
You may have done the best you can on your financial record, but sometimes bankruptcy is just a fact of life. If you have run into trouble then you may have run out of options. There is also a chance that you have gotten a payday loan for some quick financial relief. Can this payday loan be included in Chapter 7 bankruptcy? This is a question many people have asked.
Payday loans are often times very hard to pay off. This really only makes things worse. Sometimes you will sign a contract with a payday loan company that says you cannot include this debt in any bankruptcy you may have. But you should know that this is a clause that cannot actually be enforced by a payday loan company. The truth is that this cause is close to illegal. This is why you need to make sure you undertake any bankruptcy with a highly skilled lawyer. Experienced lawyer will know that you can, in fact, include payday loans in your bankruptcy. Payday loan companies put that clause in a contract because they really want you to pay back in a timely manner. This is the way that they make their money. So know that you are able to put your payday loan on a bankruptcy, but only look into bankruptcy if it is your last option.
Fighting Off Bankruptcy
Many people will say that if you are getting a payday loan that you are only a few steps away from bankruptcy. This actually may be true, but know that it does not have to be true for you. The reason you need a payday loan is because you need short term financial relief. Therefore it is safe to assume your financial situation is currently not as good as you wish. This is why you need to set up a strict budget for your money. You need to get that payday loan paid off quickly, and then you need to work on all your finances. Do not spend money if you do not have it.
Bankruptcy will ruin your finances for 7 years. It is not a quick fix solution that you can forget about the next day. It will really hurt your ability to get credit, and people will start to ignore you when you ask for that credit. So treat your payday loans will as much care as you do all your other financial decisions. Everything will work out for you in the end.
This is never a question you want to ask, but it does happen. Many people intend to pay back their payday loan right on time, but circumstances arise and they are not able to. So what options does this leave you with? You still have to pay back at some point. You do not want to be stuck with that helpless feeling for very long. The following are some of the things you can do if you cannot pay back on time.
That Helpless Feeling
People generally have the intent on paying back a payday loan on time. But you know that feeling when you cannot pay back something on time. It is a very helpless feeling that many people really look to avoid. A lot of times the trouble stems from not exactly knowing what a payday loan truly is. You only have until your next pay period to pay back the loan. This may seem unreasonable, but when you think about it, it is fair. They are not giving you supplementary income; they are giving you an advance. It is only fair you will give them money when you get it next.
A lot of people feel like it is extra money when that is just not the case. Plus, if they ask for too much money then of course they would have trouble paying it off. Plus, when you do not pay off the loan you will be subject to fees and a higher interest rate. So it can all come crashing down very quickly. That is why you really need to act early when you discover that you will not be able to pay back.
Well Then, What Do I Do?
The first thing you need to do is approach your lender with the problem. Let them know that you may have trouble paying off and if there is anything the two of you can do about it. You do not want this loan to go to collections. You may only need a small extension on the loan. See if they will give you a couple days. But more likely you will need a payment plan. You might be able to get them to allow you to pay off the loan in installments. Because they are helping you then you might have to pay a little extra. But this fee will more then likely be better then the missed payment fees you will be subject to if you do not pay on time.
Know that you entered into an agreement when you took out the payday loan, and it was very clear on when you had to pay back. Your lender does not have to grant you a payment plan or extension. They could just charge you the extra fees right away. If you are able to work out something with them then you are very lucky for this new opportunity. You need to make sure you do not squander it. Make sure you pay on time this time.
As you know, financial decisions often have the thought of fraud looming large. Fraud is something you need to avoid at all cost. So when dealing with payday loans should you fear fraud? The following are some ways someone may try to fraud you out of money when you go for a payday loan. Just use your head, and always be aware of how your financial decisions are working.
Dealing With Fraud
Like any other industry, there are some less then reputable companies out there. They just want your money and they do not care how shady they are when doing it. These are some of the ways you may be able to figure out if you are dealing with shady payday loan companies:
- Some companies may ask you to pay a lot of fees when getting a payday loan. These fees will include an application fee, insurance fee, and possibly a processing fee.
- If they tell you that you are accepted before you even apply then be wary. This can should that they are desperate for your business. Desperate companies are hard to trust.
- If they prefer for all the funds to be untraceable, take note. There is probably a reason they do not want to go through the proper channels.
- If you have to call a 1-900 number in order to get a hold of them then you may want to back off. Why do they require you to call a toll number?
Make Sure You are Protected
It is so important to make sure they everything goes properly when dealing with a payday loan. This process needs to go smooth because payday loans can really be trouble if you do not pay them off. This is just a short term loan. If you default on this payday loan then you will be subject to a lot of bad fees that can really hurt you financially. Do not forget about those interest rates. Those can really add up if you do not play by the rules.
The overall goal is to eliminate fraud and payday loans. This is a process that needs to be treated with great care. A payday loan is a short term loan and you need to pay it off quickly. Make sure the company that you choose is a solid company that will really work for you and not look to steal your money. This is how you can really make your payday loan work for you.
Do I Really Have To Pay Back My Payday Loan?
Since payday loans are considered unsecured loans, they are not secured with any collateral or personal property, I know there are some people out there who think there aren’t really any consequences for failing to pay them back. But when you’ve got a payday loan due, it’s always in your best interest to get it paid off as soon as you can. I can’t stress it enough that you should do everything you can to get the loan paid off right away, because waiting will only make matters worse. At the very least, failing to pay back a payday loan by the due date will result in having to borrow another loan to cover it. Now you owe even more money and even more interest, which builds up quicker than most people realize. When people get this deep in the hole, many will simply try to avoid paying back the loan at all. This is definitely the wrong decision here, no matter what happens you should at least try to get in contact with your lender and try to work something out with them. Often you can strike up a payment plan with them to get the loans paid off over time.
What are the Consequences of Not Paying Back a Payday Loan?
There are several consequences you could face by not paying back your payday loan. By ignoring your loan, the lender will probably charge you extra non-sufficient funds fees when they try to cash your post-dated check. Besides the payday loan company’s fees, your own bank could charge you costly overdraft fees as well. Eventually, the lender will send off your debt to a collections agency, which will then call you and write you letters reminding you of your debt. Each agency is different, but some people have said that payday loan collections agencies can be more aggressive in their practice. Since the amount of most payday loans is around $500, collection agencies have more incentive to get it quickly so are known to call much more often and be more threatening than other types of debt collections. This can become an embarrassing situation as they’ll also contact your work place, references, and any other number they can get a hold of. Having a debt in collections can have an extremely negative affect on your credit score as well and although not all lenders will report the debt to a credit agency, they will report you as a non-paying customer to payday loan related tracking services. As far as legal consequences go, there have been payday loan companies in the past that have sued customers who haven’t paid for their loans. Usually they’re sued for purposely writing bad checks or some other type of fraud. Even though this type of charge won’t typically hold up in court, it’ll still end up costing you time and legal fees. While you may not face consequences like jail time for not paying back your payday loan, you’ll still have to pay back even more money and have to deal with collections agencies.
While payday loans are meant to be a quick fix for some unexpected finances or problems that arises, it’s not uncommon for them to go unpaid for extended periods of time. Some people take the loan out with no intention of paying it back in a timely fashion, which only creates more problems for everyone. Even worse, some customers have taken out payday loans in one state and then moved to another. This potentially creates a very messy situation, as each state makes their laws regarding payday loans. In this situation, whether or not legal action can be taken against you will likely depend on the cooperation between the states. Your payday loan lender will probably use a collections agency once they’ve found out that you are no longer within the state, who will then try to track you down. Once the collections agency has found you, they will most likely call you or send you mail asking you to pay back your debt. If they are unsuccessful in getting you to pay, it’s possible that they could try to get a judgment taken out against you. Again, this will depend on cooperation between the two states, but it is possible for them to legally force you to pay. No matter what happens that debt is still in your name and you are still responsible for paying it, even if you’re in a different state.
What Should I Do In This Situation?
In the complicated situation that you owe a payday loan lender money in a different state, you should always do everything you can to get it paid off as soon as possible. Although it may take a little longer than usual for a collections agency to get a hold of you, you will still be expected to pay the debt back. If you’re in such a situation, use the extra time wisely to save the money you need to pay back your loan. The extra couple weeks should be more than sufficient for you to get whatever you owe the company. As stated above, failure to pay back the loan could lead to legal ramifications, even if you’re in a different state. At the very least, the payday loan company can contact credit bureaus and other payday day loan services to inform that you are a non-paying customer. Should you be unable to pay back the loan as expected, contact your payday loan lender and let them know of your situation, they may allow you to pay back the loan in installments. Remember, payday loans are meant to be a short term fix to your financial needs, not like a conventional loan that’s paid back years later.
Lately, we’ve found that many first time payday loan users, and even experienced users, have a great deal of specific questions about how the payday loan industry works. They’ve heard rumors or second hand stories from other people about it, some of which may be true and some of which aren’t. We always try to give users the most objective answer and advice about the subject. Recently we were asked if it is possible for a payday loan lender to sue someone over an unpaid payday loan. It’s a difficult question to answer since so many states have different laws concerning payday loans and every single lender has different policies, but generally speaking, you can be sued for an unpaid payday loan. Of course, the lender would most likely prefer to avoid such a situation, as it will cost them time and resources. Most lenders will try to get you to pay back the money on their own and then eventually send you to a collections agency if they’re unsuccessful. Suing you is usually their last resort, but it can be done and payday loan companies have won their cases before.
What Should I Do If I Am Sued?
If you have unpaid payday loans and have been sued or will soon be sued by the lender, here’s some help in advice in what to do next. This is a serious matter and you should do everything you can to prepare yourself.
- Unless you are familiar with the law and small claims courts, you should probably seek legal advice as soon as you can.
- Keep in mind that most small claims courts don’t use lawyers, so you’ll be representing yourself, of course you can get legal advice to help you prepare.
- Many states have different laws regarding payday loans so be sure to look up the laws regarding your state.
- Find all of the original documents pertaining to the payday loans you borrowed and proof of any payments you made to the lender.
- Show up to your court date! Sounds obvious, but if the payday loan lender doesn’t bother to show up, you’ll win the case by default and not have to pay back the money.
Considering the difficulty that some people have paying back a payday loan, its no wonder we receive so many questions about the consequences of failing to pay back a payday loan. This one specifically asks if you can be sent to jail for not paying back your loan. Before we get to that, let’s talk about how people even get to the point of wondering this type of question. What typically happens is someone takes out a payday loan and doesn’t realize they only have about two weeks to pay back all of that money plus interest. Left with few other options, they take out another payday loan so they can get by till their next check, but once again, they’re in the hole. After going through this cycle a couple times, many people simply cannot afford to take out another loan, so they avoid all contact with the lender. That’s when they wonder if they’re doing something illegal that they could be jailed for. The short answer to that question is no, you cannot go to jail for not paying back a payday loan. Some payday loan companies may try to tell you that you can go to jail because not paying back the loan could be considered check fraud, but they’re just making threats in hopes that you’ll pay. However, that doesn’t mean that a payday loan company cannot take other forms of action against you.
What Legal Action Can Be Taken Then?
While you can’t go to jail for failing to pay back your payday loan, keep in mind that lenders have other means of getting their money back. Payday loan lending is still a fairly new concept in terms of the law, so there is no uniform way in dealing with it and many states have different laws regarding it. If your payday loan lender can’t get you to pay back the loan on their own or through a collections agency, there is the possibility that they could take you to court over the matter. Lenders have the right to collect delinquent loans using all of the legal remedies, this includes filing a judgment or civil court action. With the help of the courts, payday loan lenders could garnish your wages or force you to sell of assets in order to pay the loan back. It’s an undesirable situation to say the least and can all be avoided by simply paying back your loans on time or at least contacting the lender. You might be surprised that some lenders are willing to negotiate a settlement or an extension on your payday loan in the interest of getting their money back. To sum things up, you cannot go to jail for not paying back a payday loan, but you can be forced to pay the money back if the lender takes you to court over it.
It’s hard to get to all the questions we receive every day and we try to answer the ones that get asked the most often. But here’s a good one we hadn’t heard before, “can a payday loan company go into your account to get money you owe them?” This really depends on where you got your payday loan and that company’s policies, but there are definitely a couple situations where a company can get the money from your account. Probably the most common way for a payday loan company to get their money back from you is to have you leave a post-dated check with them at the store. On the day that the loan is due back, the company will cash the check and the money comes out of your account. So in a way, the company is going in to your account to get their money back. If the money is not there, you’ll probably get charged an insufficient funds fee, but they won’t be able to go back in to your account later. This situation applies for most payday loan stores that you have to visit in person; however, the process is done differently for online customers. When you apply for a payday loan online, the company will usually ask for your bank account information, this way they can deposit your loan right in to your account by the next business day. It’s far more convenient than going to a store and waiting to get your payday loan, but it also means that they will withdraw the balance due from your account. On the day the loan is due back, the company will simply withdraw the amount from you account. If the money isn’t there though, your lender will probably charge you with a fee and you’ll have to extend the loan. On top of that, your bank may also charge you overdraft fees. These two situations are pretty much the only times when a payday loan company can go into your bank account to get the money you owe them.
What Should I Do If I Don’t Have the Money In My Account?
If you know your lender is going to withdraw money from your account and you don’t have enough there, you should contact them immediately. The last thing you want to do is pay multiple fees from both your lender and bank. These overdraft and non-sufficient funds fees can quickly add up to over $50, making it even more difficult for you to pay off your loan. Easiest thing to do in this situation is try to work out a plan with your lender. Some lenders may give you an extension if you pay back the interest on the loan, others may ask that you take out an additional loan to cover what you owe, and others could let you pay back the loan over the course of a couple months. Which ever option your lender gives you, take advantage of it and try to pay back your loan as soon as you can.
If you’ve ever been unable to pay back a payday loan before, you may have wondered if there was a way to negotiate an agreement with the company. Of course, you won’t be able to negotiate not paying for the loan at all, but there’s a chance that you can work out a payment plan of some sort. You’ll want to contact your lender as soon as possible, don’t wait until the day the loan is due back. Negotiating with your specific payday loan company may or may not be possible, depending on several factors. The decision really comes down to the company that you owe the money to and whether or not they’ll be willing to work out an agreement with you. Negotiating could also depend on how large of a loan you owe them and how late you are on the paying it back as well. With any luck, the company may decide that their best of course action would be to just get back the money you currently owe them, as opposed to making you take out more loans. If you are able to negotiate a pay plan with the company, they’ll probably give you about a month to pay back whatever you owe them, but may tack on some extra interest to compensate. To sum it all up, yes it is possible to negotiate with a payday loan company if you cannot pay back, but what if they don’t allow you to negotiate?
What If My Lender Doesn’t Negotiate?
It’s definitely possible that your payday loan lender doesn’t allow negotiations, in which case you’ll need to find a way to pay off your loan as quickly as possible in order to avoid taking out more loans. Keep in mind that it is in your best interest to get the loan paid of as soon as you can, so try to make every sacrifice you can for awhile, eat cheap, save on gas, etc. Since you’ve taken out a payday loan already, you’re probably dealing with money issues as it is so you’ll have to get creative. The easiest option may be to simply open a new credit card and place the balance of the loan on it; the interest will almost certainly be lower than that of a payday loan. However, you may not have the credit necessary to get a new card or a card with a high enough balance. If you only need to free up a couple hundred dollars or so, you could try delaying payments on your other debts by calling your creditors. In the case that your debt situation has gotten a little out of control, you might want to consider a debt management plan or debt consolidation service. These programs can help create a personalized plan to help you pay of your debt and negotiate new rates with your lenders. However you choose to pay back your pay day loan, remember to do it as quickly as you can or you’ll only be paying back more.
What Happens If I Have Two Unpaid Payday Loans?
Ever had a string of really bad luck or unfortunate events happen to you when you were least prepared to deal with them? Maybe you had your car break down after you already spent your last pay check or had four bills due all the same week. These situations tend to pop up sometimes and several of them at once can be really problematic. That’s how many people end up having multiple payday loans due at once with no way to pay them off. If this ever happens to you, you’ll likely be hearing from your payday loan lender very quickly. They’ll probably ask that you take out more payday loans to cover your last ones. Eventually, if you don’t pay back the loan or take more loans out, the lender will hand you off to a collections agency. Dealing with collections agencies can be frustrating and stressful, which is why you should contact the payday loan lender before the debt gets too out of hand. Explain your situation and see if the two of you cannot work out a solution. However, some companies may be less forgiving and could even press charges for intentionally writing bad checks. Fortunately, there are some other steps you can take to pay off the loans.
So What Are My Options?
If you have multiple payday loans you need to pay off and can’t seem to get any leeway from your lender, you have several options at your disposal. As you probably know, payday loans are meant for people who need cash quick and don’t have the credit score to get a credit card or loan, if that’s the case for you, review your credit score for errors and try to get approved for a low interest credit card. This would allow you to transfer some or all of your payday loan debt to the credit card, depending on how high of a limit it has. You may have other monthly bills and payments to make, but you can often call your credit and get the payment delayed or reduced. Another alternative you could take is signing up for a debt consolidation program or debt management counseling. These programs basically roll up all of your debts in to a one large single debt. The debt consolidators negotiate with your lenders to get you a lower monthly payment and possibly eliminate the interest on the debt. It has been effective for some people and would open up some money to put toward the payday loan debt. Finally, it may be time to make some serious lifestyle changes if you haven’t already. It’s always difficult to change the way you live, but if you have multiple payday loan debts unpaid, then it’s definitely time to start cutting back and saving every penny.
Here’s a situation that some people who borrow money through payday loans get themselves in to: They’re desperate to get some quick cash so they take the fastest route possible with a payday loan. It’s a quick fix and takes care of their problems initially. The problem is, some people don’t think through what they’re doing very carefully. They simply don’t realize that a payday loan is basically borrowing money from their next check, because they’ll owe all that money back to the lender at their next pay check. Next thing you know, they’ve rolled over three payday loans and owe a much larger amount of money than they originally borrowed, with no way to pay it all back. I know it seems like an easy problem to avoid, but you’d be surprised how often it happens to people. So what happens now? Well if someone can’t pay their payday loans and doesn’t make contact with the company, they’ll eventually be handed off to a collections agency. Most collections agencies will start by sending off some letters demanding that the person pay back the money they owe. Some collections agencies will even go as far as to threaten the debtor with jail if they don’t pay, these are just threats though. Then the person may start receiving phone calls at home and at work, although these can be put to a halt with a cease and desist letter. If the debtor still doesn’t contact the collections agency or loan company about the debt, he or she could find themselves as the defendant in a law suit. A lawsuit could call for wage garnishment or property liens. It’s a situation you shouldn’t ever have to get yourself in to as you’ll have plenty of chances to avoid it.
Tips For Getting Your Payday Loan Paid Back
Obviously, you don’t want a lawsuit taken out against you. It turns in ugly situation in to a disastrous one, but it really should never come to that. When you take out a payday loan you’re already in a situation where you’re short on money. The best thing to do is plan out a budget even before you take out the loan, that way you’ll be sure to have the money to pay it back. If you’re unable to do that for some reason, contact the payday loan company and try to negotiate some sort of payment plan that gives you more time. Some companies may not allow this, but at some point they’re going to just want to get their money back and see it’s in their best interest. You could also consider using a credit card to pay back part of the loan if you have room on it. No matter how you choose to deal with payday loan debt, understand that a collections agency could eventually file a lawsuit against you if you fail to pay, which is probably the last thing you want to have happen. Do yourself a favor and take care of the loan as soon as possible because the consequences only make life more difficult.
If you’ve ever taken out a payday loan, you know it can sometimes be difficult to finally get it all paid off. Since you’re borrowing money from your next paycheck, you have to make sure you can make that up, plus the added interest. It adds up pretty quickly and if you’re not careful, you can find yourself taking out multiple payday loans till you finally catch up. Some people may even be tempted in taking out a much larger bank or government loan in order to pay off the payday loan debt. If you happen to be in a situation where you can’t keep up with your payday loan debt, you could consider taking out a regular loan to pay it off as they almost always have a lower interest rate. However, one of the main reasons people don’t do this is because these loans require at least an average credit score and many people who take out payday loans already have a poor score. In most cases, they’ve already tried to take out a regular loan but can’t get approved for it, which is why they turn to payday loans. It’s important to remember that payday loans are only meant for short term financial problems and should be paid back promptly, otherwise the debt will add up quickly. Since many people can’t get approved for a regular loan to pay off their payday loans, they often take other measures to make payments.
Other Ways to Pay Off Payday Loans
You don’t have to continue taking out loan after loan in order to pay your debt off. Follow some of these tips to help save money and pay down your payday loan debt.
- Your first step should be borrowing the least amount of money as possible from the payday loan lender. Don’t take anymore than you need or you’ll be paying more in interest.
- If you find yourself going back week after week to take out payday loans, set goals for yourself to slowly borrow less. For instance, make it top priority that you take $50 less each time you borrow.
- While you may not be able to take out a regular loan, try applying for a couple credit cards. You may be able to find some that offer a low introductory interest rate or other benefits.
- In case you aren’t already doing it, you should be cutting every corner you can financially. Use coupons, by generic, no major purchases, etc.
- If you’re completely unable to lower your payday loan debt, you might consider a debt consolidation or debt management counseling program to help you.
Have you ever had to deal with the burden of an unexpected bill or an expense you can’t afford to pay? Most often, people take care of these issues with a credit card, but some of us don’t have a credit card or have already used all of the available credit. It’s in these trying situations that many people turn to payday loans. In the 1990’s, payday loan companies became very popular and can be found almost anywhere today, including online. Payday loans go by many names; some refer to them as cash advance, check advance loan, or a deferred deposit check loan. In general, they are all the same thing, a small and short term loan. The loans are usually borrowed for only a week or two, as you typically pay them back after you’ve received your next paycheck. Payday loan lenders make most of their money through the interest they charge on the loans, which is much higher than a typical loan since the money is borrowed for a much shorter amount of time. Though the interest rates range from company to company, typically it is about $15 dollars for every $100 borrowed. They’re unlike every other type of loan because they’re the only ones that offer cash right away, where other loans would give you a check after several weeks or even months.
How Do I Get a Payday Loan?
The main reason why payday loans are so popular is because of how easy and convenient they are to get. You can have thousands of dollars in debt and a terrible credit score, but you can still take out a payday loan. For some people, it’s the only type of loan they are capable of getting. Taking out a payday loan has become a very simple process. All you really have to do is go to a payday loan store with your ID, a pay stub from work, and possibly a bank account statement depending on the lender. From there, you’ll simply fill out some paperwork and you can get your loan in a matter of minutes. Some lenders will take your debit card number or ask that you leave a postdated check, that way they can simply take the money from your account one the date it is due. Lenders differ in how much they allow you to borrow, some only offer increments of $500, while others may let you any amount up to $1,000. If you are unable to pay back the amount of the loan, you may be asked to take out another payday loan for the amount you have left to pay. Some consumers have found themselves paying much more than the original loan amount by not paying back their loans on time. In the past several years, some payday loan companies have even taken their service online. Now you can actually take out a payday loan from your own home and the money can be deposited directly in to your account the next business day.
Recently, I had a friend tell me he was thinking about taking out a payday loan to use for the next couple days before his next paycheck. I asked what he needed it for and why it was so urgent. Turns out he just wanted it to use for some of his quick purchases like getting gas and grabbing some groceries. So I asked him if he needed either of those immediately and couldn’t wait till he got paid in few days. He didn’t, as a matter of fact, and I proceeded to tell him that this probably wasn’t the best time for him to get a payday loan. Sure he could get one and there’s really nothing stopping him from doing that, but what’s the point really? He isn’t in desperate need of cash and could easily get by until his paycheck arrived. Payday loans are meant to be used in situations where you have to get cash on the spot because of a pressing need, which he didn’t have. You can get a payday loan whenever you want for whatever reason, I’d just recommend you only get one when you really need it. Taking out a payday loan means you’re borrowing money from your future paycheck and will have to pay it all back with some added interest, no point in paying interest on your own money if you don’t have to. In the case that you are financially stable and need some money for a few purchases, there are probably better ways to go about it.
Tips for Managing Your Finances
- Set a weekly budget for yourself. Figure out how much money you typically spend each week, and then try knocking $25 off it. This way you’ll still have some money before payday.
- Start a spare change jar. Every time you get change for a purchase, throw it in the jar and see it what it adds up to every couple weeks. If you use a debit card more than cash, sign up for a bank account that rounds up your purchases and deposits the change in a savings account.
- Try cooking food instead of eating out or buying prepackaged meals. It’ll take longer but is healthier and much cheaper.
- You’ve heard it before, walk or take public transportation instead of driving. You’ll save money on gas and help the environment too.
- Find one thing you can do without or a cheaper substitute for it. For instance, get a lower cell phone plan, cancel the extra movie channels on your cable subscription, find a cheaper gym membership, etc.
Taking out a payday loan is a private matter, I can definitely see why you might not want other people to know about it, especially your fellow employees. The question of whether or not your payday loan lender would contact your employer depends on that company’s specific policies. Your best bet is to simply ask the company when you go to take out the loan or check the company’s policies online if available. In my experience, I’ve found that the majority of payday loan companies do not contact your employer. They’re highly aware of the sensitive nature of a payday loan so generally you can assume they won’t contact your employer. However, there may be certain situations where they will have to. For example, most companies ask that you bring in a recent pay stub to show that you are employed and have a steady income. A company may contact your employer just for proof of employment if they have any issues with your pay stubs or you cannot provide them. Another situation where your payday lender could contact your employer is if you fail to pay back your loan and do not contact the lender. Eventually, your debt will get sent to collections and they will often take any means necessary to get in contact with you. This means calling you, sending you letters, calling any references you listed on your application, and contacting your employer. That’s a situation we’d all like to avoid, so make it easy and pay your loan back as soon as possible.
What If My Lender Does Contact My Employer?
If your payday loan lender does contact your employer, they’re probably doing so for good reasons, such as the one’s mentioned above. In the case that you aren’t able to pay back the money when it’s due and a collections agency begins contacting your employer, you should write them a cease and desist letter. By law, the collections agency and lender will have to stop contacting you and your employer. Beyond that, the only other reason your lender would contact your employer is for proof of employment and income, in which case they probably would not even explain that the verification is for a payday loan. All things considered, you can probably assume that your payday lender will not contact your employer as long as you pay the loan off on time and provide them with accurate pay stubs, but if you’re worried about it, just make sure to ask the company about their privacy policies.
Payday Loan Collections Practices
Ever been in debt and unable to make payments? You probably already know what it’s like to deal with collections agency and their threats. Payday loan collections practices are pretty similar to other unsecured creditors. I know some people have told me some horror stories about how aggressive payday loan collection practices were, but turns out they’re really no different than other companies. Generally, if you default on your payday loan, they’ll start by sending you letters and calling you to remind you of your debt. If they begin calling your work, you can usually stop all the telephone calls by sending the company a cease and desist letter, which requires them by law to stop. If you still don’t pay, the collection agency may eventually file a lawsuit against you. State law then dictates what type of action the company can take against you, but you’ll probably be faced with wage garnishment or property liens. I’d highly recommend avoiding any kind of law suit, it will only make your credit situation worse. Even before the company starts sending you letters you should try working out a solution with them. By working with the company, you may be able to work out a payment plan to slowly pay back your loan and avoid any further problems. Of course, your best option is to never let your loan default in the first place.
Tips to Avoid Defaulting
There’s really only one good way to deal with collections and that’s to avoid ever giving them reason to contact you. I completely understand the need to take out a payday loan, I’ve used them before myself, but only when I absolutely had to. After that, I got my next paycheck and paid them back right away. You shouldn’t take out a payday loan unless you really need the money and know you can pay it back quickly. Also keep in mind that you’re basically borrowing this money from yourself because it will come out of your next paycheck. That means you might be a little strapped for cash after you pay the money back to the lender so plan your finances carefully or you’ll be borrowing again. It’s a cycle you want to avoid because all too often in ends in a debt you can’t pay back and a collections agency giving you a call. Try planning a weekly budget and follow it strictly so you know you’ll have enough money to pay back your loan. If it looks like you’re going to have trouble paying your debt back, talk to the company directly and try working out a payment plan. You might have to pay a little higher interest, but the company may give you several months to pay it all back. In the end, it all really comes down to you being responsible with your money. If you are, you’ll never have to run in to a collections agency.
Where Did Payday Loans Come From?
Payday loans are basically a form of credit or a short term loan, both which have been around for ages. At the very least, the idea of lending can be traced back to thousands of years ago when Rome was in power. While it’s unclear who the very first person to think about starting an official payday loan company was, they began popping up around the United States in the early 1990’s. The process really got started by companies that introduced check cashing loans, which were very similar to the payday loans we have today. During this period of time, the economy was on the rise and consumer demand was steadily increasing, leading to the rise of payday loans. This new type of loan was extremely convenient; you could walk out of a payday loan store with cash in minutes. Payday loan companies don’t approve people for loans based off credit history, so even those with bad credit took advantage of them. It took a couple years, but payday loans grew fairly quickly into the service you see today.
The Internet Age & Controversy
In the past several years, companies have managed to take their services online, offering people payday loans that could be deposited in bank accounts immediately. Lenders online and in stores do not require a credit check for a payday loan, meaning all you really need is a job to get one. Though the payday loan process was popular almost from its inception, some accused the industry of taking advantage of other’s misfortune by inflating loan interest rates, which forced some people even deeper in to debt. Those who relied too heavily on the loans found themselves in a never ending cycle of taking out loan after loan. Today the government is in charge of regulating the interest rates on loans and helps keep their cost reasonable, although some still believe it is an issue.
Payday Loan Interest Rates VS Not Paying Bills
You may have heard arguments that payday loans still have too high interest rate today, it may be higher than a car loan or anything that is much longer term, but it allows for a convenience that no other loan can. Only with a payday loan are you able to possibly get cash in your pocket or bank account the next business day after you apply for it. This is one of the primary reasons payday loans skyrocketed in popularity, people who might have failed to pay rent or their power bill on time could do it easily now. It’s also worth considering that even though payday loans have a higher interest rate than some other loans, you’re better off paying $10-15 in interest rather than not paying a bill on time or getting pegged with an NSF. Many companies charge as much as $25 for late payments and possibly even more if you bounce a check to them. Imagine not being able to pay two or three bills on time because you don’t get paid till a week later, you would incur over $50 in late fees easily. Not only that, your credit score could also be negatively affected by failing to pay a bill on time. That’s the convenience of a payday loan and why they went from niche use in the early 1990’s to hugely popular today. With the advent of online payday loans, the service can be used from anywhere nation wide at all hours of the day.
I’m 20 Years Old and Need Cash, Should I Get a Payday Loan?
Well as long as you’re at least 18 years old, you’re capable of getting a payday loan, but whether you should or not is another question. First off you should ask yourself a couple of questions, most importantly, do you have a steady job and income? Every payday loan company will want to see at least one of your recent paychecks as proof that you are employed and to help determine how much money to lend you. At 20 years old you probably don’t have a huge income and you may not get approved for a loan higher than $500. Think about how much money you are looking to take out and if you’ll able to pay it back promptly, typically within two weeks. This is where many people make a mistake, if you’re taking out a payday loan a week before you get paid next, make sure you understand that you won’t really be receiving a full paycheck for another three weeks, assuming you are paid bi-weekly. If you take out a loan for all or most of what your future paycheck will be, understand that three weeks is a long time to go without any cash flow, so you’ll want to be careful financially during that time period. Also, consider why you’re taking out the loan and if the reason is really worth it, you might reconsider if you’re using it just to go shopping.
Reasons for Getting a Payday Loan at 20 Years Old
While some people might think you don’t really have any good reasons for needing a payday loan at just 20 years old, there are actually many legitimate reasons. Let’s say you have to drive to work and school every day, but one day your car breaks down. You take it to the shop only to find out the repairs will cost you $1200. Even though you’ve got some money saved up for such an occasion, you’re short $400 and don’t have enough room to put it on your credit card. A payday loan would make perfect sense in such a situation. Or, maybe you’ve got your phone bill and power bill due the same day, but you don’t get paid for another week. Rather than receiving what could be over $50 in late charges, you could take out a payday loan to take care of the bills. The amount of interest charged on the payday loan would most likely be less than the late fees and you wouldn’t run any risk of damaging your credit score. A payday loan can also be very useful if you need the money immediately, maybe you’re about to start school but haven’t purchased your books yet. You could a payday loan online in a matter of minutes, the money would be waiting for you in your account the next business day. These are just some of the many situations you may find yourself in at 20 years old and a payday loan is the perfect solution to all of them. So if you’re young and wondering if you should get a payday loan, the answer probably depends on what you’ll be using it for and whether you can afford to pay it back, but there’s really no reason why you shouldn’t get one if you want one!
Many of us have to deal with credit card, car, rent or home bills that are due at different times every single month. We usually get by, but every now and then we get caught in a bind where we have several bills due at once, but don’t get paid for another couple days. Often a victim of this predicament, I’ve found that payday loans are one of the easiest and most convenient ways to cover your bills in time. Payday loans are simply very short term loans, they’re meant to cover your immediate expenses with the idea that you’ll pay the loan back at your next paycheck. The loans come in different increments, you can usually borrow any amount up to $1,000. There are thousands of payday loan companies out there, they may differ in how much of a loan you can borrow, how much time you have to pay the loan back, or how much of an interest rate is tacked on to the loan. These days, you can even apply for a payday loan online from your own home and have the money sent to your bank account almost instantaneously.
How Do Payday Loans Work?
One of the reasons payday loans have become so popular is due to how easy of a process it is to get them. Typically you would go to a payday loan office with some necessary identification, a couple paystubs to confirm your employment, and a bank account statement. As long as you’re 18 years of age, that’s really all that’s needed to get yourself a payday loan. Once you’ve gone to the office and filled out the required paperwork, your lender will provide you with the cash right then and there. Depending on the company, the amount of cash you can take out ranges from $100 to $1,000. Of course, there will also be some interest added to your loan. Each company differs in their interest rates but you can expect it to be anywhere from 10% - 35%. Some lenders may ask that you write them a check for the amount of money you’ve borrowed plus accumulated interest, then they’ll cash the check after you’ve gotten your next paycheck.
This Sounds Like Every Other Loan, What The Difference?
The difference between payday loans and other types of loans is that you can get your money in cash at that very second. No other service offers this advantage, some credit unions have attempted to offer similar terms but have so far been unsuccessful. Payday loans also have a very short length compared to other loans, they’re almost always due in two weeks or less, though some companies may offer payment plans. As you can see, payday loans have great advantages over other forms of loans, you can always count on them to get you out of a jam. With their availability online now, getting the money you need has never been easier.