By admin
Most any large city has a number of small shops offering payday loans. They’re often found in strip centers; sometimes they double as pawn shops. They have a simple business – they lend you money until your next paycheck. The system is pretty convenient; you write them a postdated check for the amount you’re borrowing plus interest. On your next payday, they cash the check and your loan is paid off. What many people who use payday loan services fail to realize is that the interest rates charged by these firms are substantial, often reaching the equivalent of four hundred percent per year!
The interest rates charged by payday loan stores varies from state to state, but a rate of 15-17% for two weeks is not unusual. This translates to 390-440% per year, which is a staggering amount of interest to pay on a loan. The lenders say that these amounts are fair, and are necessary to cover the overhead associated with running a business and to account for a substantial number of borrowers who fail to repay the loans. That may be true, but that high of an interest rate can turn the “convenience” of a payday loan into a nightmare. Many borrowers are relatively low paid blue-collar workers who live from paycheck to paycheck. Someone who is a “bit short” this week may also find themselves short again on their next payday. If they fail to pay back the payday loan, the interest continues to accrue and additional penalties, such as returned check fees, may apply. It is quite common to see loans of $300 or so turn into debts of several thousand dollars, especially if the borrower compounds the problem by borrowing funds from a second payday loan store to pay the loan from the first one.
Several states have already passed laws capping the interest rates that may be charged on payday loans. Others will undoubtedly follow. A good alternative to the payday loan would be to take a cash advance on a credit card. There is usually a fee associated with a cash advance, but the annual interest rate, combined with the fee, is still a lot cheaper than a loan at 400%. Anyone who is considering taking out a payday loan should read the terms carefully. Otherwise, that “loan until payday” could be there to haunt you for a long time.
By admin
Payday loan companies gives the borrower the amount of the check minus their fee (They get their money up front).
Fees charged for payday loans are usually a percentage of the face value of the check or a fee charged per amount borrowed for every $50 or $100 loaned.
A cash advance loan secured by a personal check - such as a payday loan - is very expensive credit.
Let’s say you write a personal check for $115 to borrow $100 for up to 14 days. The check casher or a payday loan lender agrees to hold the check until your next payday.
And, if you extend or roll-over the loan - say for another two to four weeks - you will pay A Fee Each Time you get a extension.
Under the Truth in Lending Act, the cost of payday loans - like other types of credit - must be disclosed.
Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis) which when you do the math can be very high.
Top 10 Alternatives to Payday Loans!
1. There are other options. Consider these possibilities before choosing a payday loan:
2. When you need credit, shop carefully. Compare offers. Look for the credit offer with the lowest APR - consider a small loan from your credit union or small loan company, an advance on pay from your employer, or a loan from family or friends.
3. A cash advance on a credit card also may be a possibility, but it may have a higher interest rate than your other sources of funds: find out the terms before you decide. Also, a local community- based organization may make small business loans to individuals.
4. Compare the APR and the finance charge (which includes loan fees, interest and other types of credit costs) of credit offers to get the lowest cost.
5. Ask your creditors for more time to pay your bills. Find out what they will charge for that service - as a late charge, an additional finance charge or a higher interest rate.
6. Make a realistic budget, and figure your monthly and daily expenditures. Avoid unnecessary purchases - even small daily items. Their costs add up.
7. Also, build some savings - even small deposits can help - to avoid borrowing for emergencies, unexpected expenses or other items. For example, by putting the amount of the fee that would be paid on a typical $300 payday loan in a savings account for six months, you would have extra dollars available. This can give you a buffer against financial emergencies.
8. Find out if you have, or can get, overdraft protection on your checking account. If you are regularly using most or all of the funds in your account and if you make a mistake in your checking (or savings) account ledger or records, overdraft protection can help protect you from further credit problems. Find out the terms of overdraft protection.
9. If you need help working out a debt repayment plan with creditors or developing a budget. There are non-profit groups in every state that offer credit guidance to consumers. These services are available at little or no cost. Also,
10. Check with your employer, credit union or housing authority for no or low-cost credit counseling programs.
If you decide you must use a payday loan, borrow only as much as you can afford to pay with your next paycheck and still have enough to make it to the next payday.
By admin
What is finance and what do you need to know? Finance can mean different things. It may refer to your personal financial situation. It could refer to your investments or a business’s investments. It could refer to a credit or loan purchase.
Financing can be involved in your life in different ways.
For example, if you are going to invest in a large purchase
such as a house or even a car. Large furniture purchases
and
credit cards all fall into these categories. Interest rates
are the most integral part of financing. Why else would a
company want to loan you money or offer you credit? How
else
would they benefit? They benefit from the interest that you
have to pay in on financing your loan. There are different
types of financing options available.
The percentage rate is the amount of interest that you pay.
The percentage rate is the certain portion of your loan or
credit that you pay back in interest. For example, if your
loan was for $40,000 and your interest rate was 12.3% then
you would pay 12.3% of $40,000 in interest. The interest
would be added onto your $40,000 and you would pay it
back
via your monthly payments.
Fixed rate: A fixed rate means your interest rate will stay
the same no matter what. People usually prefer these. If you
can get a low fixed rate, it will stay with you even if
other average interest rates are going up. Balloon rate: A
balloon rate can fluctuate with the times and the stock
market but depending on the situation, this can be
beneficial to you as well. You will have to decide which you
think is best for you.
There are different types of financing options as we
mentioned earlier. Probably the most common example of
finance in the United States is credit cards. A credit card
allows you to make purchases with the card. The bank
issuing
the card will pay on your behalf and you then pay the bank
back, plus the interest. The bank makes money off the
interest and you get what you want right away.
The same thing applies to pay-as-you-go or rental furniture
companies. There are even rent-to-own housing services
now
where your monthly rent can go towards buying the house if
you want to stay. Financing should be a way to help you
achieve something that you’re going to be purchasing
anyway.
Financing can get you in your house quicker than saving up
the cash. Become knowledgable and financing can be a
tool
that will serve you well.
By admin
Payday loans offer a fast and easy solution to financial emergencies. But, costs can add up if you don’t pay the loan off or borrow excessive amounts. To use payday loans wisely, follow these tips.
Borrow What You Need
You may be instantly approved for $1000, but it will cost you more than a $500 loan. The fees may be the same for both loans, but the interest fees will be higher for the $1000 loan.
Save yourself cash by only borrowing what you need to cover your expenses. With the lower amount, you can pay off your payday loan quicker, saving even more money.
Compare Payday Lender Fees
Payday lenders charge different fees and interest rates, so compare lenders. Payday lenders are required by law to post their fees and rates. You can quickly compare these fees and interest rates through online payday lenders.
When comparing, look for both the flat financing fee and interest rates. Add these two amounts to get the true financing cost of the payday loan. This extra step will save cash, especially if you rollover your loan.
Pay Back Your Cash Advance ASAP
Pay back your cash advance loan on your next payday or soon after. The longer you take to repay the loan, the more interest fees will add up.
By default, most payday loan companies deduct the minimum finance payment from your checking account, adding several months to the length of your payday loan. Instead, when you apply for your payday loan, opt to repay your loan sooner with larger payments.
Never Skip A Payday Loan Payment
To avoid spiraling fees, do not skip a payday loan payment. Not only will you be charged late charges by the payday loan lender, you may also be charged fees by your bank for lack of funds.
Talk with the payday loan company if you are having trouble making a payment. Payday loan lenders offer several repayment options, and they will find one that works for your situation. Paying the costs of a longer loan is cheaper than paying late or NSF fees to your lender and bank.
By admin
As long as the premiums are paid, protection is guaranteed for life. Premium costs can be fixed or flexible to meet personal financial needs.
A permanent policy accumulates a cash value against which you can borrow. You can borrow against the policy’s cash value. However, it is important to pay the interest that is billed every year. If the interest isn’t paid, then it will be pulled from the cash value and be tacked on to the end of the loan. Hense, your loan will increase and your cash value will decrease. When you loan value exceeds the cash value in the policy, then the policy is put into an excess loan situation. When this happens, you must pay the total amount billed to keep the policy from terminating.
A provision or “rider” can be added to a permanent life insurance policy that gives you the option to purchase additional permanent insurance without taking a medical exam or having to furnish evidence of insurability.
Whole Life or ordinary life is the most common type of permanent insurance. The premiums generally remain constant over the life of the policy and must be paid periodically in the amount indicated in the policy.
Universal life or adjustable life allows you, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums or maximums. You also can reduce or increase the death benefit more easily than under a traditional whole life policy. (To increase your death benefit, the insurance company usually requires you to furnish satisfactory evidence of your continued good health.)
Variable Life provides death benefits and cash values that vary with the performance of a portfolio of investments. You can allocate your premiums among a variety of investments offering different degrees of risk and reward - stocks, bonds, combinations of both, or accounts that guarantee interest and principal. You will receive a prospectus in conjunction with the sale of this product.
The cash value of a variable life policy is not guaranteed and the policyholder bears the risk. However, by choosing among the available fund options, you can allocate assets to meet your objectives and risk tolerance. Good investment performance will lead to higher cash values and death benefits. If the specified investments perform poorly, cash values and benefits will drop.
By admin
When negotiating for business, one must expect to encounter some “difficult” negotiators and it is important to prepare for such a situation. A partner, client, or other business contact may become belligerent, inflexible, or even downright rude. With the following tips, you can enter into negotiations with confidence that things won’t turn ugly if your counterpart becomes difficult.
1. Work from goals, not positions!
The most important thing to remember is to work from common goals, not positions. When parties negotiate based on positions, any compromise feels like loss because someone loses ground on their specific position (i.e. lowering price). If you can shift the emphasis to what each party really wants rather than what their stance is, it allows room for flexibility to occur without creating a winner/loser atmosphere, hopefully allowing the difficult negotiator to back down without losing face.
2. Are you contributing to or exacerbating the problem?
Take a look at your own behavior for a moment. Have you interrupted? Have you belittled or behaved dismissively toward their input, even inadvertently? If the other party has been offended or embarrassed in some way they may be behaving reactively, putting additional strain into the situation that needn’t prevent a solution from being reached. If you think your behavior may be a contributing factor, apologize. If you interrupted rudely, don’t do it again.
3. Address the process directly.
If the difficult negotiator’s behavior is preventing any progress from being made, your most effective tactic may be to confront the aggressor by explaining that their approach is having a negative impact on the negotiation itself, and on you. Suggest that maintaining an amicable atmosphere and listening openly to each other will probably lead to a far better resolution for both of you. If they realize they are not going to achieve any of their objectives by alienating you, they may change their tune. Just make sure
you aren’t acting out of emotion. Make it a conscious decision to address the negotiating process and be professional and polite.
4. Why is the person acting this way?
If you can, try to understand possible causes for the behavior. Is this person inexperienced on the points you are discussing? Are they under intense pressure or time constraints? These considerations don’t excuse rude or unprofessional behavior but if you can guess at the real problem and address it you may find the difficult person is able to be more responsive to your input.
5. Last ditch: out the window!
If you have to, walk away! Find another way to achieve your goals. Stay calm, but let the difficult negotiator know that you can no longer continue in the hostile negotiation and that you will find another solution.
You can’t avoid difficult people, so when you find yourself in such a situation don’t be cowed. Recognize the problem and address it consciously!
By admin
Eliminating your debt is a daunting task. What can you do to get out of debt fast? Believe it or not, negotiation along with proper financial responsibility is your foothold out of the rat race. Learning how to eliminate your debt might be one of the most important life skills that you learn because it can bring you happiness and fulfillment. In order to successfully eliminate your debt, you must use a combination of self-control, proper negotiating skills, and some future planning.
Here Are Some Tips
1. Chop ‘em up or freeze ‘em. Start by taking all your credit cards out of your wallet/purse and cut them up into pieces. If you’re one of those people who make the claim that you might need those credit cards in case of emergency, then a unique strategy is to freeze your cards–literally. Put the credit card into a paper cup and fill the cup with water and then freeze it. You won’t have immediate access to the credit card and it will still work for you in case of emergencies. Whatever way you choose to get rid of your credit cards, make it a symbolic ritual of your commitment to get out of debt.
2. Start living within your means. You’ll be amazed at how much money can slip through your fingers on small daily purchases. Start living within your means by paying cash for the things that you need to purchase. Start looking for the cheaper items. Remember, brand names do not always equate to being a better product. Big businesses count on the fact that you are going to toss them your money without question, so don’t make it so easy for them. Use coupons wherever you go. Buy in bulk to reduce costs. Learn how to cook. The ways to save money are endless. Just remember that living within your means does not mean you have to live poor—it just means you have to live smarter.
3. Consolidate all your high-rate credit cards. First check out the maximum credit limit and APR on all your credit cards and choose the one with the lowest APR and consolidate your other credit card balances onto that one account. Make sure that there are no hidden fees associated with the balance transfer. Another way is to negotiate a loan that offers a lower APR than what you are currently paying for and pay off your high interest cards with that loan. Just be very careful about the small print because many credit card and loan companies will offer a low introductory APR, but once that is over, they jack it up through the ceiling.
4. Invest in your debt. Many people who are stuck in debt still pay quite a bit into their mutual funds or stock portfolio thinking that they will get a higher rate of return. In most cases, this will never happen. Annual APR’s for credit cards are a whopping 24% or more. I have yet to see a constantly performing stock or mutual fund that turns out even 15% on a regular basis. Treat your debt like a high-interest investment—one where you are guaranteed to earn a huge rate of return. Always invest in your debt before you put money into investments.
5. Use a trusted family member. One of the best ways to get out of debt is with the help of a financially stable family member because they will usually give you the cheapest deal on a loan. Get an IOU agreement in writing and pay them a predetermined amount every month. Some people choose not to go this route because of pride, but it could be the fastest and cheapest way out of debt. Just make sure you possess the integrity and honor to repay your debt to them otherwise you will have more problems than just financial ones.
6. Don’t get suckered into taking more debt. A dirty negotiation tactic that loan companies like to use is to offer you more of a loan than you need to pay off your debt, thus adding more debt onto your existing debt. This tactic works the same way as when a child brings a stray puppy home and asks, “Can we keep him?” The credit companies know that there is a great deal of emotional attachment to that extra credit and they are betting that you are going to take that “stray puppy” home with you. Resist the temptation to take that extra credit home with you because it will cause more problems than it is worth.
7. Kill the smaller vermin first. If you have several debt accounts in various denominations, then attack the smallest debt first with full force and kill it as quick and as painlessly as possible. Once that debt is gone, then use the newly freed savings from the last debt and apply it towards killing the next largest one, and so forth. This is a simpler and much more effective way of eliminating debt than paying small amounts off of each loan. It also has the psychological benefit of boosting your motivation with each progressive success.
8. Stay busy. It’s a known fact that if you have too much free time on your hands, you are more likely to spend money than if you were busy. Take up some recreational activity to keep you occupied so that you don’t have that free time to go spend your money.
9. Set up an auto-pay system. There is a ridiculous amount of money to be made on late charges and finance charges. Credit card accounts spiral out of control because people see that they do not have any monthly minimums dues and let it roll over to the next month. The credit card companies love this because you have just given them extra money in the form of finance charges to your account. Always pay more than your minimum to get out of debt. Avoid handing free money over to companies who charge you for late fees by setting up an EFT or automatic bill pay system so that you won’t have to deal with writing the checks, finding stamps, and mailing the bills every month. Having an automated system do this for you will make sure those bills get paid on time.
By admin
With the way the economy is today, our children have a bleak future ahead of them. There may not be social security for them when they get ready to retire. I have three grown children. I use the word children still, because the young adults of today want everything now. The best solution is to put at least forty dollars every two weeks up in a high interest savings account. It is not much but it is a start. We must teach the young adults that money does not grow on trees. They are spending money as fast as they obtain it. Helping your child now is not a crime, but there must be limits.
As parents we have to be certified C.P.A.’s of our money and of our children’s money.They have to learn the word “sacrifice”. Which means they cannot run out and buy that top in the store and not pay their gas bill for the month. It is not like we as parents grew up. We learned the meaning of a dollar quickly. Many of our young adults are moving back home because of the economy. I for one, take my youngest daughter’s money and put half of it up. To teach her that there are more rainy days now then sunny. On top of saving money my children will have my inheritance. But there will be many catch 22’s behind the inheritance. If I do not put limits on it, I know that in less then five years they will be broke. And I will be gone, not able to help them.
For the children who are under eighteen, start now by putting money in a savings account. Make sure they cannot touch it until they turn eighteen. This will help them with a good start on their own. Savings bonds are another good resource. They do not have to be huge, fifty dollars is fine to start. There are many times you will have to say you don’t have money right now, unless you know that they need it for a bill that they cannot pay. But you will have to make a contract for your child to pay it back. This may sound harsh, but young adults forget what you do for them. They expect you to do it for them even though they are on their own.
Using common sense is the best medicine, you want to keep your young adult and child ahead in the game of life. It is harder to rise a child now then it was thirty years ago. Many parents now wish they had saved more. But in the times now, we the parents are struggling ourselves. Offer your young adult aid but make should they know that it has to be paid back. Lessons learned now, will save them in the future.
