Payday Loans - The Legal Loan Sharking Industry

Laws have been created to protect people against "Loan Shark" practices in which short-term loans are given out at excessive interest rates. There is an industry that has come of age the last couple of years that has circumvented these laws. Enter the Payday loan industry.

Payday loans is a some-what new multi-billion dollar industry in which people borrow money to tithe them over until their next payday. These loans also go by the names cash advance loans and paycheck loans. They prey on the lower class that find themselves short of money before a payday.

The one thing to consider when looking into a payday loan is the APR or Annual Percentage Rate that these loans carry. At first glance, you may think paying $240.00 for a loan of $200.00 for two weeks is ok. The A.P.R of this loan comes to a whopping 520%. That is the amount this loan would cost if played over a years time. Compare this with a high interest credit card of 29%. When you see it compared to these numbers, you can see they are not the bargain you first thought it was.

A representative from a payday loan company has agreed to be interviewed for this article on the condition his identity and that of his company be anonymous.

I asked him, how can they can justify such enormous interest charges. His reply was "Because we can. There are loopholes out there that allow us to do this. This is a high risk loan for most cases so we need to charge enough to cover bad loans and to make a profit."

When asked about if payday loans are ever a good idea, his response was "Sure. For example if you will be late on a credit card payment of $70.00 and will be charged a late fee of $30.00 then the APR of the payday loan justifies getting one. You will save points if you get a payday loan and not pay the higher interest rate of the late fee."

When you should get a payday loan:

There are times when payday loans are justified as discussed above. The primary example when your late fees are more expensive than the late fees paid to your creditors.

Another non-tangible justification is when you can avoid getting reported for a late payment. This can be far more expensive than any payday loan fee in that it could affect the cost you pay for future loans. This is especially true if it’s your mortgage or car payments.

Yet another reason to get a payday loan is that you determine that the cost is worth it to you personally. If you are headed for the long awaited vacation and could use a few extra bucks to enjoy and can afford the fees then you should look into this.

A final thought on when you should get a payday loan is if you need that cash and it’s free. That's right free. There are a many sites out there that charge ZERO interest to all first-time customers. One such site can be found at Low Cost Payday Loans.
What to look for when getting a payday loan:

The first thing to look for is the APR. Federal law has made it so that every lender must disclose the cost of any money borrow through a Truth in Lending Disclosure. This must break down the cost by APR (Annual Percentage Rate). This is the first thing to compare loans by.

Another thing to look for is the length of the term. If two companies charge the same rate for every hundred dollars borrowed but company A has a term of up to four weeks and company B has a term of two weeks, then go for Company A and take advantage of the extra four weeks. The APR of Company A is half of Company B. The reason this differs from the first item is that sometimes they base APR on a fixed amount of time (two-three weeks usually). When you read the fine print that the fee charge is fixed and may allow you to pay it back in a longer term such as four weeks.

The bottom line:

Do your homework when getting a payday loan and look for free to low cost payday loans if possible. The money you save can be substantial. Look for lower cost payday loans and No Fax Payday Loans. These faxless payday loans allow you to apply without needing to submit documentation via fax.R Vigil Finance Consultant At Faxless Payday Loans.

Source: http://www.ezinearticles.com/?Payday-Loans---The-Legal-Loan-Sharking-Industry&id=4834

Cash Loans - Easy Solution For Petty Expenses

There is no denying of the fact that with the passage of time, expenses have increased while, monthly incomes have been fixed. Sometimes, absence of cash circumstances becomes a huge dilemma for an individual especially when unplanned expenses crop up. So at the time of any urgent requirement you can easily borrow cash through easy cash loans.

Cash loans are especially designed for settling small and short term expenses. The borrowers with bad credit can procure this loan because credit score is not evaluated. The borrowers with bad credit history such as CCJs (country court judgments), IVAs (individual voluntary agreements), arrears, late payments, defaults, bankrupts can acquire cash or payday loans.

The process of applying this loan through online mode is simple and hassle-free. The borrowers just need to fill-in a form which is available on internet 24×7 for all. While applying for this loan, the borrower must be ready with credential which includes proof of residential address and source of income. Cash loans are offered to the borrowers who are at least 18 years of age and citizen of Australia. As soon as borrowers submit their application online, the lending company will verify. After availing the approval, the loan amount is electronically credited into the bank account of the borrower.

Apart from no credit check feature, the cash loans do not require any sort of valuable collateral against the loan amount. Therefore, borrowers are not required to pledge any kind of collateral against the loan amount as they are unsecured in nature. With this type of loan, the borrowers can avail the loan amount ranging from 100AUD and 1500AUD. The tenure of repayment is short i.e. 14 to 31 days with slightly high charged rate of interest.

With the help of loan amount, the borrowers can meet urgent expenses which can not be avoided such as medical bills, travel expenses, education fee and accident expenses.

Angel George is financial advisor of Payday Cash Advance Loans In Australia. For any query regarding payday loans Australia, payday loans visit http://www.paydaycashadvanceloansau.com

Source: http://ezinearticles.com/?Cash-Loans---Easy-Solution-For-Petty-Expenses&id=2076659

Do Payday Loans Deserve a Bad Rap?

We have all heard the stories about cash advance lenders charging their customers excessive interest fees. It is true that most payday loans have the highest interest rates compared to any other type of loan. As unfair as this may sound, payday loans do serve a purpose and there are many people who use them to their advantage.

The majority of people who need the assistance of a payday loan have poor credit and cannot obtain a loan by going through the traditional routes. Banks, credit unions and other lending institutions require for their customers to have a credit score of a certain level that a lot of people just simply do not have. Cash advance lenders have reasons to justify the high interest rates that they charge. Where else can you go and receive cash on the spot? Lending cash to people with questionable credit is a big risk to the lender. They have to make up for this risk and for having a large amount of cash on sight by charging higher interest rates on their loans.

Critics of the payday loan say that the short terms of the loan and the high interest fees can cause people to become trapped in a never ending cycle of payday loans. In some circumstances this case may be true. It can turn into a bad situation when people take out a cash advance loan that they know they cannot payback in addition to leaving enough money left over for other bills and living expenses with their next paycheck. In this situation, the person who is in need of a cash advance is better off to ask a friend or a relative for a loan who will not charge them interest and will be more lenient on the payback terms.

In response to the allegations that the problem with payday loans lies with the lender instead of the borrower, cash advance loans are not meant to be a permanent solution to cash flow problems. They are intended to be used only for unexpected expenses and in the case of an emergency.

If someone finds themselves on the payday loan merry-go-round, they more than likely need to step back and asses their budget. If they do not have a budget, that itself may be a large part of the problem. If someone cannot afford to pay all of their bills and necessities after cutting out all unnecessary expenses and going on a budget, they may want to seek higher paying employment or look into debt management solutions.

Even if you have good credit, there are benefits to using a payday loan. The limit on a cash advance loan tends to be much lower than the limit for a traditional loan. Many circumstances call for the borrower to only need $500 - $1,000. They can easily obtain the money through a cash advance without the hassle of an application, a credit check and waiting for approval. Many online websites such as Easy Approval Personal Loans offer both unsecured personal loans and payday loans so you can easily find the loan that best suits your needs.

In conclusion, only you can decide if a payday loan is the best option best for your situation. There are pros and cons to every situation. By being responsible with your finances and educating yourself on all of the possible loan options available to you, you will have the best chance of coming out on top.

Note: This article may be freely reproduced as long as the authors bio paragraph at the bottom of this article is included, the article is published “as is” (unedited) and all URL’s are made active hyperlinks with no syntax changes.

This article was written by Beth Pardue who has over 10 years of experience in the financial industry assisting clients with assorted financial needs. To learn more about your personal loan options or to apply for a personal loan online please visit: http://www.easy-approval-personal-loans.com

Source: http://ezinearticles.com/?Do-Payday-Loans-Deserve-a-Bad-Rap?&id=63839

Payday Loans - What You Can Do About Them

"Loan-Sharking" equates to usury, which is charging interest above an established legal rate. "Pay Advance", "Check Advance", "Deferred Deposit", "Payday Loan", or any other label like it is lower than loan-sharking. It is a legal, multi-billion dollar industry that you do not want to get lured into.

As a young military in Korea years ago, I remember none of us had much money. Gambling and "other pastimes" took the little we had before month's end-- but there were always the "friendly", black-market loan sharks offering 50% interest loans very close by. Guess who was also 5 feet away from the pay station on pay day... the Korean version of Don Corleone, of course.

It has not changed much over the years or location or title. The Payday or cash advance lender still preys on the financially struggling individual. The pay back still revolves around payday. The rates are still exorbitant. What has changed is that it is now legal, the "APR" exceeds 350%, and the client is not restricted to the military. The prey are now thousands of struggling, hard working folks who are having a tough time making it to the end of the month. Many toil on very low paying jobs, have serious medical debt, gambling addictions or worse. But they all are collecting pay stubs and maintain a checking account.

So the hard working, debt-burdened consumer sees a warm, friendly, office with an innocent name such as Pay Advance. "Is this an opportunity or what?" Sure it is... for the lender. Here's a scenario from real life copied from e-mail sent to me.

"I owe nine check advance companies (companies that will let you write a check for cash with a fee included) a total of $3000. I also have approximately 15 checks I have bounced as a result of trying to pay off these check advance companies. The total amount due of all the checks with fees is approximately $1500. I have people calling me all the time and they are also calling my boss at work. They tell me I can not make partial payments on my checks and almost all of them want their money within ten days or they will turn it over to the county courts office."

Not An Isolated Case

Check advance operations are springing up across the nation and may be one of the fastest growing industries we have. The former owners of Blockbuster Videos sold their successful corporation to reinvest in their first pay advance operation. That was 3 years ago. There are now 1500 offices and that is just one conglomerate. Business growth like this does not occur without phenomenal profit potential. I would consider a 200%, 300%, or 400% APR a sizable potential profit, wouldn't you?

But another e-mail referred to an article in a Memphis newspaper. The author of the article queried one of the owners/managers of a check advance business and pointed out that high fees [$20 for 7 days on $300] worked out to be a 360% APR. The payday loan owner said, "It did not matter what the yearly rate was if you only needed the loan for a short period of time."

The owner is right- or is he? We have already addressed the fact that the tendency is to use such a system again and again. If I pay a loan back and then take out another, and then another, and then another, I bet I can make a strong case for 360% APR.

But it is not an APR.

It is a fee. The Glossary of Political Economy Terms from Auburn University defines Interest rate as "The price(s) of obtaining the temporary use of money that one borrows from someone else who actually owns it, normally expressed as a percentage of the amount borrowed per year." A fee, on the other hand, is "a charge for services rendered".

Therefore, it is not an "excessive APR" because it's a fee and any comparison to usury is comparing apples and oranges. So how could it possibly be loan-sharking? DUH. What is wrong with me. But here is another little tidbit. Collectors cannot take partial payment for advance check pay back because advance pay is not considered a loan. Advance check operations fall under non-sufficient fund (NSF) laws, which means they can demand the local district attorney's office to act as their collection agency.

No wonder these operations are flourishing. They have it all going for them.

Authoritative Words From Others.

The Consumer Federation of America calls it legal loan sharking:

"The Consumer Federation of America describes them [Payday Loans] best: 'Payday loans are single-payment, short-term loans based on personal checks held for future deposit or on electronic access to personal checking accounts. In a typical transaction, a consumer writes a check for $117.65 to borrow $100 cash, with the total amount due by next payday or in up to 14 days. The $17.65 finance charge computes to a 459% annual percentage rate.'"

And the very respected American Association of Retired Persons (AARP) has this to say:

"typically involve small amounts of money lent for a short period at very high interest rates. The customer -- usually a low-income individual who is excluded from mainstream lending sources.... Many borrowers end up renewing the loan over and over again because they cannot pay off the loan and still have insufficient funds to cover the check when the loan period ends. In the example above [charge $15 for a $100 loan for two weeks], they would pay another $15 each time they extended the loan, receiving no additional money in return. While the effective annual interest rate depends on the fee and how many times the borrower pays an additional fee to renew the loan, estimated annual percentage rates around the country range from 700% to 2,000%." Alternatives to Payday Loans

FTC and Consumer Federation of America (among others) suggest some of these alternatives to Payday Loans:

1. Make a realistic budget, and figure your monthly and daily expenditures.

a. Avoid unnecessary purchases - even small daily items.

b. Build some savings - even small deposits can help - to avoid borrowing for emergencies, unexpected expenses or other items.

c. Putting the amount of the fee that would be paid on a typical $300 payday loan in a savings account for six months can give you a buffer against financial emergencies.

2. 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.

3. If you need help working out a debt repayment plan with creditors or developing a budget, contact your local consumer credit counseling service. There are non-profit groups in every state that offer credit guidance to consumers. These services are available at little or no cost. Also, check with your employer, credit union or housing authority for no- or low-cost credit counseling programs.

4. 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.

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. Shop for the lowest cost credit available from cash advances on credit cards, small loans from a credit union or a small loan company.

7. Consider asking your employer for an advance or turning to friends or family when an emergency arises. Put in writing a good faith agreement to pay them back by a certain date.

8. Some community-based organizations may make small business loans to individuals.

9. Ask for more time to pay utility bills.

Breaking Out of the Downward Spiral

Please understand, I am not advocating not paying your just debt. But the following are ideas presented to me by others who have been caught up in the payday loan spider's web. They are offered to your for your prudent decisions.

1. "Came to a point that I could not pay them. I called them and told them. They asked what I could send them and placed an amount. One even told me if I could not make a payment, just to call."

2. "Criminal bad-check laws do not usually include post-dated checks. Furthermore these can be discharged in bankruptcy. At the time you write these checks, the lender knows they are bad because they are post dated. They therefore are not generally considered "bad checks" but "bad debts", and ordinary debt laws apply. So, at least from a legal point of view, skipping out on the payday lender is no worse than skipping out on any other lender."

3. "I would close the checking account. Open a new one and then start paying them with money orders. This might be a temporary option so that you can get caught up on your mortgage. I would hate for you to get even further behind just to pay the Check for Cash people."

4. "Stop payment on the outstanding checks they already have prior to closing the account to de-fuse the possibility of getting stuck in the ChexSystem mess."

5. "I was once caught up in the payday advance situation. What I ended up putting a stop payment on the checks (2) and then making payment arrangements with the company. Even though they weren't too happy, at least I was making a dent in the debt and not incurring any more charges. Although one of the places wrote it off to a collection company, they still accepted getting $25 a month each. Then I could use my paychecks to pay my bills, instead of the fees they charge you. While it may not be the perfect solution, at least you will break the payday cycle. Hope this helps. Also when I made the payments I used money orders."

6. "Check the laws for your state regarding the Check for Cash places. I know in Florida you can contact the lender and tell them you will not be able to pay the check. They give you 90 days to pay the check but you must enter into a debt counseling class. Maybe your state has a law like this."

7. "I wrote to the payday companies, certified mail (even if they are in your hometown, I'd do this because it legally proves you contacted them). I told them that due to unforeseen circumstances, I could no longer pay them. I offered a payment plan that was more than fair, even including their interest fees. A few of them refused, but they ended up having to accept what I could pay, and those that refused ended up not even getting the interest."

8. "Stop paying them. I believe that all states now have laws prohibiting them from prosecuting you. If you've written the letter telling them they can't pay, and then stop payment on the check, you will have protected yourself somewhat if they chose to go after a civil judgment (they won't). Then, make payments YOU can afford...DO NOT let them set the terms. Once you get your mortgage, electric and phone caught up, increase the payments to the payday loan people significantly until you can pay them off, but don't increase them to the point you can't pay them."

9. "The best thing to do is to contact the payday lender as soon as you find out that you cannot pay them (due to your employer changing paydays, or other reasons). IT really helps if you can provide documentation or a contact (such as your boss, or payroll company), to back up your story. Most payday lenders are flexible, and would rather get paid late, then not at all. Again, think of yourself as a lender, and your brother-in-law that owed you money came to you and explained that his baby unexpectedly got sick. You are more inclined to believe him if he shows you bill from the doctor with a date on it that is after you loaned him the money, right?"

10. "Section 3-104(2)(b) of the UCC, defines a check as 'a draft drawn on a bank and payable on demand.' A postdated check, since it is not payable on demand, does not satisfy this demand. Consequently, it has generally been held by most states that the giving of a post-dated check does not constitute a present fraud nor is it within the scope of the bad check laws."

What can we as a society do?

Consumer Federation of America offers major insight to answer this question in the following statement.

"Failing an outright ban on cash advance loans, this type of loan should be explicitly regulated through state small loan laws requiring licensing or registration with state banking officials. Disclosures must comply with the federal Truth in Lending Act."

1. There should be an absolute cap on effective annual interest rates. States should limit the size of these loans, set a minimum term that realistically permits the loan to be repaid, require written contracts, forbid multiple loans and roll-over of cash advances into new loans, and prohibit lenders from threatening borrowers with bad check laws if they fall behind on payments.

2. Lenders should not be permitted to bring criminal prosecution for failure to pay cash advance loans on checks and these loans should be treated as unsecured debt for purposes of bankruptcy. States should collect industry-wide data to monitor the business.

3. The federal government should close any loopholes that permit national banks to make payday loans in any state that prohibits state check cashiers or state chartered financial institutions from making this type of loan. The Comptroller should require banks to comply with the consumer protections in the states where they do business.

Readers will probably be interested to know Mike, the author of this article, also offers a free debt elimination mini-course via e-mail. You can enroll at Debt Free In 7.5 Years.

Mike has been an Internet Guide/Writer in the field of Credit/Debt Management for over 10 years. His site was awarded Best Of Net by Forbes Publication from 2000 to 2005 with site visitation doubling to over 500,000 average views per month in the last year.

He has also offered debt elimination seminars to businesses and community colleges for the last 9 years. He has been interviewed on the radio a number of times and referenced in numerous publications.http://learncreditmanagement.com

Source: http://ezinearticles.com/?Payday-Loans---What-You-Can-Do-About-Them&id=473971

Urgent Loans Company Same Day!

You never know when you may be in need of money urgently. Emergency needs can arise at any point of time. It may be very difficult securing loans in a short period of time. Most of the lenders are hesitant to lend loans at a short notice. Moreover, the whole process of loan approval also takes a long time.

Urgent loans company same day can help those who are looking for loans urgently. It would be a great option for those on the lookout for loans urgently. These companies can help borrowers avail loans quickly. The best feature of these loans is that a borrower can have the loan amount deposited into the account the very same day.

These loans come in handy to those with immediate requirements.

A borrower can get these loans approved without going in for a credit check. One can get instant cash from these loans. They are approved in a short period of time. Most of the lenders approve these loans without taking into consideration the credit score and financial situation of the borrower.

Alternately, one can also opt for quick online payday loan. These loans yield similar results. A borrower can use the loan amount to pay urgent medical bills, electricity bills, pay car loans or fulfill any of the urgent requirements.

The easiest way to borrow money quickly would be to opt for quick online payday loan. These loans allow a borrower get instant cash and enable to meet short-term financial emergencies. It doesn't take much long to avail these loans. The borrower can have the loan amount deposited directly into the checking account within twenty hours. These loans should not be used for long term purposes.

A borrower can also avail these loans by looking online. There are many lenders offering these loans. The whole process of securing these loans is very simple. The amount of money that a borrower can avail depends upon several factors, such as the employment status of the borrower, the monthly salary, and so on.

Instant Homeowner Loan

Basically, instant homeowner loans are secured loans. They work on the basis of the equity in your home or real estate used as collateral to secure and guarantee the loan. Equity means the value of an owner's real property after deducting mortgages and liens. These loans are designed specifically for home owners who are in need of urgent cash. The home acts as a security against the loan. An instant homeowner can be used for financing education, home repairs, buying a car, meet medical expenses, etc. These loans come in handy when face with an urgent requirement. Borrowers with a bad credit history, arrears or defaults can also make use of these loans.

Sadhana Dhanyal, Expert Author

For more information:

Instant homeowner loan

Quick online payday loan

Source: http://www.blogger.com/post-create.g?blogID=329096568775059665

Cash Loans - Borrow Instantly To Meet Urgency

Nobody knows what’s going to happen tomorrow. Sometimes situations arise where in money is needed urgently. Cash loans are designed to help people stuck in such situations. With cash loans you can avail good amount of money within very short period of time.

Cash loans are meant to provide financial assistance to people in urgent need of money. Cash loans are approved in very short time and the loans amount is actually transferred to the borrower’s account within 24hrs of approval. Cash loans are generally unsecured in nature. It means you don’t need to place any security against the loan amount in order to avail cash loans. Cash loans are short term loans and the loan amount that can be availed is small. With short term cash loans you can avail an amount ranging from £1,000 and £25,000. The loan amount depends upon various factors like credit history of borrower, bank details, repayment ability, monthly income etc. The repayment duration of cash loans ranges from 1 – 10 years.

You must have a full time job and must be at least 18 years of age in order to avail cash loans. You’ll also have to submit your income proof and bank details to avail cash loans. Cash loans carry high interest rate compared to other loans because cash loans are short term in nature and also you don’t have to place any security to avail it. Cash loans can also be availed by people having bad credit history due to arrears, defaults, CCJ, IVA, bankruptcy etc but the interest rate is slightly higher for them.

Cash loans can be used to pay for urgent day to day requirements like paying medical bills, repairing a car, going for a vacation etc. cash loans gets approved in very short time and the loan amount is transferred to your account within few hours. Cash loans are available through physical market and also though online lenders. It’s up to you to decide which option you want to go for. Online method is better compared to traditional one because this way you can easily avail loan without even meeting your lender.

Cash loans are the fastest means of availing good amount of money and hence are perfect for urgent needs.

Mathew Kenny is offering loan and financial advice for quite a long time. He is working as the senior financial consultant with Easy Cash Loans. To find cash loans UK, Instant cash loans, Easy cash loans visit http://www.easycashloans.co.uk

Payday Loans - Characteristically Short-Term Loans

Don’t be confused by the many different types of payday loans that are available over the Internet or through your local financial institutions for example online payday loan service, instant payday loan or advance cash payday loan, essentially these are all the same as a conventional payday loan. If you are in need of emergency money, researching alternatives available on the market would be the first step to take before applying for financial aid. Guidelines are available online to read through, this will assist you in making an informed choice.

Payday loans should be meticulously researched to make sure you are prepared with the right information before you embark on a financial contract with a payday loan lender. While doing your research you will notice there are many different types of payday loans available, they also go under various names i.e. instant payday loans, fast payday loans, cash advance payday loans and even bad credit payday loans. These loans are all characteristically short-term loans for a period of 14 days or less. All lenders have many common factors and this is no different when it comes to recovering the loan owing to them. Lenders ask for a post-dated check to be written for the amount including the charges and interest rate fee. The lenders cash the checks on a specific date noted in your contract normally your next paycheck.

A few facts:

A Payday cash loan is a short-term loan for employed borrowers; the loans can be obtained very quickly when you need money urgently before payday. They are convenient and simple to apply for but usually carry high interest rates. The interest rates can be as high as 700%, with added fees for “roll-overs”.

Payday loan lenders usually need verification that you are employed. You may also need to provide verification of your bank checking account, your last bank statement, social security number, driver's license and proof of residency. This can also vary from lender to lender depending on their specific lending criteria.

Funding can be borrowed no matter what your credit record is. Some payday lenders will not even check your credit record. To apply for a payday loan the lender will usually need you to give them a personal check for the amount borrowed including the charges. The funds for repayment will either be withdrawn from your checking account on the due date or the post-dated check will be deposited by the lender. These loans are short-term, 14 days.

Once your application for the instant payday loan has been approved the money is transferred directly into your bank account.

A. Procos specializes in article writing for payday loans, online payday loans, bad credit payday loans and no fax payday loans etc. For more information regarding payday loans visit http://www.paydayloanswebsite.com

Source: http://ezinearticles.com/?Payday-Loans---Characteristically-Short-Term-Loans&id=426610