Category Archives: Cash Advance Loan

The Effect of Predatory Lending Practices on Payday Cash Advance Consumers

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If you think the economic recession is an advantage to payday cash advance lenders, think again. The recession had a bad effect on lenders because of the increase in the unemployment rate which has affected the ability of consumers to earn money. Their customers don’t have any source of income and are unable to pay their loans and other bills. Eventually, some consumers will declare bankruptcy. When this happens, there is nothing a lender can do except to get what they can extract from the borrower and in many cases there is almost nothing.

Because of this, many lenders have increased their screening process for approving applications and limited the number of loan approvals. In fact, even a good credit rating or sustainable income won’t assure a payday cash advance applicant of getting approved for a loan.

So many consumers turn to lenders who easily approve loans. Many of these consumers have fallen for lenders who are into predatory lending practices. These loans come with easy qualifications but the interest rate is very expensive and may be debilitating to a consumer. In fact, some consumers end up losing their property or declaring bankruptcy. The result is that consumers who work with lenders that are into predatory lending practices find themselves deep in debt for many years because of the steep interest rates.

Many have fallen into predatory lending practices because of convenient and quick services with less documentation required. Some don’t even ask you to fax your documents. The personal information you provide online is sufficient for the processing and approval of your loan. As long as you can provide them with proof of your source of income, your loan application will be easily processed.

However, the consequences of working with lenders who are into predatory lending practices are detrimental. The interest rate may be more than the 10% range, excluding late penalty charges. If you are unable to pay on time, the interest rate easily piles up leaving you to pay more than you have actually borrowed.

Also, you can’t easily walk away from these lenders. They will hunt you down until you pay them. They hire collection agencies who repeatedly ask you for your payment by make annoying calls at home or at work. They will also send you letters by mail to collect payments. They may falsely threaten you with check fraud and threaten to put you in jail in order to make you pay. There are some lenders who threaten you by saying they will call up your employer which creates a bad impression on your employment status and may ruin your career.

Prevention is the key to avoid getting into trouble when working with lenders who are into predatory lending practices. Consumers must avoid them even if they are the last resort for a financial resource. There are still other options that will not put consumers into serious financial trouble. For example, there are non-government and government organizations that have been given the responsibility to assist those in deep need of cash assistance. Most of these organizations offer loan modification and refinancing with low interest rates and affordable costs.

Will Non-Payment of Cash Advance Loans Put You in Jail?

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In a recent news article there was a story about a breast cancer survivor who was put in jail because she was unable to pay for her medical bills. According to reports, she got a $280 medical bill and she was unable to pay for it. So the bill was turned over to a collection agency and when she refused to pay, police took her to jail in handcuffs.

In 1830s, the US government abolished debtors prisons. However, today there are more than one-third of the states in US that allow people who have unpaid loans and bills to be put in jail. In some states, such as in Illinois, debt collectors have used public courts, sheriff’s deputies, and country jails to pressure people with unpaid loans and bills to pay their debt or they will be put into jail.

Under the federal law, no one can be put into jail for unpaid loans, such as cash advance loans. However, when debtors force the case into court, the defaulting person is at risk to be put into jail when he fails to respond to the court summons and pay legal fines. He will be charged with “contempt of court”.

According to Illinois Attorney General Lisa Madigan, “Creditors have been manipulating the court system to extract money from the unemployed, veterans, even seniors who rely solely on their benefits to get by each month. There are a lot of people who have been put into jail because they’re too poor to pay their debts and we should not allow these illegal abuses to continue.” Currently lawmakers are planning to pass a bill that would make it illegal to put people in jail for debts and unpaid loans.

In the 2010 report of the American Civil Liberties Union, they surveyed 5 states (Georgia, Louisiana, Michigan, Ohio, and Washington) and found an increasing number of people being put into jail because of unpaid loans and debts. According to the report, debtors prisons are flourishing even after the Supreme Court has prohibited the practice.

The good news is that not all lenders want to put debtors of cash advance loans into jail. They found that when a debtor is put into jail, they won’t be able to pay the debt. The most suitable option that lenders turn to is to work on repayment options with the borrower.

The sad truth remains. The non-payment of loans and other debts are effects of the recession that struck our country. According to Mardigan, “More people are unemployed and more people are struggling financially.”

The best help to prevent imprisonment of persons with unpaid loans, comes from their own initiatives. Unless people learn how to pay their cash advance loans and other debts responsibly, they will worry about being put into jail.

Payday Cash Advances| Cheaper than Bank Overdraft Fees

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It may sound unusual to say that the cost of paying for a payday cash advance is cheaper than paying for an overdraft fee in banks. The Federal Deposit Insurance Corporation (FDIC) published the results of their two-year study regarding the use of overdraft programs operated by their supervised banks. Their study revealed that a typical bank has overdraft fees that are more expensive than paying interest fees and other additional fees for a payday cash advance.

The FDIC is managed by a five-person Board of Directors, who are directly appointed by the US President and confirmed by the Senate. This study by the FDIC on Bank Overdraft Programs was initiated in 2006. This is in response to the rapid growth of automated overdraft programs where the bank honors a customers overdraft obligations by using standardized procedures through non-sufficient fund (NSF) transactions. All data and information gathered was based on a survey from 1,171 FDIC supervised banks and separate data requested from customers from 39 other banking institutions.

In the study conducted by the FDIC, they have found that a typical NSF check can result in overdraft fees and interest as high as 3,500% APR. These are the results of the study:

  • $20 overdraft fee = APR of 3,520%
  • $60 ATM overdraft = APR of 1,173%
  • $66 check overdraft = APR of 1,067%

In addition to these numbers, the study revealed that most of the customers who incurred these charges belong to the low-income with a median annual income of less than $30,000. Furthermore, the study also found that, unlike payday cash advance companies, at least 75.1% of banks automatically enrolled customers in overdraft programs that carry APRs and other fees more expensive than a typical payday cash advance.

Other essential findings that the FDIC revealed in their study include the following:

  • 90% of the banks surveyed allow NSF transactions without informing the consumers and less than 8% of  the banks inform consumers that funds are insufficient before extra charges are imposed.
  • There are about 12.5% of banks who have received consumer complaints about automated overdraft programs.
  • 9% of consumer accounts have (10) NSF transactions during a 12-month period and 4.9% had (20) or more NSF transactions. The accounts who incurred 20 or more NSF transactions were charged $1,610 per year.

This study by the FDIC shows that payday cash advances are a good and reasonable financial resource option. It shows that they have significantly less expensive rates compared to traditional bank overdraft fees. This retaliates the claims of some critics that these types of financial resource are expensive and predatory. Even so for several years, consumer advocacy groups like the Center for Responsible Lending (CRL), have relentlessly campaigned to ban payday lending in the country which leaves consumers with no other option than to pay expensive bank overdraft fees.

How Cash Advance Lenders Help Consumers with Financial Freedom

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The financial difficulties experienced by many people today due to the economic crisis is the ultimate reason for the services of cash advance lenders. Because most of these payday cash advances are short-term and due within two weeks, many of these consumers are unable to comply with their obligation. They make payment defaults and ruin their credit scores.

Having low credit scores is detrimental. Consumers who are looking for more favorable loan terms are unqualified to apply for these loans. They may also be deprived of some benefits that require higher credit scores. The Community Financial Services Association of America or CFSA has created a program to help payday cash advance borrowers build credit through a new credit reporting agency that tracks their loan payments at no extra cost.

With over 164 affiliated cash advance lenders and financing companies, CFSA helps consumers find financial freedom by inproving their credit scores. How can they do this? The CFSA has partnered with PRBC, a consumer credit reporting agency, also called the credit bureau which is similar to the other four U.S. credit bureaus (Equifax, Experian, TransUnion and Innovis). In contrast to these popular and established credit bureaus, PRBC allows their consumers to self-enroll and report their payday cash advance payments and other debt payments. Consumers can also report payments for bills such as rent, utilities, cable, telephone, and insurance that are usually not reported to the other bureaus. Timely payments will help increase your credit score.

Billy Webster, CFSA board member, has been very proud of this program. He said, “More than 50 million Americans have low or non-existent credit scores, denying them the opportunity for equal participation in the mainstream economy. I am delighted that through this initiative we can help our consumers build their credit history.”

Today, traditional credit reporting agencies do not track or consider the payments for bills such as rent, private mortgages, utilities, telephone, cable TV, and child care for computing credit scores. So, people who make timely payments on bills, but not on loans or other financial products, are deprived of affordable home loans, auto loans and insurance. Sometimes, your credit score may affect getting employment or the amount of the deposit required for new utilities.

So how does PRBC works? PRBC services track payments of payday cash advances and other recurring bills by producing a Bill Payment Score or BPS which can be used to supplement a traditional credit score. The BPS is designed in such a way that consumers can easily understand the terms and the contents. Please take note that PRBC is free and does not charge a consumer for enrollment into the service or to view their own data.

The creation of the PRBC is answer of payday lenders to the summons of the federal government. For several years, the U.S. Congress has been proposing legislation on how to help consumers get out of debt and being the prey of payday lenders. Before the actual formation of the PRBC, State Representative Susana Mendoza, proposed in a hearing of the House Subcommittee on Financial Institutions and Consumer Credit, to require payday lenders to include credit reporting and  find an alternative data source to help consumers build their credit histories.

With the creation of PRBC, she said in an interview, “I am thrilled that CFSA recognizes the need, not just to help payday cash advance consumers get by financially, but to help them get ahead. That was the goal of my legislation, and I’m delighted to see CFSA put the idea into action.”

The creation of the PRBC services, through the initiative of CFSA, helps consumers of payday cash advances to achieve financial freedom. In fact, it has the strong support of consumer advocates as iterated by William McNary, the Co-Director of the Citizen Action in Illinois, “Through this initiative consumers who lack the opportunity will now be able to start to build a credit history. We appreciate the industry’s commitment to continue to improve their service.”

With Payday Cash Advance Loans You Will Not Be Brought Down By a Financial Crisis

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Today, millions of individuals from all over the world are affected by the global financial crisis. Even America is not spared from the crisis which has left millions struggling with their personal finances.

According to a recent Federal Reserve report, more than half of all American families are struggling with more than $75,000 of unpaid obligations mostly from mortgages, credit cards and loans, totaling $11.5 trillion nationwide in consumer debt.  According to a recent survey conducted by PNC Bank, many young Americans between 18 to 35 years old are already hooked on card debt with an average balance of $40,000 per individual.

So how do you cope with debts and expenses?  For those employed, getting a payday cash advance loan is a convenient option.  By taking advantage of payday cash advance loans, a borrower is able to acquire needed cash as soon as possible.

Borrower just need to apply for a loan online, fill-out an online application form from the loan provider of his choice and in less than an hour, cash is transferred to his bank account.  Purchases or paying bills can now be done quickly.

No qualifying documents are required to be submitted to qualify for a loan. Even individuals with low credit scores are welcome to apply for a cash advance loan. Meaning, even if the borrower has a very low credit score, he is still entitled to apply for this type of loan program.

With payday cash advance loans, spending is controlled.  A borrower is not tempted by a situation where he can run up a huge balance. The borrower knows how much would will be billed for his loan payment on his next payday.  Whatever is written in the contract is precisely the amount that will be paid.

Payday cash advance loans are designed to be paid within one or two payday periods.  Paying your payday cash advance loan as soon as possible reduces the overall costs and improves your credit score.

As a responsible creditor, you must deal with commitments in a responsible way. Payday cash advance loans are not to be used in a frivolous way.  Have a plan on how your money will be spent and stick to that plan. Undoubtedly there will be more hard times ahead. What matters is to use all possible means to cope and get back on track. There may be more bumps ahead before you can achieve your financial goals but by taking the right steps to deal with your finances, you will get back on an even keel.

Resilience Coupled With Payday Cash Advance Equals Financial Stability

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More and more individuals are worried about their family’s future.  Even those who are fortunate enough to be employed are not alien from the struggles of paying off financial obligations.   Many have significantly cut down on their spending including credit card usage. This is due largely because of the increased costs that come with borrowing cash from credit cards.  Loans made through banking institutions whose interest rates are sky rocketing and you have to go through form and form in order to apply for a loan are not very convenient either.

So what is the best alternative to meet your monthly obligations, even before pay day?  How will you pay your monthly mortgage when what you’re earning is no longer enough to cover all your regular monthly expenditures?  How do you keep up with utility bills whose due dates fall just before pay day?  What are your best options when faced with these kinds of problems?

One of the most popular convenient financial solutions are online payday cash advance loans. This short term financial option is usually used by borrowers for paying for crucial financial obligations like medications, house improvements, expensive car repairs,  costly medical bills or any emergency expenditure that comes up unexpectedly.  It does not really matter how the money is used.  The borrower is given the prerogative how he wishes to utilize his loan.

According to an analysis made by creditcards.com, the usual borrowers of payday cash advance loans are those employed individuals who make over $47,000 a year and have been employed by one employer for more than four years. This is contrary to the notion that payday cash advance loans are intended for those in very low income brackets.

In a recent study made by a Wallstreet analyst, is was found that the average payday loan borrower makes an average of 11 transactions in a year using deposits and withdrawals.

Payday Cash advance loans do not require collateral like houses, trust funds, bonds. Although the interest rates are much higher than regular secured loans, they are definitely lower than what most credit cards charge. This type of loan risk is usually at the medium level.

If you pay your loans late or you fail to pay for your loan, your loan provider will still charge you additional interest along with fees and put a ding on your credit rating. Payday cash advance loans are the best option to consider when you opt to pay off higher or variable interest debt for a lower fixed rate payment.

Remember, the heart of any recovery is your attitude towards every crisis. By being resilient and keeping a tight leash on spending you will have a good remedy to an ailing financial situation.

Understanding Payday Cash Advances for Making an Informed Decision

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Payday cash advance sites are very useful online resources that provide timely and informative data on financial products that we can take advantage of especially during times of need. As more and more people are becoming interested in taking advantage of this short term quick cash lending option, the need for more information continually grows.

 
Having less information about a certain product, like payday cash advance loans, imposes limitations on a persons financial options.  By not taking advantage of an alternative financial option when one is in dire need, limits your ability to rent a car, buy plane tickets online, pay for medication or make any necessary purchases. Having no cash on hand basically shuts you out from getting the products or services you need.

 
It is important to know that there is help available. There is an untapped resource that you can take advantage of to keep informed.  Blogs, reviews, articles, and posts that are continuously updated will keep you informed about the recent developments about payday loans and added services that makes this loan option a convenient alternative. Perhaps, you might have queries or experiences you want to post or there might be an article that correlates to your interest about payday loans. Either way, such online information can be very helpful.

 
How do you make a comparison between a payday loan and another alternative financial option?   Any interested borrower should try to shop around online for the best deals before finally deciding to take out a loan. Well-researched information fuelled with understanding from loan provider goes a long way. An interested borrower may browse through sites 24 hours a day whenever it is convenient for him, from Monday to Sunday even during holidays since online payday loan sites are open to cater to your loan needs all the time.

In an important article on payday lending, Stegman (2007) found out that 5% of the total US population has taken out a payday cash advance loan at some time in their lives.  Approximately 10% are still apprehensive about taking advantage of this loan option and are somewhat unlikely to obtain a loan because of apprehensions of being victimized by predatory lenders who are operating online.

 
Regardless of whether it is a negative or positive, any information that gives an interested borrower a better perspective about which option is best to take by weighing all the ways a payday cash advance loan may benefit you and your financial status.
According to Petru Stelian Stoianovici, a researcher from the Brattle Group of Companies and Michael T. Maloney, an economics professor from Clemson University, “there is no empirical evidence that payday lending leads to bankruptcy filings”.

US Households Brace Themselves for Climate Changes by Taking Cash Advance Payday Loans

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Cash advance payday loans were quite popular recently especially from December through February of 2012 as bitterly cold blast of arctic air invaded the Northern Plains, Midwest and Great Lakes, snowfall averages were above normal conditions. US households braced themselves for the recent climate change by taking advantage of this fast and efficient popular loan option to cover their expenses during the cold months for house repairs, winter proofing, roof repairs to protect against heavy rains, storms and extreme temperature brought about by climate changes.

A recent United Nation report on climate change states that United States has shown itself to be very vulnerable to extreme weather events and households should start making the necessary adjustments to the extreme weather conditions. Taking into account the damage made by Hurricane Katrina, more households are weather proofing their homes for extreme weather conditions.

Some emergency purchases made from cash advance loans by borrowers are for boilers and essential household repairs.  It is during winter months that a lot of heavy use is put on their heating system. The cost to repair a boiler is quite expensive and buying a new one is more difficult because of the high demand the stock is slowly running out.

As bank lending has dropped substantially in the US market, cash advance payday loans are gaining strength as this popular loan option has become a quick and efficient alternative to regular bank loans. Compared to sub prime lending, which caters mainly to people with high credit scores, cash advance payday loan lenders do not care if a borrower has a bad credit score.  In fact borrowers with very low credit scores are still qualified to take advantage of this popular loan program.

As long as the borrower is a permanent US resident who is receiving a regular monthly income of not less than $1,000 a month he is qualified to apply online, by phone or through a regular lending office face-to-face appointment. For online transactions, borrowers may apply even after office hours as a loan representative can be reached 24 hours a day, 7-days a week for the convenience of the borrower.

Just fill-out a simplified loan application online loan which will be the basis of how much money will be granted by the loan provider.  So, it is very important to give the correct information on the application form.

A flexible repayment schedule by lenders makes the payday loan more attractive to its target market.  Payday loans also appeal to people  who need to borrow to avoid late payment penalties on bills and bounced-check fees but do not possess a credit card or credit line.

This popular loan option will continually evolve and transform as more and more people are taking advantage of its dependable features. It is truly a terrific alternative to a traditional loan.

Sourcing Out Funds from a Cash Advance Payday Loan for an Unexpected Financial Trouble

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The recent financial market instability has been affecting so many families and businesses all over the United States and has caused collapse in several large financial institutions and businesses.  Many filed bankruptcies while others had to resort to job lay-offs and some companies downsize their operation in order to continue in business.

This prompted a lot of lending institution all over America to offer cash advance loans to financially stricken individuals who are trying to make ends meet until the next pay day.  Many took advantage of the cash advance loans. It has become a popular loan option that a lot of people are relying on for a quick source of funds because of its reliability and easy access. This type of loan option answers the demands of a threatened financial economy where anyone can be subjected to unexpected financial troubles.

With cash advance payday loan, a borrower may apply for an online loan anytime, anywhere, whenever he needs it.  He only needs to fill-out an online application form first and submit it online to the loan provider of his choice for proper assessment. Once the loan is approved, borrowers may access their cash advance loan through their personal bank accounts.

It is also important to note that legitimate loan providers do not give out the data supplied by borrowers on their application form to any third party as all data received online are secured.  Loan providers provide their clientele with secured online sites to make sure that all personal information supplied online cannot be used for other purposes besides the loan that is currently being applied for.

The amount of cash advance loan depends on the borrowers income and capacity to repay. Usually loans range from $100- $1500 and may go higher depending on the borrowers information.  Loan applicants with bad credit score may still take advantage of this popular loan option since most cash advance loan providers are not concerned with the borrowers credit score.

 

However, to avoid incurring unnecessary surcharges and additional fees for late or delayed payments, borrowers need to repay their loans as soon as the next payday arrives.

Deductions from the borrowers pay check will be based on the agreed contract before the loan is approved.  Only fees discussed during the application process are deducted from the loan payment.   Surcharges should be kept minimal or waived depending on the lending firm holding the account.  That is why, borrowers need to understand the loan contract terms and conditions accepting funds from this popular loan option.

So why bother going through the worries and the infuriating situation of not having the needed cash on hand for that unpaid utility bill?  A cash advance loan can easily help get you through it.

Cash Advance Loan an Attractive and Lucrative Financial Option

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As the U.S. economy struggles, investors especially in the financial market, take  center stage by offering financial services, like cash advance payday loans, to struggling employed American individuals who need a little help to make both ends meet just before payday.

It seems that on every street corner all over the United States, cash advance loan providers have built shops to make this popular loan option more accessible to their clientele thus, improving their services to the highest level of convenience, reliability and accessibility.  However, to date there are also a lot of loan providers online offering cash advance payday loans ranging from a $100 to $1,500 depending on the borrowers capacity to repay.

If you are  considering  a payday cash advance loan to keep up with your monthly payments on other existing debt accounts, take some time and review or assess his current financial standing to know which loan program will best suit you.

Whether it is a popular loan option like a short term cash advance loan with flexible repayment options or a long term loan option like a bank loan program, take extra time to research because these loans are can be pretty expensive and if you get into the habit of taking out a loan frequently, you could be spending a lot of money.

That is why a borrower needs to be informed about the loan options he wishes to take advantage of before agreeing on the terms and conditions stipulated in the contract with the loan provider. Having the right information saves the borrower from a lot of trouble in the future.  It also helps if the borrower can look at the online reviews of the cash advance loan providers and find those with good track records.

One of the best features of a cash advance loan that has made it a popular loan option are convenient services. People like this popular loan option because the loan application is easy and the requirements are minimal. This source of money offers a lot of attractive and lucrative features.  Loan eligibility criteria is simplified.  Borrowers with really bad credit scores are welcomed to take advantage of this popular loan option because lenders do not check a borrowers credit scores nor require borrowers to fax qualifying documents.  After a lender completes an application online, it is automatically assessed and in a few minutes the borrower is informed of the status of his application.  If the loan is approved, the borrower may withdrawal the money from his personal bank account where the money has been transferred by the lending company.

To make cash advance payday loans a more popular loan option, a lot of lenders provide optimized online sites that can be access by friendly mobile devices like smart phones to get market news and updates of loan promos, freebees and added services. These optimized online sites are also a means for lenders and borrowers to keep a regular communication about updates regarding loan applications and reminders of due dates.