Tag Archives: cash advance lenders

How to Cost-Effectively Get a Faxless Online Cash Advance

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The trend of getting an online application for a payday cash advance is by far the most convenient, most cost-effective, and the most efficient way to borrow short-term funds for emergencies. However, due to the increasing incidents of fraudulent and predatory lending practices by some online lenders, many consumers are now hesitant, to submit their online applications for faxless online cash advances.

But for those who are desperate for a faxless online cash advance to meet their urgent cash needs, they still continue to submit their online applications. In fact, in a report of the Consumer Federation of America, many Americans are tempted by the promise of quick cash and pay an average of $520 a year in fees for short-term faxless online cash advances. Aside from that, a separate study conducted by Pew Charitable Trusts’ Safe Small-Dollar Loans Research Project, found that an estimated 12 million Americans who submit online applications for faxless online cash advance loans have an average of eight loans per year averaging $375 each. This is a tremendous increase despite the fact that the economy is having a financial crisis.

Usually, in the course of 2 weeks (when the instant cash loans become due), an average of $15 is charged by an online lender per $100 borrowed, with a calculated 391% annual percentage rate. Despite the expensive cost of a faxless online cash advance, many still patronize these lending institutions because they do not require a credit check or documents that need to be faxed to get the cash they need.

One of the most common problems associated with these short-term loans is indebtedness. In a survey, an average borrower of a faxless online cash advance loans takes out 8 loans in a year and is indebted for approximately 5 months after because they continue to renew the original loan. As a matter of fact, there are millions of Americans who have submitted their online applications to online lenders and been approved in minutes, but have struggled for months to repay their loans.

In view of this, it is important that any borrower who wishes to apply for a faxless online cash advance must be well-informed about what he will be facing upon the submission of his online application to an online lender. Basically, here are the basic steps to cost-effectively get a faxless online cash advance:

1. Selecting a Loan Product and an Online Lender

You need to provide some very basic information about yourself and the type of loan you seek. Most online lenders will ask you about your contact information and employment information, as well as a brief description of the type and amount of faxless online cash advance that you want.

2. The Borrowing Process

Once your online application for a faxless online cash advance is approved, you will be presented with an electronic agreement covering the details of the loan terms. You will also be called by an authorized representative from your online lender to verify the details on your online application in order to move forward with the process. So, make sure to review the terms of your loan before providing your consent via electronic signature or over the telephone, depending on how the provider reaches to you. The completion of the borrowing process comes with instruction on how you can withdraw the electronic transfer from your checking account. Usually, this will take one to three business days, depending on the online lender you deal with.

3. Repayment of the Cash Advance Loan

On the due date of your loan, make sure that your account has sufficient funds because the repayment will be automatically withdrawn from your bank account. Should you need additional time to repay, contact your online lender and inquire about a repayment option for an extension of the loan for another pay cycle. However, keep in mind that there will be for an additional charge. Make sure to avoid this option, as much as possible, to steer clear of falling into a cycle of debt.

To cost-effectively get a faxless online cash advance, research on your own to get the best rates and the best online lender.

Tips when Looking for a Legitimate Payday Cash Advance Lender

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When urgent cash needs arise, a number of people visit online lenders of payday cash advances. Though there are people who still visit storefront lenders within their locality, most people apply for payday cash advances online because of convenience. However, as the demand for online payday cash advances increase, the number of fraudulent lenders and scammers has also increased.

There are a number of loan companies on the web that are pretending to be the best payday cash advance store. However, not all of them are legitimate and therefore care should be taken when choosing a loan company to deal with. Some people do not pay attention to these things and as a result, they become victims of these scammers.

It is therefore important to find a legitimate payday cash advance lender that can help you cope with your urgent cash needs. Here are some tips on ways to look for a legitimate payday cash advance lender:

Read Online Reviews

Most online reviews are a great way to get a general idea of the type of lender or loan company that you will be dealing with. These online reviews allow you to learn a lot and know specific details about the payday cash advance company, such as how long they have been in the business and how they generally treat their clients. However, don’t always take bad reviews as a negative because most people will only take the time to leave a review if they have had a bad experience.

Determine the Age of the Company

Choosing a payday cash advance lender will need a lot of research because dealing with unsecured loan lenders is risky. Therefore, it is best to look for lenders that have been in business for a long time because they have probably stayed in the business for a reason.

When you want to deal with a legitimate payday cash advance lender, check for the age of the company you are considering by doing a quick online search and reading specific details on the company’s website. Legitimate and reputable lenders stay in the business because they value their customers.

Read the Loan Agreement and How Much You Will Need to Pay for the Cash Advance

It is best not to enter into a payday cash advance contract if the lender is unable to disclose all the pertinent information necessary for understanding what the financial service will cost you. Payday cash advances are generally expensive, but there are some loan companies that charge more than the others. For this reason, it is important to watch for hidden fees and other charges which can add up and make your loan more expensive than you originally thought it would be. Also, you need to consider their terms for late payments and other penalty charges.

Above all, don’t assume that the contract is completely clear. Take a few minutes to read the loan company’s privacy policy. Make sure that the loan term, interest rate, fees and other charges are clearly stated.

Check if the Lender is Legally Registered

The best way to know if the lender you are dealing with is legitimate is by checking for its legal registration with the state government. Their website should clearly display their Consumer Credit Number to easily check their status. You may also refer with the Better Business Bureau to check for the number of complaints that the company has received since it was established.

It is important to look for a legitimate payday cash advance lender and that can truly help with your urgent cash needs.

CFSA: Payday Cash Advance Is Not Predatory Lending

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The industry of payday cash advance has been tagged with the term predatory lending for several years. Lenders of payday cash advances have been accused of charging very high fees for their loan and have been putting consumers in a cycle of debt without an escape.

Many times, the terms predatory lending and sub-prime lending have been used interchangeably but they are not synonymous. Payday cash advances have been considered to be sub-prime lending since they are unsecured loans. Sub-prime or unsecured payday cash advances may have high fees but these can be attributed to their short loan terms. So, referring payday cash advances as predatory lending, in general, is unwarranted.

Predatory lending is best defined as a harmful form of sub-prime lending. This means that predatory lending is practiced when consumers of payday cash advances are forced to take loans they don’t necessarily need or may put valuable assets at risk. However, it is clear that not all lenders who offer payday cash advances are predatory.

The CFSA or Community Financial Services Association of America, the national association of lenders of payday cash advances, has set guidelines to prevent predatory lending. These guidelines, known as the Lenders Best Practices, have been implemented by all of the members to assure consumer protection and preserve the reputation of responsible lenders.

The CFSA also reiterated that predatory lending must not be associated with all lenders in general. There are a lot of lenders who practice responsible lending practices. This has been supported by Federal Reserve Governor Edward Gramlich who said in his address at the Texas Association of Bank Counsel in South Padre Island, Texas last October 9, 2003 that predatory lending involves at least one or all of the following elements:

·    Creating loans that are unaffordable and based on the assets of the borrower rather than on the borrowers ability to repay.

·    Forcing a borrower to refinance a loan repeatedly to be able to charge high fees.

·    Applying fraudulent or deceptive strategies to hide the true nature of the loan.

According to Gramlich, those lenders who practice this type of lending can be referred as predatory. In contrast, responsible lenders lend money according to the borrowers steady income and ability to repay. In terms of refinancing loans, most state laws regulate or even prohibit such practices. Even the CFSA encourages their members (payday cash advance lenders) to limit rollovers to 4 or depending on the imposed limits of the state.

In addition, responsible lenders carefully disclose all information (costs of the loan, interest, additional fees) to their consumers. Even the CFSA has required their members to disclose the cost of the loan in their signage and provide educational brochures to consumers regarding the responsible use of the loan. The CFSA has imposed the following Best Practices to prevent predatory lending among their members:

·    Customers have the right to rescind any transaction (within 24 hours and must be without charge)

·    Rollovers are limited to 4, or depending on the state limits

·    Full disclosure of loan terms

·    Fair and Appropriate collection practices

·    Non-filing of criminal action against defaulting customers

·    Strict compliance with state and federal regulations on lending practices

·    Responsible lending and Truthful advertising

Predatory lending should not be generalized to all lenders of payday cash advances. There are a lot of lenders who uphold responsible and consumer-friendly lending practices.

Exercise Caution when Getting an Online Payday Cash Advance

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The ease of an online application for a payday cash advance has added to the convenience of getting one of these loans. Consumers can save time and effort because they can easily apply even in the comfort of their own homes. In addition, the online application for a payday cash advance enables consumers to apply at any time, anywhere they may be.

However, the risk of an online application for a payday cash advance is high compared to storefront lenders. Most fraudulent lending practices are attributed to online lenders. Also, remember when getting a payday cash advance through the internet you will be dealing with unknown lenders that may or may not exist. What’s worst, these lenders may be predatory in nature and may not legally meet the criteria required by state and federal laws.

So how can consumers protect themselves against online scams and other risks associated with online payday cash advance lenders?

·    Keep away from online lenders offering Faxless Payday Cash Advances.

Online lenders offering Faxless Payday Cash Advances are propagating the internet. Many consumers are attracted to these offers because they do not require an actual paper trail. Also, this is the best option for loan borrowers who don’t want others to know about their financial situation. The sad fact about these faxless loans is that the lender offers only loans with high interest rates and unfavorable terms.

·    It may sound ridiculous, but it may be better to work with online lenders who perform random credit checks.

Many consumers of payday cash advance loans turn to these financial options because there is no credit check performed. According to the Consumer Federation of America the most number of fraudulent activities are from those lenders who don’t perform credit checks. This information has compelled CFA to advise consumers to work with legitimate lenders and perform simple background checks, income verification or random credit report investigations before approving online loan applications. Responsible payday cash advance lenders see to it that their consumers are able to pay off their loans, attain financial freedom and not get trapped in debt.

·    Before signing up for the loan, read the fine details associated.

The most common advice to avoid in order not to be scammed is to read the fine print before signing up for the loan. However, many consumers still fall into this pitfall. They become overexcited about getting the loan and they fail to consider the costs and terms of a payday cash advance loan. They sign up for the loan without understanding the interest rates and the unknown additional fees associated with them. Even worse, most consumers sign up for the loan without fully understanding the terms and conditions that apply.

·    Verify the contact details and location of the lender.

The most common problem concerning online payday cash advance loans is that you don’t know if the lender is real or not. There are many websites that offer loans but are not actually lenders. They are only third parties who deal with a large network of various lenders. Therefore, it is important to know the contact details of lenders and verify that they are legitimate or not. To do this, you can search the internet (usually through Google maps) or on the Yellow Pages for the physical address which should be stated on the website. Call the phone number to verify if the company on the website is really reachable. You may also contact the Better Business Bureau and inquire about the lender.

To avoid being a victim of a scam or if you have been a victim, you may contact the Department of Consumer Affairs in your state.

Is Banning Payday Cash Advances Doing Anything Good?

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There are already 16 states in America that are banning lending practices of payday cash advances. Among these are: Arizona, Arkansas, Connecticut, District Of Columbia, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Vermont, and West Virginia. However, there are still debates whether banning these short-term loans will be beneficial or not.

The reasons cited by legislators who decided to ban lending practices of payday cash advances are the following:

·    There are increasing numbers of consumers of payday cash advances who are going bankrupt. The short term repayment period and the expensive late charges make it difficult for borrowers to repay on time. So, consumers end up filing for bankruptcy to solve their debt problems.

·    Some payday cash advance consumers are victims of harassment and aggressive debt collectors.

·    Payday cash advances have very expensive fees, usually with triple digit APR from 150% to 600%, or sometimes even higher. There are also additional charges, such as processing and verification fees, check bouncing fees and late fees.

·    There are an increasing number of consumers of payday cash advances who are being trapped in the cycle of debt. This is because when a borrower fails to pay on time, the loan is automatically renewed for one more month at an additional cost.

·    Banning lending of payday cash advances will stop misleading people into having within-reach financial services but with a very costly price.

The above mentioned reasons, banning lending practices of payday cash advances, show that it is truly justifiable. However, lenders and even consumers of these loans are still against this legislation. Although it is a known fact that these loans are costly and risky, many consumers still believe that these are the most timely financial solutions they can get in times of urgent cash needs. Here are some of the reasons:

·    Payday cash advances are easy to apply for and be qualified. There is no credit check performed and there is no need to fax documents for verification. Consumers can apply online 24-7, and get the cash they need within 24 hours.

·    Payday cash advances are timely financial resource in times of emergencies. You get the cash you need at the very moment you need.

·    Payday cash advances are practically less costly than credit cards or bank overdraft fees. They are also less expensive compared to bank and other traditional loans because they can be paid off in a shorter time period. The longer the term, the more you pay in interest.

·    When handled and paid responsibly, you get out of debt easily with payday cash advances because of its short loan term.

This is not to say that banning lending practices of payday cash advances isn’t doing any good for the states that have been implementing them. In fact, a group called the UNC Center for Community Capital conducted a telephone survey of 400 low to middle income families in North Carolina where payday cash advances are banned. In the telephone survey, only 159 reported having financial troubles they couldn’t meet with their regular income. 9 out of 10 said payday lending is bad and they didn’t miss it.

However, a staff report from researchers at the Federal Reserve Bank of New York have revealed that since the banning of payday cash advances, consumers are more likely to file bankruptcy, bounce more checks, and complain about debt collectors. According to the statistical analysis in the report, Georgia’s rate of increase in complaints against collectors was 64% and in North Carolina about 33% higher than those states who have not banned payday cash advances.

In conclusion, payday cash advances are not bad as long as they are used wisely and responsibly.

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.”