23
Jan

Pay Day Loans – Avoid the Trap

ghhPut simply, a Pay Day loan (or its equivalent, called by fancier names like Advance Pay or Cash Advance or Convenient Cash) are high rate loans that either are designed or result in “trapping” its users for a long-term addiction to such loans. One study estimates that the average rate of interest (if calculated, since such loans do not “charge interest, but charge a fee for their service”) is about 390% per annum! So in fact for every dollar borrowed, you pay three dollars in interest in a year.

Now here is a quiz.

How often do Pay Day users return to use the same service at the same usurious (imputed) interest rate?

Again, a study estimates, about 76% of the time!

So like a narcotic, once you get addicted to receiving a Pay Day loan, most of you will not get out of the hell-hole for a long time. That is because most of us, as humans, tend to do what comes of a habit.

So typically you to the Pay Day window say on a Friday of the week you do not get paid. You “pledge” your next week’s paycheck for a fee. How much fee? say 5% of the pay check. Small amount of fee, right? WRONG! You are paying 5% effectively for a week, since your paycheck will already have been cashed next week by the lender. 5% a week amounts to 260% per annum.

It would of course be ridiculous to think of it that way if you were never to return to that window. So you pay 5% that week and live happily ever after, never darkening the Pay Day door. Unfortunately, as statistics show, most of the Pay Day users are repeat offenders. Yes I say offenders because they are robbing their family of hard earned dollars.

Pay Day lenders justify their practice, which by the way is perfectly legal, since the usual usury laws do not apply to them, in a variety of ways. And in fairness, they do serve a purpose–but similar to a doctor prescribing pain killers to an addict. Among the reasons cited by them: high default rate, high risk, difficulty in recovering bad loans, absence of alternative lenders who can serve this sector etc.

So the important question is–what can you do to avoid Pay Day borrowing. Here are some tips.

1. BUDGET

2. USE S.M.A.R.T. SAVING PLAN

S is for saving

M is for managing your expenditures

A is for accumulating useful assets

R is for reducing debt

and finally

T is for tracking your yields.

The important thing is to Start Saving. Force yourself to look at every item of cash expenditure and credit card and debit card expenditures (latter are considered “non-cash”). Here are some ways:

  1. Forget changing your wardrobe each season. Most of us, men or women, can do fine with about 10-12 pairs of wardrobe–and that includes shoes, ladies and jackets and ties, men!
  2. Eat out only on special occasions. If you have an urge to eat out, try cooking a new recipe at home. It is a great way to bond with your spouse, son, daughter or older parent
  3. Start a home business, even as a hobby, but make sure it does not burn cash beyond a reasonable period, like 3-6 months
  4. Start a retirement plan, a college plan for your child, or simply a 401 K if your employer offers one. You will be surprised how quickly you can adapt to living without that slice of your pay check
  5. If you have to borrow, try a lower amount with a bank–and insist on paying back over a shorter period. Even borrowing from your 401K is better than Pay Day
  6. Maximize your home loan or home equity loan
12
Jan

Do You Qualify For A Payday Loan Refund

dddIf we look at the complaints registered with the Citizens’ Advice Bureau about payday loan firms, around 76% of complainants filed cases for a refund or compensation. You could also need to seek a refund. If you have taken a payday loan against your name and you want to seek compensation, you may want to find out if you quality to file a complaint.

Here are instances where you qualify for a payday loan refund.

Reasons You Can Seek A Refund Or Compensation

Customers may seek compensation or a refund for a number of reasons. According to research studies, about 30% complaints are about lenders who take out money via a recurring payment. About 20% customers filed complaints that fraudulent loans were taken out in their names. Below are some of the common reasons you may file a complaint about a payday loan lender.

Fraudulent loans

Lenders have to verify a customer’s identity before issuing loans. Unfortunately, the verification is not done very carefully. As a result, many customers end up filing cases that loans were taken out in their names. If this has happened to you, contact the lender right away. If they don’t seem to help you, go to the Financial Ombudsman Service.

Harassment

As far as calls or text messages goes, it is difficult to decide what is considered harassment. Lenders are not supposed to make a call or send you a message after 8pm; however, if they do, you can sue them.

Recurring payments

Typically, the collection of payday loan repayments is done through CPA. It authorizes the lender to make a request for money to your bank. But they are meant to spell it out as well as explain the way you can go about canceling payday loans. Besides, they let you know prior to taking money out. Here it is important to note that some lenders keep trying all day long if the money is not deposited in their account in the morning, which means you, the customer, may be charged a good amount of money.

Unclear Repayment amount

Make sure the repayment amount is clearly mentioned on the lender’s website. On some lenders’ sites, you can find sliding scales that you can use to know the total cost of your loan. You can go for a refund if the repayment amount is not clear.

Your financial situation

Lenders consider a lot of factors, such as your age, employment, mental health, income, credit history and income before giving money out. If they have not done the checks and you can’t afford the repayments, you ask for a refund.

Repayment problems

If you are finding it hard to repay your loan, the lender is supposed to work with you to come up with an arrangement. For instance, if you have a good repayment plan in mind, they shouldn’t charge further interest and other charges.

In short, if you have faced any of these problems with your payday loan, you may want to let the lender know. If you don’t get a reasonable response, you should take your case to the Financial Ombudsman. This authority will decide if you deserve a payday loan refund or compensation after carefully reviewing your case.

It is best to use the services of a financial firm specializing in claiming payday loan refunds. They make the entire claims process a hassle-free one helping from the start to the end. This include filling out the application form right up to referring your case to the financial Ombudsman. However, you need to hire a company that knows what you are doing as well as one that won’t mount your debts further by way of processing fees.

9
Jan

The Fast and Effective Tips For Getting Payday Loans

frOnline pay-day loans fall into the category of short-term loans that are available at standard interest rates. They are approved at least within ninety days in between the next pay-day. While you can obtain this type of fund from the office of a reliable lender, there is also the provision where you can acquire it through a reliable online finance company. This article will highlight on a few important tips that you should consider in order to get a pay-day loan from a reliable finance company by all possible means.

The first step that you should follow is to do a bit of research to find out a reliable finance company that provides this type of loan by all possible means. All you need is to visit the website of the company in order to learn its essential policies as much as you can. It is vital that you should check out if it charges hidden charges from you at any point of time. You should check out the interest rates that you will be charged and you should also try to find out the total amount of fees that you will be charged if you fail to pay it back at the right time.

The second step that you should follow is to find out websites that contain reviews of this type of organization in the best possible way. If you are unable to find out any such review about it then it is advisable that you should try out other sources as well. All you need is to visit the local agency to find out any such review as quickly as possible. If you find a negative review or rating, it is advisable that you should look out for an alternative option as quickly as possible.

Once you have determined to obtain the service of this type of company, the next step that you should follow is to find out the total amount of money that you need to meet your financial requirement. Your next step is to find out if this type of company asks you for any fee if you do not pay it back within the scheduled period of time.

You should try to gather the necessary information in order to fill up the application form for this type of fund in the best possible way. It is vital to remember that the necessary information that are required to fill up this form include the details of bank account, address, telephone number, age verification certificate, social security number, employment proof, contact information of your current employer and so on.

Once you fill up the application form completely, it is advisable that you should wait patiently till it is approved within the scheduled period of time. It is vital to remember that this type of company approves it within three or four days after you have submitted your application form. In fact, this kind of company uses email in order to get in touch with you and it even sends email in order to inform you even if it is not being approved within the scheduled period of time.

Once it is approved within the scheduled period of time, this type of company can transfer your money without any kind of delay. It is vital to remember that if you allow this type of company to access your own account, it means that it can take out money that you actually owe it whenever the day of payment arrives.

If you think that you will not be able to repay the total amount of money within the scheduled period of time, it is advisable that you should renew it as quickly as possible. Although it will charge you a few amount of money, it will however not charge you a high amount of money as late fee.