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Archive for May, 2012

Payday Loans for Single Mothers

May 11th, 2012

Single mothers often find themselves in a predicament where money is short and extra cash is needed to make it through to the next payday. Paydays provide a quick and simple solution for single moms who have no other alternative as a way to gain cash instantly. Applying for a traditional loan can take days and this can lead to utility bills being shut off, eviction notices being distributed, and to cars being repossessed.

Many people have financial troubles, and when one person is responsible for raising children alone, it can be difficult to find cash immediately when it is needed. These occasions can make having access to loans something of a lifesaver to many single moms. Payday loans are also often referred to as cash advances. This is because a loan is extended, commonly in the range from one hundred dollars to fifteen hundred dollars, and then it is paid back in installment payments each time the person gets a paycheck from work.

If a single mom receives a monthly paycheck from child support or from an earned income, she can sign an agreement to pay back her loan in small portions each time she receives her monthly paycheck. Many loans can also be set up to be paid back in weekly and bi-weekly installments. This helps to keep the repayment amount reasonable and allows the person to make several small payments as opposed to a few large payments. This has often worked best for many single moms who are on a limited budget.

Moms who live alone with their children often tend to find that the ends do not meet. Working full time or part time, going to school, and taking care of children can result in a hectic and fast-paced life. When an unexpected expense occurs, or when a single mom must miss a few days of work due to her child being sick, it can be a struggle to remain current on basic household bills. During these times, loans can be an easy solution to a very difficult financial situation. The single mom will have the opportunity to fill out a loan application online, over the phone, or drive to a local payday loan center to fill an application out.

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Posted in PayDay Loans

Tags: fast paced life one hundred dollars person time

Traditional Payday Loans Better Than the Banking Alternative

May 11th, 2012

Recently, banks have joined the trend in offering short term, small amount loans to customers all throughout the United States. Wells Fargo was the first bank to introduce cash advance imitation loans. In due time, they became the catalyst for institutions such as Fifth Third Bank, Religions Financial, and U.S. Bank. Unfortunately, these loans are often dangerous, and can cheat innocent citizens out of thousands of dollars.

A bank payday loans is slightly different from the traditional independent payday loans that have swept the nation. Bank loans can only be made if the borrower is receiving direct deposits from an employer of government benefits. According to a Dallas news site, 25 percent of these loans are granted to social security recipients. As well, many of these borrowers are elderly people. The banks usually charge triple digit interest rates for one of these short term loans. Unlike traditional payday loans, these bank loans usually have a more complicated and restricted application process than independent short term loan organizations. A traditional payday loan store or website can be restricted to certain interest rate caps. 17 states in America have enacted a 36 percent interest rate which protects many customers from borrowing over their heads. Banks are exempt from these mandatory interest rates, so they can often bring their prices much higher than their counterparts.

The Center for Responsible Lending issued a warning last year against the up-and-rising popularity of bank payday loans. These loans, the CRL states, can lead up to 16 loans in succession and 175 days of indebtedness. This is twice the length of time that is advised to carry a loan by the Federal Deposit Insurance Cooperation.

An online payday loan is a much more convenient way to borrow. Customers need to be cautious when taking out any type of short term loan. Still, online payday loans are often the safest and easiest transaction. These loans take just minutes to apply for and many companies only ask for basic information. The companies can usually complete your transaction within a day, getting you the money you need as fast as possible.

If you are considering a payday loan, you must be cautious and borrow with care. A reckless borrower will get into trouble, because payday loans are only meant to last two weeks to one month, or until your next payday. When these loans are extended or “rolled-over” it can carry extreme consequences and costs can skyrocket. A wise borrower will be able to obtain one of the loans with little effort and pay them off on time.

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Posted in PayDay Loans

Tags: short term loans social security recipients term time

Why Do Payday Loans Have No Faxing Involved?

May 11th, 2012

If you’ve applied for any kind of loan in the past then there’s a good chance that you will have been asked to fax documentation through to the lender. This is usually done to confirm specific details, including your latest bank statements and possibly even your pay slip from work. So why don’t most payday loan companies request the same information?

When you are asked to fax documents, it creates an additional delay. Not only do you need to locate the original documents, but you then need find a fax machine too, which is becoming increasingly challenging. Some lenders will accept scanned documents as an alternative, but this still complicates what is an otherwise simple process.

The reason why banks will still often expect you to provide any such supporting documents for long-term personal loans is simply because they need to verify your financial stability. If you’re borrowing thousands, potentially even tens of thousands of pounds, then the lender needs to be sure that you will be in a position to repay. This means accumulating as much information as possible and utilising all of the data available to them to inform decisions.

In the case of payday loans, any such information gathering would be a little excessive. After all, these aren’t loans for thousands of pounds, nor will they be repaid over the course of a number of years. But not only do short-terms lenders not need the same amount of information, they also won’t be looking to only accept those with a spotless credit history.

After all, if you only want to borrow £150 for 10 days, why would a payday loan company need to know that you missed a bill payment last year or have 3 complete bank statements? Whilst checks still need to be employed, they don’t need to reach the same levels as those employed by the long-term loan providers. This is why some form of proof of employment may need to be offered and bank details will need to be provided and verified. However, this shouldn’t delay the application process unduly and will only be required when using a company for the first time.

So whilst the payday loan providers may be seen as taking on more risk, in so far as they accept applications from people who would possibly be rejected elsewhere, they do off-set this in a number of ways. Firstly there’s the interest. With customers required to pay up to £25 for every £100 they receive, lenders are able to recoup any losses from defaulting customers quickly. Whilst they will do everything possible to avoid accepting applications from those who are unlikely to be able to find the required funds, it’s an unfortunate bi-product of any kind of lending.