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Sen. Brown proposes alternative to 'payday loans' – 21 News Now …

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COLUMBUS, Ohio –

With millions of Americans turning to payday loans to make ends meet, U.S. Senator Sherrod Brown is proposing a short-term cash advance solution.

Low-income workers nationally would be allowed an advance on their income tax refund, rather than turning to payday loans for a quick influx of money, under a proposal U.S. Sen. Sherrod Brown made on Wednesday.

The proposal would allow low-income families and individuals to receive a portion of their earned income tax credit, ahead of tax time.

Those who are eligible could receive the early refund without fees or interest on the tax credit up to $500. The amount received early would be deducted from the person’s refund at tax time.

Senator Brown says the bill isn’t designed to help everybody, but those working hard and still receiving a relatively low income.

“The couple of months before they’re eligible to get their tax refund they might have some serious financial problems where they just need a few hundred dollars to be able to tide themselves over until they get their refund, we would advance $500 of this no more than that under our plan,” said Sen. Brown.

Brown said his proposal is an alternative to payday loans, which can carry hidden fees and large interest rates.

“Ohioans shouldn’t be trapped with a lifetime of debt from predatory loans particularly if they have tax refunds waiting for them,” Brown said. “Three-quarters of Americans who turn to costly, high-interest payday loans may have money that they can claim each tax season in the form of the Earned Income Tax Credit.”

To participate, workers would enroll in the program through the employers mid-year and request the early payment.

[…]

Consumer loan or credit card loan?

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Many of us plan to make big-ticket purchases like an LCD television, a high-end mobile phone or laptop during the festive season. Not only is it an auspicious time to buy new articles, it is also the time when retailers come up with attractive offers such as discounts and tie-ups with financers. Banks and Non-banking Finance Companies (NBFCs) also offer loans on credit cards and durable loans. Which of these two options is better?

A works in the form of the cardholder first on the card and immediately converting the expense into a loan, which is repaid in the form of EMIs that constitute repayment of both the principal and interest. The interest on a credit card loan is generally lower than the rates charged for a normal credit card expense. When a loan is taken on the credit card, the outstanding credit amount comes down to that extent.

In the case of a consumer durable loan, the bank or NBFC offers a loan for the value of the product, with a small down from the borrower’s side. The bank or NBFC also charges a processing fee for the same. The loan is repaid in EMIs for a pre-specified tenure. In most cases, a pre-closure charge is levied if you want to close the loan before the specified tenure. Let us understand the differences between the two with the help of a case:

(See the table below)

In spite of the obvious high interest of the credit card loan, which makes the total repayment high, the fact that Borrower 1 gets an upfront cash

of Rs 2,000 and converts the payment after discount as the loan. So, he manages to pay only as much as Borrower 2, who opted for the consumer loan.

On the other hand Borrower 2 shells out Rs 2,000 as down payment, whereas for Borrower 1 this loss is his gain. However, in spite of Borrower 1’s gain in this respect, do remember that in the case of a credit card loan, his credit limits falls to the extent of the loan.

Further, if Borrower 1 happens to miss out on an EMI payment, he will have to pay exorbitant charges to the bank on account of interest and late payment fee. As compared to this, for Borrower 2 there is no problem of a reduction in credit limit, and so on.

Zero per cent schemes by NBFCs:

Many in the country offer consumer durable loans to consumers which is given at zero per cent interest cost. How does this scheme work? The NBFC has a tie up with big retailers to fund consumer durable purchases. Accordingly, the retailer offers the loan scheme to the consumer when he decides to purchase the product. The loan is not charged interest. However, since the loan comes at zero cost, the retailer does not offer a discount on the product, which is usually offered for full cash payment (see example above). There is also a possibility of higher processing fee. For example, if you wish to purchase a mobile phone worth Rs 25,000 and take a zero per cent scheme, you forego the discount offered by the retailer (let’s say 10 per cent, that is, Rs 2,500). The NBFC charges a processing fee of 2 per cent, Rs 500 in this case. So you end up paying an extra Rs 500 and losing an extra Rs 2,500, meaning you pay Rs 3,000 more for what you got. So in this case, a zero per cent scheme is not really zero per cent.

The RBI, recognising this, directed banks to discontinue this scheme in 2013. NBFCs are still allowed to give this offer. Some NBFCs that offer this scheme are Bajaj Finserv and Tata Capital. One should find out all the details such as availability of discount, processing fees and other terms to understand if the scheme is really zero per cent or not.

Which is the best option to fund big-ticket purchases?

Choosing a credit card loan or consumer loan depends on several factors – the scheme offered by the retailer, your relationship with your bank, other purchase schemes in the market and your financial situation. These schemes are still quite popular, especially during the festive season. That said, it is advisable to take a credit card loan or consumer durable loan only when there is no way out. These schemes are expensive and also do not give you any benefits (such as tax benefits), except giving you access to funds for your lavish purchases. Using these schemes simply because they are available can hurt your finances.

Instead, one should explore other loan schemes, which can work out to be cheaper such as a loan against fixed deposit (interest cost of FD interest rate +2 per cent). These loans, however, are not instant like credit card loans and consumer durable loans. But they work out to be less expensive and safer for your finances. One should look at all options available in the market, rather than blindly opt for the easy way out.

The author is CEO

,

BankBazaar.com […]

How do Philadelphia Payday Loans Work? | Global Alliance for …

Chances are you have heard about Philadelphia payday loans. You see commercials for them or local advertisements. You may see walk in locations in your town. There are ads for them all over the internet too. Some people assume that they won’t qualify for a Philadelphia payday loan so they never try. The title can be misleading as many of the lenders offer funds to anyone over 18 as long as they have steady income.
This can be from a job or it can be from other benefits such as retirement or child support. The amount of money that you make per month doesn’t have to be high either. It all depends on the particular lender. Some of them have stricter requirements than others. The goal of these lenders though is to help people in need to borrow money quickly.
The application process is very fast. There is never a credit check, so you just supply your pertinent details. This includes your name, address, and income. You may have to provide a photo ID for verification purposes. You can request a certain amount on the loan application or just see what you qualify for. It is wise to know how much you need, and to never accept an offer for more. You have to pay interest on what you borrow so be wise about it.
Once the Philadelphia loan application has been reviewed, they can tell you how much you qualify for. If you are at a walk in location, they can complete the documents and you walk out with your money. This is often in the form of cash or you can get a check that you take to your local bank. If you apply online, they can send you a check. The most common method though is for them to deposit the funds directly into your checking account through ACH.
Just like any other loan out there, you do have to pay back the money that you borrow. With Philadelphia payday loans, you need to understand that repayment before you apply. Since there is no credit check, the interest rate is the same across the board for each applicant with that particular lender.
You may have to pay back the entire Philadelphia loan the next time you get paid. However, if that will create an ongoing hardship for your budget, then you need to look at other options. There are payday loans out there that provide you with the chance to pay back that money in installments. Keep in mind that the longer it takes you to pay and the lower the payments, the more you will pay overall for interest.
If you don’t have any credit, it can be hard to get a bank loan without a co-signer or collateral. If you have poor credit then it is almost impossible to get lenders to help you. Going to friends or family members for a loan can be stressful and embarrassing. Payday loans can be a short term option to help you get money quickly and without hassles. In many instances, you can get the funds the same day that you apply for Philadelphia payday loans.

This entry was posted in Uncategorized on by . […]

5 Questions to Help You Decide Whether to Save or Pay Off Debt

If you’re in the enviable position of having some extra cash in your bank account that hasn’t already been claimed by bills, then you might be asking yourself: Should I use the money to pay off debt, or simply save it? It’s a perennial question with a difficult answer, because it depends largely on the status of the rest of your financial life, as well as your expectations for the future.

With that in mind, we created the following five-step guide to help you think through what move is best for you and your money.

1. Do you already have an emergency savings account? We all need an emergency savings account at our disposal, even if we still have high-interest credit card debt to pay off. That’s because emergencies can happen at any time. We could suddenly need a root canal, a plane ticket home or washing machine repairs. We can’t necessarily count on credit cards and other sources of loans to be there when we need them, especially if we don’t already have a decent credit line in our name, so we need our own stash of cash for these types of emergencies.

[See: 10 Quirky Ways to Save Money .]

Funding emergencies ourselves through savings also avoids the danger of building up more debt and interest payments later. Financial advisors generally suggest that you should aim to have at least three months’ worth of expenses stored away.

Even if money is tight or you’re just out of school, putting a portion of your paycheck aside for a rainy day is a top priority and is even more important than paying off debt, at least at first. If you already have an emergency savings account ready to go, continue to the next question.

2. How much is your debt costing you? Many people don’t make this simple calculation, but it shows just how costly debt is. To do the math for your own debts, make a list of all your loans: auto loans, mortgage, credit card debt and anything else on the books. Next to each amount, write down the interest rate. (If you don’t know off the top of your head, look it up!) Multiply the two numbers, and that’s how much each loan is costing you per year. A $10,000 car loan at a 6 percent rate costs about $600 a year. Keep that number in mind as we move on to the next step.

3. How much would your savings earn you? If you do save this cash infusion, where would you put it? In a bank account that’s earning a 1 percent return or less? Or into a money market fund, which might pay you more (but also might not)? In the current market, it’s difficult to earn even 1 percent without taking on more risk. Pull out your notepad again and write down the total amount of cash in question, and multiply it by the rate of return that you could get on the money.

[U.S. News Quiz: Do You Know What to Do With Your Money?]

Now, take a moment to compare your findings from step two and step three. Would paying off a chunk of your debt save you more money than you could earn by saving the cash? If so, then you might be better off getting rid of the debt. That’s a valuable piece of information that will help you make the final decision.

4. What are your expected earnings in the near future? If you expect to receive an additional windfall in the near future, in the form of a payday check, gift from parents, tax refund or any other income boost, then you have a little more flexibility because you’ll have more money to work with soon, and perhaps you can pay off debt as well as save.

5. What are your financial goals? If you have big plans that require a lot of cash, such as starting a small business, buying a house or traveling around the world, you probably want to pad your savings account so it contains more than just an emergency fund. Of course, paying off debt can also be helpful because then you can embark on these new financial adventures without the added weight of old loans. But you still need cash to make those big goals happen.

[See: 10 Things Everyone Should Know About Money .]

The final answer will depend on how you answered the questions above, and it might involve a mix of spending, saving and paying off debt.

FinanceBanking & Budgetingcredit card debt […]

Learn About Payday Loans with John Oliver and Sarah Silverman …

Late Night

Learn About Payday Loans with John Oliver and Sarah Silverman

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| August 11th, 2014

Here’s a clip from last night’s Last Week Tonight, in which John Oliver breaks down the corrupt payday loan industry — or as he describes it, the “recycling symbol of human misery” — with a little help from Sarah Silverman in the form of a counter campaign ad.

[…]

Find A Solid Payday Loan Today | Money Insight

Most families will need a Nevada payday loan at least once just to make sure that they can make it through some hard times. When the family is looking for a way to get through these hard times, they must make sure that they working with a company that can provide them with loans that are easy to apply for and pay off. The best payday loans help the family while providing them options for the future.

The Application

The application process for a payday loan must be done by the family online or in person to make sure they can get approved as fast as possible. When the family fills out their information online, the approval team can go over the application quickly. When the family fills out a paper form, they will hand it off to a worker who can go over the application with an underwriter. The goal is to approve these loans as fast as possible, and the only way to make sure that the family gets a quick answer is to work with companies who provide these fast services.

The Payment

The payment that the family receives from the loan can come in the form of a check or direct deposit. This means that the family can get their cash in a form that works best for them. The family does not have to accept payments forms they cannot use, and the family is free to cash their check or use any bank account for a direct deposit.

The Payoff

When families are looking paying off their payday loans, they must make sure they understand the terms of their loan. Some families will need a little bit of extra time to pay off the loan, and other families will make the small monthly payments until the loan is completed. The interest rates and terms on the loan application will show the family how much to pay.

The best way for a family to get through tough financial times is to use a payday loan to fill their coffers. They can get a quick approval, easy payment and pay off the loan as fast as they like.

[…]

Appreciating What Payday Loans Are All About | Welfare ALA


Appreciating What Payday Loans Are All About

Posted by kerala on Jun 23, 2014 in

Lending

|

A payday loan is also called a cash advance and is usually given as a short term loan to a borrower either until his next payday or at any other agreed time. In most instances the main purpose of a payday loan is to offer some short term financial relief to borrowers. Prospective borrowers are thus usually advised by potential lenders not to use the service for long term borrowing.

There are companies that have longer cash transfer speeds and there are those whose transfer speeds are quite fast and the transfer is instant; thus the name instant payday loan. Different lenders offer different lending terms and periods; they vary from around two weeks to ninety days, it all depends on the lender that a borrower engages.

The process of getting these payday loans is relatively simple and easy to follow. In most instances an application for a loan can either be made online, by phone or visiting a place that offers the service. It is also worth noting that whether you are seeking for a payday loan in Texas or it’s a payday loan franklin park; the main processes and procedures are relatively similar.

Most lenders will demand some form of identification in the form of National ID, drivers license, Social security number or any other form of identification they may deem necessary. The lenders then review this information against national databases like Experian, Equifax and Transunion to determine credit capacity or credit worthiness. They however don’t perform credit checks with the aforementioned three firms as this may affect your credit score.

Some lenders may perform credit checks through some other firms like DP Bureau and Teletrack that don’t affect a lenders credit score; One key thing worth noting then is that for instant payday loans lenders will not perform credit checks that affect your credit score.

It is worth noting that not all applications for instant payday loans will be accepted though; this may be due to a variety of reasons that may not include your credit score, as the lender still reserves the right to either accept or reject the lending request.

If one is applying for a payday loan via the internet it is imperative that one reads the rules and regulations governing the lending process and pay close attention to where the site operates its loan facility from; most sites chose a particular country, state or town and its rules and regulations to govern their lending process and not the particular state or country that you may be applying from.

[…]

Action 9 confronts controversial dealer

Action 9 confronts controversial dealer | www.wftv.comEnterprise Feedback Management
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4 Ways Peeps Are Like Payday Loans | Credit.com

You see them at every grocery or drugstore checkout line — brightly colored Peeps calling to you from the display. Does anybody ever go to the store with Peeps on the list? Certainly nowhere near as many people as those who come home having purchased them.

They’re not unlike payday loans — stay with me a minute, even if you love Peeps (and we certainly do). Payday loans are never on anybody’s list of ideal ways to make ends meet. And yet, payday lending is a big business. Somehow, similar to the bright-colored marshmallow chicks we didn’t plan to buy, we may find ourselves in payday loan debt we didn’t plan to go into.

Here’s how Peeps and payday loans are similar.

1. One Almost Inevitably Leads to Another

The Peeps are technically one big marshmallow that can be easily divided into smaller “servings.” But they are joined. With payday loans, you typically sign up for one. With a plan to pay it off and be done with it. Only that probably happens as often as someone opens a package of Peeps and consumes only one. Just 15% of borrowers pay within the initial 14 days of borrowing (when they first come due), according to the Consumer Financial Protection Bureau. Even then, you’ll have already paid origination fees, and probably interest (as an annual rate) of more than 100%. While it’s true that some people pay them off right away, it’s reasonable to assume that just about everyone intends to. It’s just hard to do it. The financial situation that made you consider taking out such a loan usually isn’t going to change so dramatically in a couple of weeks that you can pay your regular bills plus pay off your payday loan. And the lender would be happy to extend it for you (for a price).

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2. They Last Just About Forever

How many centuries can Peeps last? The Huffington Post checked to see what would happen to Peeps left open on a desk, for a year. Oh, they changed a little bit, and they were definitely beyond their “best by” dates, but the difference was not terribly dramatic. (And interestingly, the older the Peeps, the harder they were to separate.) And payday loans? A year later, you may still be dealing with them. Or, maybe when you gave up on paying, the bill was sent to collections. That “temporary” loan, taken out to tide you over, can cost many times what you borrowed, and can come back in the form of a collections account that can hurt your credit. Like Peeps, a payday loan doesn’t die easily.

3. They Can Be Hazardous to Your Health

No one who buys either product is doing it because they believe it’s good for them. Besides, it’s short-term. Peeps won’t be around forever anyway. Or at least they won’t be tempting you at the checkout forever. Payday loans just seem simpler than worrying about what you’ll do in the few days before your next paycheck. The loans are normally under $500, which seems like a fairly small indulgence, and unlikely to do real damage to your finances. And if you’re in the 15% of people who pay the loan back within 14 days, it shouldn’t hurt your credit. It isn’t always destructive to your credit. Peeps, in relatively small, seasonal doses, are probably not going to hurt you. But if your goal is better physical or financial health, Peeps or payday loans can, at the least, slow down your progress. And the potential is there for more damage than that.

If you are using payday loans, it can be helpful to keep track of your credit. By checking your free annual credit reports and monitoring your credit scores (which you can do for free with a Credit.com account), you can be more aware of the impact your financial decisions have on your credit over time.

4. They’ll Appeal to You in a Moment of Weakness

As easy as it is to add Peeps to a shopping cart, it’s not entirely outside your control. You may, for example, have more control on your way home from the gym. And as for payday loans — if you’ve been digging out of debt the old-fashioned way, and an unexpected expense throws you for a loop, you may be far less inclined to take out a high-priced loan for “just a few days.” Either way, you’ve worked far too hard to let all that effort go to waste. (Though if you do slip, it’s so much easier to get back on track than if you hadn’t been taking care of yourself in the first place.)

Happy Springtime.

More on Credit Reports and Credit Scores:

How Do I Dispute an Error on My Credit Report? What’s a Bad Credit Score? How Credit Impacts Your Day-to-Day Life

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Payday Loans BBB Now Allows Access to Payday Loans in Under One Hour

New York, NY / ACCESSWIRE / April 16, 2014 / The leading payday loan search solution links customers to lenders who can offer fast cash of up to $1,000.

Payday Loans BBB makes it easy and hassle-free with its financial services that provide individuals the extra cash they need to bridge financial gaps.

At PaydayLoansBBB.com, people in need of quick payday loans will have access to lending companies who can offer the immediate solution to their money needs. As one of the most trusted American resources for cash advances, the company has connected – and continues to connect – millions of satisfied consumers with reliable lenders for years.

“This would be the fastest yet convenient way on how you can be able to get the money intended for your payday loans right away,” said the Payday Loans BBB team. “Apart from the convenience and easiness that the process would be giving you, the requirement that you are going to prepare in this particular payday loans is also easy to prepare!”

Getting payday loans ranging from $100 to $1,000 is easy with Payday Loans BBB. Customers simply need to fill out the form on the website with their personal information, which will be submitted to the company’s vast network of payday loan lenders. Customers will then be redirected over to the page of a lender that matches their inquiry, and find the rates, fees and terms of the loan.

To secure lender approval, payday loan applicants have to be U.S. citizens or permanent residents who are over 18 years old and employed at their present job for a good 90 days earning around $1,000 a month after tax deductions. A working phone number and email address are also required. A valid checking account is also needed because the funds will be transferred to it once the application has been approved.

Unlike most other payday loan services, Payday Loans BBB does not entail credit check. As a result, the process of obtaining a payday loan to cover unexpected expenses is almost instant. Funds are also transferred to the customer upon approval in a stress-free manner.

To find out more about how to get fast cash from leading payday lenders fast and on favorable terms, please visit http://paydayloansbbb.com/ for information.

About Payday Loans BBB

Payday Loans BBB is a cash advance marketing firm that connects customers seeking cash advance services with payday loan lenders. The company strives to provide the fastest connections with only the most reputable lending companies in order to provide customers with fast payday loans and emergency funds when they need them.

Contact Information

Phone: (888) 981-9098

SOURCE: Payday Loans BBB

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