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What are some examples of a good time to take out a payday loan?

A:

Over the past 10-15 years, payday loans and payday lenders have become pariahs of the finance and credit worlds. Stories abound about the deleterious consequences of being caught in a payday loan “trap,” and many people will tell you that payday loans just do not pay. However, there are some circumstances when payday loans make sense as long as they are carefully considered and paid back responsibly.

Payday loan decisions are all about necessity and alternatives: do you need the cash, do you need it soon and do you have any superior options available to you? It is a good idea to assume that almost any other legal means of acquiring a loan is going to be relatively cheaper than a payday loan. Check with your bank, look at credit card issuers, and ask a relative or friend, etc.

Payday lenders almost always have effective interest rates that are extremely high. It is not uncommon to find a payday loan and, after annualizing the interest and fees, find out the money is being lent at 300% APR or more. Even though the interest may only accumulate for a short period of time, do some research to find the cheapest rates possible. Many payday loans are available online, so that is a good place to start. Just be careful about entering any personal information through payday loan websites.

Do not take out a payday loan if you cannot afford to pay it back quickly, such as in one month or less. Avoid loans that automatically roll over. If you get caught with the wrong loan, you may end up paying more in fees than you borrowed in the first place. The most obvious time a payday loan makes sense is when you are caught with a bill or financial need in between paychecks. Suppose you have a medical bill you would have been able to afford without a payday loan by the time your next paycheck rolls around, but you do not get paid again for two weeks. Taking out a $100 to $1,000 payday loan and immediately paying it off with your next paycheck may be the answer. As always, look to other options first.

If a payday loan is the only financing option that lets you fix your car so you can go to work or take your children to school, it might be worth considering. Chances are, you will not receive a credit card or a bank loan as quickly as a payday loan. Be sure you can pay off the loan quickly and check for competitive rates.

Unfortunately, most payday loans are not taken out with these guidelines in mind, and that is where you can get into trouble. According to a 2012 Pew survey, only 16% of payday loans were taken out for unexpected emergencies. More than 80% of borrowers said they could have cut back on expenses instead of taking the loan. Avoid these mistakes because the costs of continued payday loan use are almost never worth it.

[…]

Host John Oliver Tackles Predatory Payday Loans on 'Last Week …

Host John Oliver tackled predatory payday loans on a recent episode of Last Week Tonight with John Oliver. Oliver essentially calls every single company involved loan sharks before enlisting Sarah Silverman to help explain just how awful they are.

Payday loans put a staggering amount of Americans in debt. They prey on the elderly and military service members. They’re awful, and nearly impossible to regulate. We’ve recruited Sarah Silverman to help spread the word about how to avoid falling into their clutches

[…]

??? Full Report – The Pros And Cons Of Payday Loans


The Pros And Cons Of Payday Loans

August 1, 2014

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Financing is advantageous for those that need to borrow money. These type of loan providers will give you advance funds that you will repay in the future. You may be interested in a short-term loan–the payday loan. This article tells you all about it.

Payday Loan

Consider looking into other possible loan sources before you decide to take out a payday loan. Borrow from family, work with a bank, or use a credit card–all of these options are more financially sound than a payday loan. If you can get a traditional line of credit, you will pay far less in interest in the long run.

If you cannot repay the loan when due, seek an extension. You might find your payday loan company is willing to offer you a one or two day extension. Just be aware that you may have to pay more if you get one of these extensions.

Know that payday loan scams exist. There are those who pose as payday lenders only to rip you off. When you have found a loan business, check with the Better Business Bureau online and check out their reputation.

It seems like a new company pops up daily offering payday cash advances. A payday loan provides a small amount of money lent until your next paycheck. It is usually a very short-term loan. These loans should be viewed as temporary and only used in a real crisis situation.

Payday Loan

Before taking out a payday loan, consider other lending avenues. For example, if you get cash advance on credit cards, the interest rate that you get would be a lot lower than if you took a payday loan. Talk to your family and friends and ask them if you could get help from them as well.

If you are thinking about applying for a payday loan, make sure that you will be able to repay it in full in three weeks. If you will not have sufficient funds to cover your needs when the loan comes do, think about other alternatives. Look for a lender who is willing to give you an extended loan period.

Payday cash advances give people access to the money they desperately need. Lenders give them money on a temporary basis and borrowers have to repay that money by a certain date. Payday loans are useful because they allow for fast access to cash. Remember all the things you’ve learned here when the need arises for you to take out a payday loan.

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Related posts:

  1. The Pros And Cons Of Cash Advances
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  3. Getting The Most Out Of Your Payday Loans
  4. Thinking About Payday Loans? Use These Tips!
  5. The Highs And Lows Of Payday Loans

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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

LoansFinancepayday loan […]

Check Cashing & Payday Loan Services in the US Industry Market …

New York, NY (PRWEB) February 19, 2014

The Check Cashing and Payday Loan Services industry accounts for nearly a quarter of financial services spending by underbanked consumers. Frozen lending markets caused by the recession expanded the underbanked client pool for industry operators, as a growing number of individuals were unable to access traditional financial product offerings. As such, the industry is predominately countercyclical in nature, with rising unemployment and poverty rates benefiting demand levels substantially. Rather than default on debts, poor or recently laid-off consumers chose to turn to the industry’s unsecured loan products during and subsequent to the recession. Consequently, revenue for the Check Cashing and Payday Loan Services industry is expected to increase at an annualized rate of 2.0% from 2009 to 2014 to reach $ 11.1 billion; this growth includes a 2.2% rise in revenue expected in 2014 alone.

According to The Pew Charitable Trusts, 5.5% of domestic adults have used a payday loan. In general, younger individuals that lack a college degree and generate less than $ 40,000 in annual income are the most likely to rely on payday loans. The average borrower takes out eight loans of $ 375 each and pays $ 520 in interest annually. Moreover, this average borrower is typically indebted for five months out of the year.

According to IBISWorld Industry Analyst Stephen Hoopes, “Given the industry’s reliance on poorer consumers for revenue, regulatory agencies have sought to increase legislation surrounding industry operators, as they view payday loans and check cashing fees as exploitative.” As such, 15 states currently either ban payday loans or cap the annual percentage rate at 36.0%. Furthermore, as national interest rate cap proposals are forecast to intensify, compliance costs are expected to increase, to the detriment of profit margins.

Over the five years to 2019, industry revenue is forecast to increase at a more subdued annualized rate. “Despite rising employment levels, the number of consumers that are structurally unemployed or in poverty is anticipated to remain elevated,” says Hoopes. Moreover, competition from commercial banks that offer similar short-term, high-interest products is expected to fall, given recent decisions by Wells Fargo and US Bank to discontinue these offerings. Yet, external competition is still expected to rise, largely in the form of companies that offer industry products exclusively online. In addition, expected increases in regulation are anticipated to force some industry operators to move geographic locations or close down entirely.

For more information, visit IBISWorld’s Check Cashing and Payday Loan Services industry in the US industry report page.

Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.

Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.

IBISWorld industry Report Key Topics

The Check Cashing and Payday Loan Services industry cashes checks, drafts or money orders for the general public. Companies in this industry may also offer payday loans, installment loans and other financial services. Banks and firms that operate exclusively online are excluded.

Industry Performance

Executive Summary

Key External Drivers

Current Performance

Industry Outlook

Industry Life Cycle

Products & Markets

Supply Chain

Products & Services

Major Markets

Globalization & Trade

Business Locations

Competitive Landscape

Market Share Concentration

Key Success Factors

Cost Structure Benchmarks

Barriers to Entry

Major Companies

Operating Conditions

Capital Intensity

Key Statistics

Industry Data

Annual Change

Key Ratios

About IBISWorld Inc.

Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

[…]

Will 2014 Be the Year the Bureau Takes on Payday Lending? If So …

To question number one, it looks that way. According to Kim Chapman and Carter Dougherty at Bloomberg, as well as other news outlets, Director Richard Cordray has announced his intention to move forward with regulations aimed at lenders that make small loans like payday loans, title loans, and installment loans with triple digit interest rates. The question of course is what this “oversight” and “regulation” will look like. Will the rules look something like those in Colorado, which still permits loans of up to 200% in some cases? See Pew report on this issue. Will the new regulations deem certain practices of lenders unfair and deceptive? Will regulation of online lenders be included? What empirical data will be considered in devising these regulations? Hopefully not that found in a paper I recently read on the Online Lenders Alliance website, entitled Assessing the Optimism of Payday Loan Borrowers.

The punch line of this study is that most payday loan borrowers expect to repay their loan on its due date and not borrow again. Indeed, most of the borrowers in the survey did just that. Paid it back quickly. The majority of the paper’s sample population of payday loan borrowers expected to repay the loan on its due date and not borrow again. Only 40 percent expected to have the loan out for more than one pay period, and the mean duration of indebtedness that those borrowers expected was 36 days. Interesting.

This is far less debt and these are far shorter borrowing periods than anything I have seen in my over five years of scrutinizing these loans. This is also far different from the

CFPB’s own data

, which looks quite credible and consistent with other studies on this topic, found

here

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here

,

here

, and

here

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Wondering why this study reached such drastically different results, I took a look at the methodology. All of the data came from one national payday lender who operates in California, Florida, Kansas, Louisiana, and Oklahoma. This study’s methodology eliminated the “regular” payday loan customers and focused on the occasional user. As the paper explains, “to ensure that the borrower was not in the middle of a borrowing cycle, borrowers who had borrowed during the preceding 30 days were not eligible.” The study has a super-high response rate overall, based upon this exclusion, but we have no idea how many people actually were eligible to take the survey compared to how many walked in. That would have been interesting right? To know how many (what percentage) of the people who walked in those stores were paying on a loan versus getting a new one without being in debt already? This information was likely available but was not included in the study.

We know that the profits in the payday loan business lie in having many regular customers. Lenders quickly acknowledge that the regular repeat customers are their bread and butter. Indeed, borrowers who use the loans as marketed, for occasional, unexpected bills, wouldn’t even pay the lender’s expenses. Moreover, getting new customers to become regular customers is a big important business practice, as evidenced by all the ‘first loan free” signs we see everywhere.

So what would it do to a payday loan dataset to eliminate all the current regular customers from the mix and focus only on the others, the occasionals? I’d reckon it would make the sample highly skewed in favor of those who use the loans less frequently than average, and thus who are in debt less. Heck, by definition, the sample is those folks who are less in debt. So…before we get too excited about these data and start regulating based upon them, let’s see if they can be replicated without the exclusions. The legitimacy of these data is important as the study claims to have direct implications for the proper scope of effective regulation of the product, a topic of active concern for state and federal regulators. So a payday loan is a two-week product and people end up in debt for half the year. But can the borrowers accurately predict how long they’ll be in debt? We don’t know, because this study excluded the regular borrowers who use most of the loans.

[…]

Payday Lending: FCA Unveils 'Tough' New Rules for Controversial …

Image payday-lending.jpg

Payday lenders are accused of legal loan sharking because of their sky-high interest rates and punitive penalties when repayments are missedReuters

The Financial Conduct Authority will ban payday lending adverts it thinks are misleading under a raft of new rules it is imposing on the UK’s £200bn consumer credit industry.

Payday lenders will also be limited to two ‘rollovers’ on every loan, capping the extra fees that borrowers burden themselves with by extending the life of a loan.

And they will be made to carry out affordability checks on all borrowers to ensure those applying for loans can afford the repayments.

The FCA said its “tough” new supervision will be “hands on” and it will punish consumer credit firms who it thinks are not acting in their customers’ interests – including forcing them to pay penalties and compensation.

“Millions of consumers access some form of credit each day, from paying for everyday goods by credit to taking out a payday loan,” said Martin Wheatley, chief executive of the financial watchdog.

“We want to be sure that the market works well when people need it – whether that’s for one day, one month or longer.

“Our new rules will help us to protect consumers and give us strong new powers to tackle any firm found to be overstepping the line.”

The new rules will apply from 1 April. However a cap on the total cost of a payday loan, including additional fees, will not come into force until 2 January, 2015.

Payday lending is a controversial industry. Its sky-high interest rates and punitive extra costs are considered to be legal loan sharking by critics.

It is worth £2bn of the whole consumer credit industry, but has grown quickly since the outbreak of the financial crisis and is expected to get bigger still.

Related

Payday Lending: Church of England Pensions Still Linked to WongaPayday Loan Adverts ‘Must be Banned from Children’s Television’Payday Loan Customers to Halve on Political Attacks and New RegulationBritain to Impose ‘Logical’ Caps for Payday Loans Interest RatesOfcom: Payday Loan Adverts Rocket Over Three YearsMoneysavingexpert’s Martin Lewis Slams ‘Desert of Regulation’ in Payday Lending […]

Best Payday Loans Irvine 92602 | 92603 | 92604 | 92606 | 92612 | 92614 | 92616 | 92618 | 92619 | …

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Need a payday loan? Want Cash Advance […]

Tips For Cash Advance Payday Loans | Payday Loans Turbo

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4 Wise Tips For Cash Online , specially # 3

Payday loans are the fastest and easiest way to get cash fast as the most lenders online will lend right away as long as you are receiving regular income. Gone are the days when you have to wait for several days or weeks to get a personal loan. So, when you need cash fast from time to time, opting for a loan online is not a bad idea as long as you consider a few things.

The following are tips for cash advance aka payday loans so you know what to expect.

Tip #1

There are payday lenders that deduct the finance charges outright, so do not be surprised to receive a much lower amount on your bank account. But of course, if your payday lenders do not deduct the fees then expect to pay both the principal and interest when your next payday comes in.

Tip #2

There are lenders that will gladly extend the loan, in case you do have the funds to cover both the principal and interest but not in a position to make a payment on the due date. So, check with your payday lender on this matter and of course, whether your state allows loan rollover, as most states do not.

Tip #3

Right from the start, you are fully aware that cash advance payday loans are short-term loan, designed to help you overcome temporary financial difficulties. Therefore, you must repay the loan back on time, within 14 days to 30 days. If you decided to roll over the loan, the loan will ballooned out of proportion and this could create problems for you later on, so repay the loan on due date to avoid incurring lots of finance charges.

Tip #4

Cash advance payday loans should be the last option, when there is no other source to get the money you need. These loans available 24 hours, so try to exhaust all options first before considering a loan from a payday lender online since cash advance payday loans are very expensive to take out.

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