What Shouldn’t You Use a Payday Loan For?

Posted on April 4, 2012 by Jake Griffin

With credit slowly becoming more available for everyday Americans, it’s tempted to get carried away. From credit-fueled spending sprees to small purchases that just aren’t necessary, there’s no shortage of silly spending carried out on credit cards and through personal loans. Payday loans, a form of credit that’s even more convenient for consumers, can compound the problem even more.

There’s a lot of information out there about what you should use your payday loan for. Things like repairing your vehicle, fixing lighting or windows in your home, or covering necessary expenses in the time between jobs are all legitimate uses for a payday loan. Thankfully, they’re also the type of things that most borrowers use their loan money for, especially those that do their research.

However, unfortunately there’s a great deal of silly spending that goes on between the sensible loan planners. Superfluous purchases, reckless spending, and short-term credit sprees happen on a daily basis for many borrowers, creating unnecessary risk for lenders and needless future expenses for those that take out the loans.

With the right financial education, it’s easy to avoid this common borrowing pitfall. If you’re new to the world of payday loans and you need an explicit education on what not to use your loan for, keep reading to learn more about the type of purchases and bills that cause problems for borrowers using payday loans.

First, you should never use a payday loan to buy clothing, accessories, or other ‘style’ items that you know aren’t essential to your personal or professional life. Those new shoes can wait until after your next pay check – you don’t need them now. Resist the temptation to spend your payday loan money on unimportant things and instead focus on expenses that are essential for keeping you afloat.

There are cases when this could include clothing. If you’re about to interview for a new job, a little money spent on new work shoes isn’t a big deal. Likewise, if you need to spend money freshening up your appearance before a job interview, go ahead. However, it’s never a good idea to buy a new pair of shoes, a new jacket, or new jeans purely because you think they’ll look good on you.

Second, you shouldn’t even consider using your payday loan to improve your lifestyle. The purpose of payday loans and other short-term cash advances is to keep yourself afloat through difficult times financially. Going out to the bar, spending your time in a nightclub, or buying a vacation is not good when you’re borrowing the money from someone, especially when you can’t pay it all back.

Think about your long-term lifestyle when you take out a payday loan. Instead of using the money to fuel short-term fun, use it to improve your long-term finances. A good job, a repaired car, or any other lifestyle-improving action will pay off far more in the long term than a fun weekend out with your friends.

Finally, never gamble with your payday loan. Unfortunately, some borrowers, particularly those that have found themselves out of a career, think that gambling with borrowed money will give them the chance to ‘win big’ and never worry about their finances again. Simply math shows that this isn’t the case, and that gambling away loan money simply produces greater long-term debts.

Payday loans are useful, simple, and designed to help consumers get back on their feet, and when they’re used for their intended purpose, both borrowers and lenders see the value in them. If you’re planning on taking out a payday loan for expenses that just aren’t necessary, it’s best to think about the long-term repercussions. Often, you’ll find a better, much more important use for the money.

 

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What Should You Look For in a Payday Loan?

Posted on March 29, 2012 by Jake Griffin

With unemployment figures steadily rising in many parts of the country, more people than ever are in need of short-term financing options to keep them steady from in between paychecks. Whether to pay for a looming electrical bill or cover the cost of a week’s worth of groceries, short-term loans are growing ever more valuable for much of the country’s population.

However, as popular as payday loans and short-term financing options have become, most people still don’t know what to look for in a loan. Despite the wealth of information out there about home loans, mortgages, and car financing, it’s relatively tough to find unbiased information about which types of payday loans are the best for you as a borrower.

That needs to change, and it changes here. If you’re considering taking out a payday loan to cover a looming bill or expense, it’s important to know what to look for. From interest rates to surprise fees, repayment terms to lender reliability, looking at the ‘small details’ can help you find the best type of payday loan for your personal circumstances.

When most would-be borrowers look at a payday loan, they look at only two things: the interest rate that they’ll be charged by the lender, and the amount of time that they have to repay the loan. While this is a great way to get the ‘core’ information very quickly, it’s not a great way to work out exactly what you’ll be paying back to the lender or how worthwhile the loan is.

Instead of calculating your expenses based solely on the interest rate, look at the extra fees that may be applied to your loan. Some lenders use ‘teaser’ low interest rates to get borrowers in the door, but charge hefty fees on late payments or any repayments on the loan. On the other hand, some lenders might have higher upfront interest rates, yet charge little to nothing in extra fees for borrowers.

It’s worth calculating which of these is the best arrangement for you as a borrower. If you intend to pay back your loan exactly on time, taking out a payday loan with a higher interest rate and fewer fees can be a good idea. On the other hand, if you need to borrow money for a long time, a loan that has a lower interest rate and higher repayment fees can be worth considering.

The payday loan industry is growing larger every day, with new lenders popping up fairly quickly in many parts of the country. One of the most recent entrants into the markets has come from high-end banks and credit unions. These banks offer the reliability of a well-known brand along with the convenience and short-term simplicity of a payday loan.

In some cases, this reliability is worth it for borrowers, and loans from these companies can be a good option. However, don’t trade a good deal for a well-known brand. While most banks offer a low-risk option for borrowers, they don’t always have the best rates. A lot of the time, you’ll find better deals at smaller payday loan businesses, especially online payday loan businesses.

By calculating your true loan value based on repayment fees, late fees, and the real interest rates that you’re offered, checking the company that you’re working with, and ensuring that your loan is manageable, you can save a great deal of time, money, and stress when repaying your loan. A tiny amount of research can go a long way in the end, especially when payday loans are concerned.

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What Can You Do With a Payday Loan?

Posted on March 29, 2012 by Jake Griffin

When most people hear of payday loans, the first images that pop into their mind are of struggling, unemployed individuals searching for a source of short-term financing. They think of unpaid power bills, overdue car repayments, and the lengthy list of household expenses that most of us don’t want to pay, yet are forced to deal with every month.

However, there’s a lot more to the payday loan industry than just its value as a source of short-term emergency cash. From helping people to cover urgent deposits to assisting with one-time expenses, payday loans can offer value far beyond helping the unemployed cover everyday expenses. Read on to learn more about how payday loans can help anyone, including you, to get by in life.

Payday loans are great for short-term deposits.

Are you shopping around for a new apartment to rent? Looking for property but unable to cover the often expensive initial security deposit? Many would-be renters are turning to payday loans for their security deposits on a new apartment, allowing them to cover an expense that’s otherwise difficult once the costs of everyday life – bills, fees, and groceries – get added to the equation.

A small payday loan is often enough to cover the initial deposit for a new apartment or private room without interrupting your everyday cash flow. Once your payday arrives and you’ve got more cash to spare, repaying it can be quick and simple. By using a loan, you’ll be able to keep your income at a consistent level without having a large ‘surprise cost’ cut your cash flow down.

Payday loans are useful for small but important purchases.

Did a fuse blow out in your apartment? Did your car’s tire decide to break at the worst moment? Did your window, lock, or heater break, leaving you without comfort or security? All of these situations are easily dealt with using a payday loan. While many borrowers take out loans to cover bills in the time between their work payments, many other people use payday loans to cover maintenance costs.

With payday loans available for as little as a few hundred dollars, most household repair bills fall into the affordable category for payday borrowers. With a reasonable repayment period that allows any borrower to wait for their next check, covering household repair bills with a payday loan is a very simple process indeed.

Payday loans can help with getting a new job.

Did you get a new job offer that’s just too good to turn down? If you’re transitioning from one type of employment into another, there may be a week or two-week period where you’re at neither of the jobs. If this is the case, and you aren’t able to collect severance pay from your old position, a payday loan can help you cover the short period of unemployment between your different jobs.

This downturn in cash flow happens to a surprisingly large number of professionals, even those that work in the higher ranks of many companies. If you’re lacking a financial security cushion that, use a loan to make sure you’re able to keep your cash flow and short-term spending money consistent in between jobs.

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Banks and Credit Unions Offering Payday Loans

Posted on March 20, 2012 by Jake Griffin

The world of payday loans was once relatively low-key. Storefront operations and small businesses were the biggest players in the industry, serving local clients and the occasional out-of-town visitor in need of simple, stress-free finance. It was a system that was so enduring it became the image of the payday loan industry – small, storefront lenders were an iconic presence in many towns.

Today, however, the payday loan industry is getting bigger than ever before. After expanding on the internet to include thousands of online lending outlets, the payday loan industry is extending further into a range of banks and credit unions. Some of the country’s biggest banks are starting to offer low rate, short-term loans to their customers through their retail banking branches.

Some of the new entrants into the payday loan market include Wells Fargo, a giant of the banking industry that’s been progressively shortening the minimum term of its loans for many borrowers. It’s a sign that payday loans are becoming significantly more important to many Americans, who need to secure short-term financing between their employment source’s often infrequent pay periods.

Over twenty big-name American banks are now offering payday loans at their retail outlets, with some integrating online service to ensure that processing the loans is simple for borrowers. Most bank-based payday lending programs started in 2007 and 2008, when borrowers started looking at banks as a source of short-term cash loans and other short-period lending options.

Some independent businesses in the payday loan industry have feared that banks entering the arena could result in small businesses being crushed. However, with almost five years of competition now behind them, most payday lenders acknowledge that the involvement of major banks in the industry has had quite the opposite impact, resulting in positive changes for all those involved in lending.

Credit unions, many of which rely on local customers to operate properly, are also entering the loan market en masse. An estimated four hundred credit unions are now offering cash advance services to their customers, many through local branches. Borrowers are drawn to credit unions for smaller loans due to the level of trust that many clients build with their credit union over time.

It’s this element – trust – that’s made the payday loan industry so successful thus far. What was once seen as a small-town service is becoming increasingly popular as consumers realize the value that a payday loan can offer. Much of the dogma and suspicion that surrounded the industry has vanished as more Americans have realized first-hand how valuable short-term cash advances can be.

While some industries fear competition, the payday lending world has grown along with its growing customer base. Small operators have benefited from the increase in trust that working alongside the country’s biggest banks has given them, while banks have benefited from new business. Finally, the consumer has benefited from a greater amount of choice amongst their payday lending options.

A classic example of this is in San Francisco, where the increase in payday loan outlets has caused a huge amount of new jobs to be created in the city. Today, payday lending employees outrank coffee shop and McDonald’s employees in number in the city, with more positions appearing every day. It’s an improvement not just for lenders or borrowers, but for the community as a whole.

As the industry grows even more, we expect to see more of this improvement happening. Whether you’re searching for a payday loan from a leading bank or merely from your local lender, having a greater variety of options to choose from is always a good thing.

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Payday Loans: Should You Borrow Locally or Look Online?

Posted on January 4, 2012 by eLoansDirect

Get a Loan Locally or OnlineDespite the frequent reports of economic doom and gloom, new data shows that the amount of jobs available for US professionals is increasing. Barclays Capital, one of the world’s largest financial services firms, recently confirmed that payroll conditions have improved in numerous key markets throughout the last two months, resulting in more jobs for skilled professionals.

But with any improvement in the labor market, there’s a transitionary period in which many of the once-jobless are forced to accustom to the expense of being employed. That’s right – with the new costs of commuting to work, traveling to interviews, and sacrificing time to seek a job, many of the newly employed are under greater financial stress than their unemployed counterparts.

Because of this, employed professionals are increasingly turning to payday loan providers in an effort to keep their finances stable. Limited personal cash flow and slow pay periods have put a great deal of the nation’s employees in financial lockdown, at least for week or month-long periods in between their pay checks.

How are these professionals borrowing? Most use local payday loan companies, many of which are based in retail strips in their own cities. These local payday lenders offer a convenient service. Short term loans are issued, typically with repayment periods of less than a month, and borrowers benefit from the added confidence of working with a reliable local company.

However, there’s often a more convenient, less expensive, and equally reliable option available on the internet. Hundreds of online payday offer their services at low interest rates, often substantially lower than those found at brick and mortar lenders. They also tend to have a lower fee structure due to the reduced cost of operating an online lending business.

The choice between local and online lending is one of the biggest for would-be payday borrowers, yet it’s often passed over without proper thought. There are key advantages to each approach. For borrowers in need of the lowest rates and most consumer-friendly fees, using an online payday loan provider is almost always the most cost-effective option.

However, it’s also an option that provides little in the way of support should your personal finances fail to improve. While the fees and interest rates can be low for online loans, missing a payment can result in a snowball-like effect of added costs and swelling interest. With an offline provider, getting in touch and providing a reason for late payments is often enough to minimize these risks.

All in all, it’s a personal choice, and one that deserves a great deal of thought before any application forms are filled in. If you’re certain of your future financial situation – for example, if you’re merely in need of cash to purchase new clothes for a job you’ve already qualified for – an online loan is the best option. For others, however, it might be best to search for flexible payday loans locally.

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Getting the Money you Need When you Need It, and Avoiding All the Hassles

Posted on December 15, 2011 by eLoansDirect

Get the Most Out of Your MoneyDue to difficult economic times, many people have found themselves struggling financially. Their family may have been accustomed to living off of two paychecks, but now they are only receiving one. So, how can people still afford to pay their bills and feed their family when those expenses are going up, but their income has decreased? Well, one option that many people have turned to is to get payday loans, but some people are afraid to apply because they do not understand how the loans actually work. Before applying for payday loans, people should understand a little bit about how the loans work.

How Payday Loans Work

Payday loans are similar to taking out a loan to buy anything else, but the loan does not extend out for several months or years. Instead, the loan will essentially cover the customer’s expenses until their next payday, which can be a huge relief. A lot of people are afraid to take out payday loans because they hear that the interest rates are ridiculously high, but this is not necessarily the case. First of all, people would be far better off to pay a little bit of interest in order to not have their house foreclosed upon or have their family starve. In addition, the interest rates still will not add up to a very high amount on a payday loan since people are not borrowing the same amount as they would for a house or car. Once people receive their next paycheck, they will simply need to return to the payday loan office to repay the loan’s face value along with a little interest. Payday loans should never be used as a long-term solution, but they are perfect for getting out of an occasional bind.

Payday loans are an excellent way for people to the money they need when they need it. People will find that payday loan offices will loan money to practically anyone, which is an extreme rarity when it comes to borrowing money. While payday loans are not a long-term solution, they can definitely help people out in the near future.

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How Payday Loans Work

Posted on December 12, 2011 by eLoansDirect

How Payday Loans WorkPayday loans are useful for people who need emergency cash; for those times when something comes up unexpectedly or when you run out of cash before your next paycheck. Payday loans are easy to get and will eliminate the need to ask family and friends to help you out when you’re in a pinch. In the past, people always had to go to a payday loan store, write out a post dated check and then get the cash. Simple, but not convenient when you have an emergency on the weekend or after store hours. Thanks to the internet, you can easily get a loan online in just minutes.

A payday loan is just like any other loan except you must pay the lender back on your next payday. Think of them as short term loans of a month or less. There are three standards for getting cash loans online, although each provider may have a variation on the requirement or additional ones as well. First, you must be a legal resident of the United States. Second, you must have proof of current employment so that the lender knows that you have the ability to pay them back. Third, you must have an open and active checking account so that you can receive the money. The lenders seldom check your credit, so they use these three criteria as a way to gauge whether or not you’ll be a good borrower.

When you get a loan online for the first time, you’ll be limited to requesting a small amount. Probably just one or two hundred dollars. After you successfully repay the loan, they’ll raise your limit by about $50. With each subsequent loan that you successfully repay, the limit will be raised. The maximum amount you’ll be allowed to borrow will be capped around a few thousand dollars since you’ll need to repay it on your next payday. Not many people can afford to repay a $4,000 loan on a single payday.

After filling out the online application to get cash online, you’ll need to give them permission to access your bank account so that they can deposit the money. They can usually deposit it within 24 hours. They’ll also automatically withdraw the money from your account on your next payday. Make sure that your paycheck is direct deposited into this account or that you deposit your check in the account so you don’t have an overdraft fee.

Remember that they’ll add on interest charges, which usually range from 15-25 percent, when you pay back your loan. If your loan is for $100 and the interest rate is 20% you’ll need to pay them $120 on your next payday. If you aren’t able to pay back the full amount on your next payday, there will often be options for you to extend the loan period, but those will come with additional fees. Make sure that you understand all of the fees and penalties so that you don’t get hit with more than you realized come payday.

Payday loans are simple to get and repay. Just be sure that you only get loans online for true emergencies or else you’ll get caught up in a cycle of never ending payday loans and never get ahead financially.

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No Fax Payday Loans

Posted on December 7, 2011 by eLoansDirect

No Fax Payday LoansAnyone can find themselves a bit short on cash due to an unexpected bill, auto repair or medical expense. The good new is that payday loan companies can provide individuals with short term cash advances to get through these tough times. These types of loans are very short term and allow the borrower to get the funding needed when payday at work is still a week or more in the future. And best of all, these loans can be applied for and approved online, without the borrower ever having to leave home. Often known as no fax payday loans, these cash advances require very little information on the part of the borrower and usually there is no need to email or fax any verifying documents.

About Online Payday Loan Companies

Many of the larger cash advance institutions are licensed to conduct business in multiple states and therefore are in a position to provide service via the Internet. While it is true that the loan laws differ from one state to another, these companies are able to help individuals receive their cash advance in accordance with the regulations set forth in the state where the borrower resides.

Individual states have upper borrowing limits, different maximum loan periods and certain caps on interest rates. These are clearly spelled out during the application procedure. The application itself involves determining the amount that the borrower needs in the form of an advance, the verification of an active checking account, and the social security number of the borrower, as well as a driver license number or other acceptable identification. The borrower will be asked to show where he or she receives income and on what days of the month this income is deposited; this determines the period of the loan.

Direct Deposit And Withdrawal

Online payday loan companies are convenient because there is no need to make a trip to a physical store location. The approval process often takes only several hours and the funds can be automatically deposited into the borrower’s checking account within one business day. The loan agreement will show the amount being borrowed, the total finance charge attached to the loan and the repayment due date. The finance charge is a simple percentage of the loan amount and does not accrue additional interest over time.

When taking out these payday loans no fax machine or emailing of documents is required in most cases. The repayment is also automatic, with the amount borrowed plus finance charge withdrawn from the borrower’s account on the predetermined date.

Responsibilities Of The Borrower

Those taking out an online cash advance are not bound to the agreement unless it is signed. No credit report check is made when applying for a cash advance and the borrower is under no obligation to sign the agreement when an offer of short term credit is made by a payday loan company. However once the borrower attaches his or her electronic signature the agreement becomes a legal binding document, therefore it is important to read the agreement carefully and contact the company if there is any question about the loan amount, finance charge or repayment date.

A no fax payday loan is a simple way to obtain necessary funds without having to go through a traditional lender. These loans are meant as an emergency source of funding however, and individuals should carefully consider the finance charges attached to these loans before agreeing to a cash advance offer.

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Online Payday Loans or Local Payday Loans

Posted on December 6, 2011 by eLoansDirect

Local Payday LoansWhen it comes to getting a guaranteed loan, there is nothing more guaranteed than a payday loan. All you need is a job and your ID to get cash in your pocket quickly. However, when it comes to actually securing that loan, you have two options: You can go to the local payday store, or you can go online and apply for a loan electronically.

Online Payday Loans

Using the Internet can be a convenient option to get your money right from home. There is no need to spend time driving or standing in line at your local payday lender. The application process is quick and easy and you can get a decision in minutes. Once you have been approved for a loan, your money goes electronically into your bank account.

Local Payday Lenders

If you don’t have access to a computer, it can be hard to get a loan online. This means that you have to go the local lender to apply for a loan. This can be a little more tedious, but you can still get your money quickly. Most lenders will be able to have your money to you in as little as an hour. Online lenders can take as many as 24 hours to get you your money. This time savings can be huge if you are looking for quick money to buy groceries, or another time sensitive debt.

Why Apply Online

Getting a loan online can be a good idea if you are worried about your privacy and security. Most online lenders will have security systems in place so that your information is going to stay private. Getting cash loans online is also easier if you need to re-apply. It usually entails merely clicking on your mouse, and saving your information, to get another loan if need be.

Why Stay Local

It is easier to develop a relationship with your local payday lender. This can come in handy if you are having issues repaying. Your local lender might understand that hours at work are scarce and that the economy is hurting everyone. They might be more lenient with you and take your situation into account.

Online lenders might be as well, but it is harder to deny someone extra time when you see them as a member of the community. Also consider that a local lender won’t be able to bombard you with spam and other ads simply because you used their service one time.

When looking for a payday loan, you have to decide which lending source is most advantageous for you. Online loans can be faster to apply for, and give you a larger loan amount, but a local lender will usually be able to get your money in as little as an hour. Consider who will give the best deal, and who will be more understanding should you have issues repaying your loan. All of these factors will help you decide whether you should go with a local lender or an online lender.

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Installment Loans

Posted on November 3, 2011 by eLoansDirect

Installment LoansWhat is an Installment Loan?

Installment loans are the new trend in the loan industry, but they’ve really been around for ages without people knowing it.  The term “installment loan”, at its core, simply refers to a loan that you pay back via multiple payments (or installments) rather than one lump sum.  To this end, mortgage payments and car loans are actually forms of installment loans, which of course are nothing new.

Ok Ok, But What are “Installment Loans”

Outside of the strict definition of “loans paid back via installments”, the trendy term “Installment Loans” that has become all the rage recently refers to a sort of extension to payday loans or personal loans.  Many people have moved on from traditional payday loans and personal loans and are targeting Installment Loans for their needs instead.  These loans, unlike payday loans which typically debit your bank account after your next paycheck, are paid back over time.  One major advantage this allows over traditional payday loans is that it allows the lender to loan out more money as they are not limited by the amount that the borrower can afford to pay back off their next paycheck.

Why Should I Get an Installment Loan?

There are many advantages to installment loans.  The first, as mentioned above, is that it is much easier to get more money.  Payday loans naturally limit the borrowers to the amount that they can afford to pay back on their next paycheck, which is typically as soon as two weeks away.  Installment loans dodge this restriction by allowing the borrowers to pay over time.

In addition to more money, installment loans also typically allow you to have lower payments.  Since you’re spreading your loan repayment over a longer period, each payment will be for a smaller amount and you won’t be in as much risk of entering financial trouble.

Another big advantage of installment loans is their typically fixed interest rates.  Some people morph their payday loans into installment loans by repeatedly filing for extensions.  Each time the borrower asks for an extension their APR goes up and they end up paying more in interest as a form of “punishment” for not repaying the loan quickly.  Since installment loans are built to be paid over time your APR does not go up as time goes on.  The APR you agree upon in the terms of your loan is the APR you pay as the weeks or months blow by.

More and more, people are turning to installment loans as a way to get the money they need.  Many people are using them for small business loans, personal loans, as a more prepared alternative to payday loans, and even a less risky form of open credit.  Many people tend to get into financial trouble with credit cards since their limits can often be very high and interest rates quickly skyrocket if they are not repaid the same month.  Installment loans as a form of credit work to limit the amount of financial debt the buyer can get into while at the same time making sure they are not surprised with sudden APR increases and hidden fees.

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