Payday Loan – Remember, They Are Short Term Loans

Payday Loans are other wise called cash advances or paycheck advance loans. The amount is small ranging from $50 to $500, and the term is about two weeks. The interest rate is high for a payday loan. People who are in urgent need of money turn to the loan as the last resort, when they cannot trust the credit card or friends to raise some money.

You need not have a good credit history for being eligible for this loan, and the processing is very quick. You can procure the loan on telephone or Internet, and within 24 hours the money gets deposited in your account. It is hassle free and has no up-front cost, and no third person is involved.

The disadvantage of the loan is the high rate of interest, and it is important that you repay the loan by due date. The loan can be renewed, but you have to keep in mind that by the third renewal the renewal charges and APR is more than half of the loan amount, and by this rolling over the position of your finances further deteriorates. The US government too is concerned about these borrowers belonging to the lower and lower middle class, who run out of cash by the middle of the month once their bills are paid, and who are pulled into this cycle of debt due to some sudden expenditure incurred on account of a hospital visit or unplanned travel.

However, for someone with bad credit history and who cannot manage any other kind of loan, the payday loan is the only solution. It is only wise to use the money to meet the requirement and pay back the loan on time, and if possible set aside some money every month, and put together a crisis fund.

You can get a payday loan at any loan outlet and in case you do not find one in your neighborhood there is always the Internet, where the loan is just a click away. Generally such lending agencies stay open beyond the normal working hours, keeping in view the situations that force people to look for emergency funds. Therefore such agencies provide service to even those, whose money being in the form of term deposits, certificates or gold is not readily accessible.

Due to the speed in service, convenient locations and operating hours these loan companies are the favorite choice of the average working man who decides to go for the deal anyway. Because even after weighing the pros and cons, the decision of the borrower depends ultimately the gravity of the situation and his need.

Such cash advances are sometimes given against checks dated for the subsequent payday or sometimes against collateral like furniture. It is not advisable to jump for such an offer without paying attention to the other costs associated with it. When a friend or relative does not come to your aid with a hand loan and help you tide over, borrowing money from a loan company is the next available option, though the legitimacy of the company has to be checked. If possible browse the net for information regarding the company and cross verify the details provided like phone numbers, to avoid being cheated. The best way however is to consult those who already have used the services of the company.

Beware of companies that demand an advance fee, and also be discreet about your bank details. Though the interest of the payday loan is much higher than that of a credit card, the fact remains that those who bank on this kind of loan might have been refused credit cards in the first place, and the unemployed are not easily trusted with loans. If you have decided to get yourself a payday loan, be resolved that you shall avoid rolling over, and that you will manage your finances better in future.

A payday loan is cash advance offered sometimes against the next paycheck to help you tide over until the next pay day, and is a small, short term, high interest loan.


How Getting Car Loans After Bankruptcy Is A Real Possibility

Declaring bankruptcy is traditionally seen as the surest way to convince lenders to steer clear. But the idea that it ends any hopes of securing a future loan is not quite right, and even before the usual 2-year term of the bankruptcy ends, there are options. Getting a car loan after bankruptcy, for example, is not that difficult.

As with all financial matters, there are conditions and criteria to satisfy before approval can be granted, but the fact remains that an opportunity to buy a new car is available to bankruptees. But what is needed in order to secure loan approval despite bankruptcy?

Well, the lenders are obviously accepting a higher degree of risk than usual, so there are some special conditions involved, as well as higher interest rates. But the car loan can be secured as long as the affordability factor is proven and a means of repaying the loan is assured.

Proving Affordability

Whenever someone applies for a loan, the lender is always more interested in establishing that the repayments are affordable to them than what their credit history is like. There are 2 parts to establishing affordability: the income and the debt-to-income ratio of the applicant. Getting a car loan after bankruptcy depends to these matters too.

Income relates to employment, and applicants must have a full-time job before they will be considered for approval despite bankruptcy. The income itself needs to be sufficient too, but the employment stability is perhaps more important. So, recently hired people (within 3 months) are likely to be overlooked.

The debt-to-income ratio relates to excess income, or the existing monthly expenditure compared to the monthly income. The ratio stipulates a maximum 40% of income be spent on debt repayment, so the car loan repayments must fall within a tight limit. If it does not, then the application will be rejected.

Finding The Best Deal

Admittedly, not every lender is willing to grant loans to recent bankruptees, and many of those that do fail to offer affordable terms charge interest rates that are very high, or have loan limits that are very low. However, online lenders tend to cater to the niche, and chiefly offer affordable car loans after bankruptcy.

Of course, we can rule out securing a new Porsche, as the scope of any such loan has to be confined to what is not going to cause major financial pressure. But it is not unreasonable to expect to get approval, despite bankruptcy, on a loan of $20,000, if the repayments are within budget.

But while online lenders may offer attractive deals, be sure to read the small print in any car loan contract before signing it. And check out the reputation of the lender on either the BBB website or through the Verify1st security tool.

Helping To Get Approved

Getting a car loan after bankruptcy is an opportunity to rebuild your credit reputation, so there can be a certain amount of pressure to secure approval. There are a few things to do, to help that cause.

The most practical is to include a cosigner in the application – someone who is willing to act as guarantor for the loan. The lender will be happy with the extra security on the loan, and will lower the interest rate. However, they will only accept the nominated cosigner if he has an excellent credit history and a large income.

Another way to help secure loan approval despite bankruptcy is to offer a down payment on the car. This effectively means that the size of the car loan is reduced. A 20% down payment on a $15,000 car would lower the required loan to $12,000.