Month: November 2018

What should you consider when applying for a payday loan?

Payday loans require minimal qualifications and are quick and easy to access. For this reason, we apply for the loans without a second thought. Payday loans may be helpful, but just like any other loan you should understand the terms before applying for one.  It is important to have all the information about the loan to prevent any fallbacks.  Some of the things you should consider before taking the loan are;

What is the purpose of taking the loan?  If you are taking a loan, you need to question the reasons why you need it.  Payday lenders made the loans available for people with short-term financial crisis. Some legitimate reasons to take the loan include bills, minor accidents, unexpected job loss and anything that falls under financial emergencies.

If your reasons are valid, calculate the amount of money you need to borrow.  Even though payday lenders offer a loan limit, you should only borrow what you need. Calculate how much you need to use for the emergency and borrow the exact amount. If you are tempted to borrow a higher amount to take care of other finances, question the purpose to ensure they are urgent and legitimate.  Payday loans are expensive and you want to ensure you borrow only what you need.

Understand the payment options before you apply for the loans. Payday loans are easy to get but difficult to pay back. They have interest rates that accumulate almost immediately. Payment methods are different with each payday company. Some companies want their money repaid at the end of two weeks while other may take up to three months. Select a payment method which won’t leave you struggling to meet other commitments.

Most of us forget to read the terms and conditions before taking out any form of loans. To avoid any future misunderstandings with them, read and understand the terms and conditions every time you want to take out a loan. This should not be a one-time thing. The terms are a set of rules for the lender and borrower. Lenders may regularly change their terms to meet their needs and those of their clients.

You should know the risks involved in taking a pay day loan. Lenders are not concerned about bad credits and existing loans when they approve your payday loan request.  The risks involved in these situations do not befall them. When you take out a payday loan and give later repayment, your credit score may be affected and you lose the ability to borrow loans from conventional lenders.

The website you are borrowing from should be secured and the lenders should have a license. License ensures the lenders operate under government laws while a secured website is proof that you are borrowing from a legitimate company.  Scammers use unsecure websites to trick individuals out of their money or information.  Companies that do not operate under a license are illegal and tend to have their own regulations that profit them and take advantage of you.

Once you have considered all these factors, make the decision that suits you best.  Remember to be strict about where you borrow your money from and pay back your loans on time to enjoy the positive services of the payday loan.

Categories: Pay Day Loans

The risks involved with payday loans

Taking a payday loan is like requesting for an advance except with a payday loan, you will pay back the loan with interest. People like the idea of payday loans because they are convenient, fast and require minimal qualifications to obtain. Even though payday loans have saved many during financial crisis, they have destroyed a substantial number others ‘of financial health. Some people don’t seem to be moved by this thought but you can protect yourself by learning the risks that come with payday loans and how to avoid them

With payday comes the risk of taking more loans to pay existing loans. Imagine you have a credit card loan, or maybe took a loan from a friend or colleague, the due date is almost here but you don’t have any funds to pay them back. Conventional loans can be hard to obtain because they take long and require a high qualification level so you settle for a payday loan because they are instant convenient and require minimal qualification. You pay the loan with your payday loan.

The more you pay loans with other loans the more you risk creating a debt cycle and getting yourself deeper into dept. If your income is committed to paying loans, it will hard to live through to the next paycheck so essentially you would have to borrow a loan to survive. This cycle is hard to get out of.

When you register to a payday website, there is a high chance you may be providing your information to fraudulent lenders and scammers. Online businesses are known to have the highest number of scammers. People have created websites which they use to scam unsuspecting people. They collect your information and it for subscriptions and identity theft. Some scammers pose as your payday loan lenders and call may call you to demand for payments. Fraudulent lenders have unlicensed payday websites where they impose excessive interest rates on loan borrowers. You should think twice and investigate before feeding your information to online webs.

The risks involved in taking these loans are enough to cripple your financial health. For starters, the interest rates on payday loans are too high, especially for a short-term loan. Conventional loans are long term but they have cheaper interest rates. The interest rates on payday loans are imposed as soon as you get the loan. When you don’t pay the loan on time, interest rates will increase until you pay it fully.

When you don’t pay your loan on time, you risk your credit card report. Payday loans do not reflect directly on your credit card so how is this possible?  If you don’t pay your loans on time, your debt will appear on your bank statement and the lender may report this to the credit bureau depending on their terms.  Either way, the unpaid loans will appear on your credit card report as bad credit. With bad credits, it will be hard for you to receive traditional loans.  Insurance companies will charge you more and you may get less job opportunities if you have bad credit reports.

The risks surrounding a payday loan are high, always avoid payday loan if you are not in any financial emergency.  If you take the loan, take measures to avoid the repercussions.

Categories: Pay Day Loans

Pros and cons of payday loans

Payday loans are a common emergency loan for most people. Their convenience and easy access makes them convenient for most people. People prefer payday loans to other form of loans because its uses are not restricted and you can use them for any financial emergency. Before applying for a payday loan you should educate yourself on the benefits and repercussions of borrowing this type of loan. Below are some of them

The advantages

Pay day loan applications are approved almost instantly. The process is quick and simple. You won’t spend a lot of time online filling long firms like in traditional loans. The best payday sites disperse the funds within minutes while the slow one take up to two days which is still faster than conventional loans.

The whole process of application and registration is doe through online pay day sites.  Unlike in banks, you won’t need to make appointments and travel for hours only to stand in long lines and fill long forms.  Payday loans are very convenient all you do is register online and you are good to go. When your loan request is approved, the money is sent to your bank account and you can withdraw over the counter or through ATM. The money from payday loans has no use restrictions

All you require to set up a payday loan account is a legitimate Identification card to prove that you are 18 and above and a registered bank, account where they can withdraw and accredit the loans.  Strict payday lenders ask to see a paycheck before they can approve any loans. As long as you can prove you have a consistent income, you are guaranteed to get a loan.

When you pay back a payday loan early or before the deadline, you qualify for a higher loan automatically. The more you borrow and comply with the payment rules, the higher the loan limit becomes.

The disadvantages

Payday loans are very expensive compared to other loans. The interest rates on payday loans are very high. The interest amount is imposed on the loan as soon as you receive it.

Most lenders have repayment deadline of between 2 weeks to three months. If you don’t pay your loans on time you can face major issues. For one, when you don’t meet the deadline, interest rates start increasing subsequently until you pay the whole loan off.

Payday loans may affect your credit card report. They are not directly linked to credit cards but their transactions can be found on bank statements.  Credit card lenders can sometimes link your bank statement to your credit card statement. This way when you have late payday loan payments, it will also reflect on your credit card. The more you delay the payment, the worse the report gets consequently ruining your chances for getting bank loans.

They are easily addictive, once you pay your loan and the limit increases, nothing will prevent you from taking the loan to increase your next limit.

 

Payday loans can be very convenient if you need money for a financial emergency. If you can manage without the loan, you should avoid it at all cost by taking better alternatives.

Categories: Pay Day Loans

How to detect payday fraud

Payday has become the most popular way for people to borrow loans from lenders. It is accessible through the internet which makes it and the people using it vulnerable to scammers, fraudsters and identity thieves. The last thing we need is losing money over the internet when we did not even have any to begin with. Imagine taking a loan and paying it back only to realise you paid the money to the wrong person.

The following are common payday scams you should watch out for

Watch out for lenders asking for up-front fees first before they provide service.  Some people create fake online pay day accounts and pose as payday lenders.  Unsuspecting people register to these types of accounts. These fake lenders guarantee to give you big loans with minimal interest only if you pay registration and interest fees. They ask you to send money though non-reversible payment methods such as wireless transfers and gift cards. After they receive the money, you not hear from them again. Legal payday lenders do not charge any form of fee before giving loans. If you come across such website you should steer clear.

Block and report those payday loan sites with long detailed forms that ask for too much information. Some sites ask you to fill out long detailed forms concerning you personal, social and financial and work life in order to register with their company. In the real sense, these are scammers trying to collect all your information. They use this information to steal from you or steal your identity. Once the scammer has you bank account information they either try to withdraw all your money, or enrol you to a paying membership programme.  Avoid filling online forms without questioning the legitimacy of the company

A common payday scam is the debt collector call. You may receive a call from an individual claiming to work for the company where you have a loan.  Somehow, this person has all your information and they threaten to call the police on you for not paying the loan. For fear of being arrested you pay the loans directly and later on find out you have been scammed.  Double check the information on the website and report any suspicious numbers calling you about your loan. Check with your payday lenders before dispersing any form of payments

Scammers have unsecured websites that lack a physical address. Don’t just visit any payday website to ask for loans, check if the websites have security certificates. All you have to do is check for the https in their address.  Genuine lenders make sure their websites and the information of their potential customers are safe when using their websites.  Check if the website has any contacts or physical addresses.  Scammers always withdraw their information from the websites because they don’t want to be tracked. Call the contact provided or visit the physical address before creating an account, filling in your details or borrowing from them.

When you go on a payday site, the first thing you check out should be the license.  Genuine businesses require registration and follow through with government regulations. Unregistered payday lenders are either trying to scam you out of your money or trying to avoid government regulations.

Categories: Pay Day Loans

A comparison between personal loans and payday loans

Sometimes you may need immediate access to more money for emergency reasons.  You may need to pay off some urgent bills or buy something that you need urgently.  You may find yourself searching for coins in your coin box or pockets, and at the end of it, taking an online payday loan. There are other ways to obtain loans but they are more conventional and do not work like payday. Let’s see how personal and payday loans differ, which one is worth the risk?

Personal loans

When you receive personal loans, you sign an agreement with the lender to make payments over a number of years. The payments can be monthly or yearly depending on the terms of the lender. Most lenders impose the payments on your income so the payments can be deducted before you get access to your full income.

You can use the loan however you wish. Whether it is for personal use or business investment, the loan is not restricted to any specific functions. There are strict requirements put in place for people who want to receive personal loans. Usually lenders carry out a thorough screening before they approve loan requests. It can take weeks or months before you get an approval form a lender. Access to application of personal loans is limited to weekday working hours.

Before you get a personal loan, most lenders will check your credit score. If you have a bad credit score, the lender is less likely to approve your loan. If you get a loan, it will be lower than the amount you expected and the lender will impose high interest rates.

Paying the loan on fixed rates, such as monthly makes the loan repayment easier. With a good payment plan, you will clear the loan in no time.

A pay day loan

Pay day loans are short-term loans meant to be paid between two weeks and three months. The payment depends on the lenders terms. You can choose to pay the lone fully or in instalments, as long as the payments are within the expiry dates.

Pay day loans are convenient for immediate financial emergencies. When you request a payday loan, you receive the money almost immediately or within 24 hours.  The requirements to receive a pay day loan include an identification card, a bank account and proof of regular income.

Payday loans come with very higher interest rates compared to all other forms of loans. When you receive a payday loan, immediate interest is employed on the loan.

Getting a payday loan is quick, convenient and almost everybody is eligible for a loan.  You can easily access the money even with a poor credit record. The payday records do not appear on your credit card record buy they may appear on your bank account record.  If credit companies have access to these records they may include them in your credits. In this case when you make payments on time, your record becomes better but if you miss payments regularly you ruin your credit records.

 

Both types of loans can be helpful depending on your intention and situation. Personal loans are convenient for big purchases while payday loans can be helpful when you need quick cash.

Categories: Pay Day Loans