Payday Loan Debt Keeps the Poor Paying More
Payday loan debt is keeping the poor poorer. What most experts already know keeps being validated time and again. Payday loan debt is a near-endless cycle of paying fees to keep a loan from defaulting. But that only keeps the loan from going into collections. It doesn’t even touch the principal or interest. And that means paying fees over and over again to keep a loan current–something that essentially makes borrowers spin their wheels.
Why Payday Loan Debt Mostly Affects the Poor
One reason payday loan debt is so prominent among the lowest wage earners is that is who lenders target. With in-depth market research and advertising analysis, cash advance lenders in Florida near you go straight for the people who can’t qualify for traditional loans and credit lines. But these are the same consumers who can least afford these loans:
“Marketed towards low-income demographics, the loans build a clientele on recycled debt rather than a long-term positive impact. Repeat borrowers make up 98% of payday loan volume. ” –The Florida Times-Union
Here’s how payday loan debt works against the borrower. Take out a $200 payday loan and pay on-average $30 in interest or $15 for each $100 borrowed. Now, the cash given to a borrower is typically less than the amount approved. After fees, the borrower gets $185. In two weeks, the borrower has to either repay $230 or pay a $30 service charge to extend their loan. But the principal and interest remain. Every time a loan is extended, it costs another $30. Figuring it as an annual percentage rate, that comes to 391 percent or $780.
How to Get Out of Payday Loan Debt
By far, the most preferable way to get out of payday loan debt is to stop borrowing, stop extending loans and just pay them off with cash. By taking on more hours at work, freelancing on the side or even selling some personal possessions, all can be ways out of payday loan debt.
Another way is to enter a payday loan consolidation agreement with a professional firm. The firm then negotiates with your creditors and you only have to make small monthly payments. It takes the pressure off and makes it affordable to get out of debt and stay debt free.
What is a Payday Loan Extended Payment Plan?
An extended payment plan is an option lenders give cash advance borrowers when borrowers can’t afford to repay their loans on-time and in-full. An EPP, or extended payment plan lets borrowers repay their cash advance loans over four installments and does not add any more fees or interest to the loan. But getting onto an extended payment plan isn’t easy. What’s more, even borrowers who qualify will be dropped from the program if they do not make one installment payment on-time.
How an Extended Payment Plan Works
EPPs are based on certain criteria. Only qualified borrowers can get onto an extended payment plan and once on it, must meet all the obligations. Here’s how the typical extended payment plan works. A borrower who has taken out a payday loan knows he or she won’t be able to repay their cash advance on-time and in one lump sum. The borrower requests his or her lender to be put on an EPP. If the borrower qualifies, he or she will make four payments, usually in equal portions, repaying his or her loan. The lender cannot add any more fees or interest to loans being repaid through an extended payment plan https://www.usaloansnearme.com/.
Qualifying for an Extended Payment Plan
EPPs are given out to borrowers who are not in default on any other loans and cannot be even one day late on their outstanding payday loan. Lenders must be a valid member of the Community Financial Services Association of America or CFSA. And borrowers must ask to be put onto an extended payment plan, lenders will not offer it on their own. In addition, the borrower must make their request in the same way they got their loan, in-person or online and must make said request before the close of business on the day before their loan is due.
Many borrowers won’t be eligible to get on an extended payment plan. Rather than ignoring the debt or filing for bankruptcy, borrowers struggling with payday loan debt can find relief through a payday loan consolidation plan. These plans give borrowers the option to make small monthly payments until they are debt free.…
Start saving now
One of the biggest mistakes you can make as a young person is to think that you can’t afford to save money. The reality is you can’t afford not to, and the sooner you start saving, the better!
Most people aren’t aware how much they spend on frivolous items every day! If you don’t think you have money in your budget to begin saving right now, then I have a challenge for you.
For one week, write down everything you spend money on, and I mean everything! At the end of the week, review the purchases you’ve made. The results will be a big eye opener!
Saving money isn’t rocket science! It’s about changing your spending habits, reducing impulse purchases and finding ways to enjoy life at a fraction of the cost. I can think of 3 quick examples of how to save money right off the bat – Instead of stopping for coffee at Starbucks each morning, take a cup that you’ve brewed at home; Brown-bag it to work instead of buying food from the deli; Have movie nights at home instead of spending the insane amount of money it costs to take the family out. By adopting these habits, you’ll have money available for saving.
One of the first things you should consider is a 401(k), a retirement savings plan. If you can contribute through your employer, then do so, particularly if they match your contributions.
As a parent, your best bet is to invest in your child’s education with a 529 tax-advantaged savings plan. The money in these plans is invested in assets that become safer and more liquid as your child approaches college age.
Whatever you decide, it’s important to remember to stay invested for the long term and be aware of investment costs. The lower you pay to the agent of the investment, the more there will be for you!
Saving money takes discipline, but you’ll thank yourself down the road when you see the rewards and if an online cash advance or even is not available to you, by having the money saved you will no longer need to draw upon this kind of borrowing.…
Mystery of the loans unraveled
Business loans for entrepreneurs and single women to start small-scale industries and commercial micro level trades boost up the morale of the downtrodden in the community. These are development aspects of the community and hence there are no high interests rates collected for these sorts of loans. Personal loans are the one, which are more familiar to us as you receive whole heap of messages and calls in a day to avail one or the other of its kind from various providers.
Personal loans are primarily targeted on the working class and the salaried individuals. The maximum aspirations of the working sector are in a majority to obtain a property on their own as soon as possible in their career. A good means of flimsy vehicle to display their prosperity and well-being to the society and community to which they belong. It is all made possible through these personal loans.
While acquiring money these ways you should promptly see to the fact that you are obtaining them from the right place for right interest rates and for right terms and conditions as well. There are numerous offers and discounts plans that are being announced by all those banks and similar kinds of providers. They do it to cut the competition in the middle ways.
Slashing prices and cutthroat models of business and personal payday loans plans to the customers are being designed by top-notch minds in the field. They are specially targeted on the working class group and you need to very cautious in choosing the right kind. All those attractive sales pitches from chick women and smart class men might deceive you to assume things based on pure hype.
It is always advisable to have an experienced consultant in the financial sector to advise you on each single aspect of the contract terms and conditions when you acquire a loan from a bank. It is good if they could suggest you the best plans that would fit you as well. The rates of interests should be nominal and you need to watch out for the compound interests.
These are dangerous baits, which look attractive to grab the loans in the early hours. Effective planning based on the fixed income that is assured would keep your away from hassles in the future. You could obtain quotes request from the banks individually as well as from the dedicated websites, which give you a comparative analysis of all the current active providers in the market.
Study and research the good prospects. Inquire and consult the experienced in the trade. Friends kith and kin and colleagues could be good sources of advice and help otherwise to avoid loans as well.…
Interesting features about personal finance
Personal finance is an important aspect of a person’s life. It does not matter whether you are rich or poor. If you earn money through one way or another, then, you need to have a look at your expenditure, assets and savings and, some might intimate, try to avoid unsecured loans, secured loans or indeed, payday loans. Financial planning is a key aspect of personal finance. Right now, there are many economic problems in the world. Because of this, many people have lost their jobs, leaving them without any income for months. Among this category of people, some people still manage to meet their monthly expenditure by spending their hard-earned savings.
Others have resorted to using their credit cards as a temporary measure while waiting for a job. Normally, it takes a period of six months to find another job after being laid off or quitting a job. Nevertheless, due to the current economic condition, finding a job is taking longer than expected.
In the case of those who are using their savings, they are able to do so due to proper personal financial planning. Many financial experts around the world advise income earners especially those with dependents to maintain an emergency fund. Such a fund should contain money for monthly expenditure of at least six months. So, if there is an emergency as in the case of being laid off, the fund can be utilized while waiting for a proper job. For those who use credit cards to meet their monthly expenditure, it is not a wise move. The interest charges for credit cards are classified as compound interest rates. So, you may end up paying a great deal of money purely for interest.
In short, financial planning is a key aspect of personal finance. If you have not set up an emergency fund for you and your family, it is high time that you consider doing so. In the event that you are laid off for any reason, you can use the money from the fund to meet the required monthly expenditure.…
Resolve your debt problems now
Regardless of your financial position, you must always have to contend with potential debt problems. Getting in debt is something that you cannot avoid. In fact, this has become second nature to a lot of people. Those splurges of the past years and the irresistibly low rates of interest have driven us to excesses in our credit load and over reliance on payday loans and other unsecured credit options. We spent on a lot of things like there is no more tomorrow and with total disregard on how we intend to settle our mounting debts.
The boom in consumer spending may have been one of the best things that could have ever happened to USA economy. However, this wayward consumer spending could have actually reached its tipping point and we are now faced with the stark reality of tenuous financial position weighed down by an overblown debt to equity ratio of USA consumers. All of a sudden, consumer spending has been stopped by the proverbial brick wall.
Majority of USA consumers will have to face the time of reckoning of all those reckless spending and poor management of personal finances. When you come to a point that you consider your credit card as a regular financial tool, you are in effect pulling yourself closer to your own financial sinkhole and all these excesses will have far-reaching implications.
It is now the time for you to face the music and deal with your debt problems before the situation gets worse. This means that you have to make a long term plan to pay off your debts when you still have a secured job. Establish your priorities and come up with a timetable of about 3 to 5 years to sort out financial obligations. Look for opportunities to settle short term loans and credit card dues. You must also explore the possibility of prepayments. Don’t wait for the time when your financial position becomes tight before you make your move. The best time to sort out your debt problems is when you have sufficient liquidity.
So, how do you start solving your debt problem?
You must begin solving your debt problem by taking a careful look at your spending behavior. Your debt reduction efforts will be rendered ineffectual if you don’t put a cap to your expenses. You will end up getting more loans than you can settle if you don’t properly manage your expenses. You start off by making a list of all your expenses. Keep track of your expenses and make sure that you know where your money goes each month.
Categorize the expense items and determine which ones you can do without. You will discover that there are actually a lot of things that you are spending on which are unnecessary. Once you get your priorities straighten out, you will be learn how to properly allocate your budget so that you are able to use your financial resources only on the most important items.
Dealing with your debt problems does not only involve paying off your loans to lessen your credit load. A critical aspect of your task will require a total management approach that will help you control your spending.…