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

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.…

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.…