Happy New Year! Make this the year you get rid of all that debt.
Are Payday Loans a Good Option for Fast Cash
December 20, 2011 | Author: Corey
There are times when you just have to have cash and quickly. Credit cards are great for those every day purchases but what if you require cash and you require it in a hurry? Instant approval payday loans are one option. But be warned they are an expensive option.
You could ask for a cash advance on your credit card, but some cards have a limit on how much and how often you can get an advance. And of course you pay a processing fee, cash advance fee and interest fees. And you may not have enough available credit to get a cash advance.
Pawning valuables is another alternative. You’ll get the cash quickly but you won’t have the use of whatever valuable you’re pawning and you’ll only get less than 10% of the value of the asset. If you have a watch that retails at $5,000, you may only get $150 in cash. If you don’t pay pack the $150.00 plus interest in the time period allowed, usually 90 days, you forfeit the watch.
Another alternative is a payday advance loan. This works if you have a steady job with a reliable paycheck. There’s a quick application process, sometimes online. You do have to pay interest and a processing fee. The money is transferred to your bank account almost immediately. When you get your paycheck you pay the advance back.
The problem with payday loans is that you have to pay the money back in a short amount of time. If you don’t have the $250 you borrowed today where are you going to get it in two weeks when it’s due? So you pay another application fee and roll over the loan for another two weeks. The application fee may seem minimal, maybe only 10% of the loan amount, but that’s $25 on our example. If you have to keep rolling the loan over for 6 weeks, you’ve just paid $75 to borrow $250 for 8 weeks. If you don’t pay the money back for 6 months you would have paid $300 plus you’d still have to pay the $250 back. Plus of course you have to pay the interest owed, which most likely will be as high as your state’s usury laws allow.
You’re probably telling yourself that you’ll just not pay the additional processing fee and pay the loan back when you can. Unfortunately the lender will require your bank account number and permission from you to electronically debt your bank account automatically for the processing fee and loan, if you don’t pay pack the loan in time. Other lenders require that you write a check for the loan amount, interest and processing fee and post date it to when the loan is due. If you don’t have the money in your account and the check is returned for insufficient funds you are liable for returned check fees.
Payday loans should be a last resort, it’s easy to end up owing $1000 for borrowing $250.
As with any loan or credit option use it wisely. You don’t want to get stuck always having to use a pay day loan because you’re short of cash.
Do You Need a Personal Loans And You Have Bad Credit
December 10, 2011 | Author: Corey
Do you need a personal loan despite a bad credit score? You can get a bad credit personal loan if you know what to offer lenders and where to look for one. Many people having bad credit still need to borrow for emergencies or necessary repairs. Banks know they have a market for more expensive loan products and that’s what they offer those with bad credit.
Bad credit personal loans can be pretty painful. The interest rate is high with high late fees. There may be a prepayment penalty, which means if the loan is paid off early, the bank will demand a payment of the lost interest as well as the entire principal balance. And, there will most likely be a demand for collateral, an asset you own such as your car or house, since an unsecured loan puts the bank in a very precarious position. Still, there are ways to borrow money even with bad credit.
Don’t get a loan without a specific purpose for the money. It’s too easy to spend the entire loan amount on impulse purchases. If you don’t really need the cash for a specific reason, you might hold off until you have rebuilt your credit and can get better interest rates and terms from a bank. Using the loan for debt consolidation is always a good reason, but only if you then close the credit cards or other debts that the loan pays off – instead of just adding more to your debt burden!
Before you start applying for loans, find the best lender with the most favorable terms. You’ll want to look at the fine print too. Ask about these fees and charges:
Are you paying an up front application fee or processing fee? Is there a fee to pull your credit?
What is the interest rate? What is the APR (annual percentage rate)? Are they significantly different?
Do you have to provide collateral for this loan, or is it unsecured? (How bad your credit is may determine whether the lender needs security or not.)
How long until I have a decision? How long until you disburse the loan funds?
If you turn me down, do you have a related company that can do the loan?
Don’t just consider the monthly payment, because many hidden fees and charges can be included. Make sure you compare all loan products before you apply with any particular lender – each time you apply for a loan, you will impact your credit score, so keep it to a minimum!
If you get turned down for unsecured credit, you might want to take a month or two and take steps to improve your credit. You can take steps that show results within just couple months.
What Is FICO and How Is Your Credit Report Affected
November 20, 2011 | Author: Corey
The acronym FICO is an abbreviation of Fair Isaac & Company, the business which invented this mathematical calculation, during the end of the 1950′s. It is the credit model used to determine your credit score and reflects your dependability as a debtor. The term “FICO score” is the same thing as a credit score. While there’s no mystery about what FICO is, exactly how the score is calculated is kept a secret. Only FICO and the three major credit bureaus know exactly what goes into it.
You can get your credit report from each of the three major bureaus at no charge. It’s complimentary, but you’ll only receive the report, you have to pay to find out the score. The FICO score is based on several factors. These include: late payments, missing payments, number of open accounts, length of one’s overall credit history, actual amount of available credit used and negative occurrences such as charge-offs and bankruptcy.
There are also points deducted for how many times your credit report is accessed by someone other than yourself. If you’re looking for a loan don’t apply at several different companies at once, because they’ll each look at your report. Each time they look it increases the possibility your score will drop a point or two.
Points are given for each of these factors, after which a credit score is computed. To a certain extent, each credit bureau has the leeway to base their scores on their own criteria. That’s why each one can come up with a different score. No one except Fair Isaac and the three major credit bureaus know how this is done. The Federal Trade Commission has ruled against this information becoming public knowledge.
What isn’t included in your credit score might surprise you. Your assets aren’t included. How much money you have in the bank, if you own any stocks or if you have a retirement plan has no effect. That’s because the score is based on how you handle your credit not how wealthy you are. Someone with few assets but who is diligent about paying their debts may have a much higher score than someone who is wealthy but doesn’t pay his debts.
What does this mean to you? It means you need to do all that you can to build a positive credit history. Negative credit cannot be magically erased overnight. The lower your FICO score, the harder it will be to obtain the credit that you need. The loans you do obtain will be at higher interest rates with stiffer penalties. In many cases, it can take years to recover from a financial crisis and a bad credit score.