According to CareerBuilder.com, a whopping 61% of American households lived paycheck to paycheck in 2009. That number is huge, especially since only 49% lived that way in 2008, and only 41% in 2007. Whether it is due to losing one or both household incomes or simply a reduction in the household incomes, the statistic is staggering. With families not able to adequately save for any unexpected expense that may arise, they are finding that more often than not there is more month than money. So what happens when the rent/mortgage payment is due, groceries need to be purchased, and then the car breaks down? For some, a small personal loan at a local bank is all it takes to get back on track. For many though, this isn’t an option, and they only place they have to turn is payday lending, which may sound like a good idea up front, but in the long run can sink you deeper than you were before.
What is a Payday Loan?
At its simplest, a payday loan is simply a small, short-term loan meant to cover the borrower’s expenses until their next payday. They have many different names: paycheck advance, payday advance, and cash advances are the most popular when referring to payday loans, but the basic concept is the same. The borrower visits the payday lending store, secures the loan – $500 is the average loan – by providing proof of income, their Social Security Number (SSN), recent bank statements, and other personal information, and writes a post-dated check to the lender for the amount of the loan plus all loan fees.
That sounds pretty good, right? Go in, apply, leave with money the same day; what could be better? A lot. For starters, on the maturity date of the loan – usually within two weeks after the loan is approved – the borrow...
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...han one loan at a time, and don’t use a payday loan for everyday expenses, to pay down credit card debt, to pay off another payday loan, or to try and solve a long-term financial challenge. Payday loans are meant to be used for emergencies, not to fund your shoe fetish or video game habit.
Payday Lending: The Bottom Line
Although payday loans walk a fine line between beneficial and detrimental to your financial health, by being a responsible borrower you can avoid the payday loan roll-over cycle. Know the laws regarding payday lending in your state. Be sure you know the terms and repayment schedules of the loan, and only borrow what you know you can afford to pay back. Only use them as a last resort after exhausting all other possible options. But better yet – avoid payday loans altogether, try to live within your means as best you can, and save, save, save!
Payday Lending (sometimes called cash advance): The borrower uses a post-dated check or electronic checking account information as collateral for a short-term loan. Borrowers need only personal identification, a checking account, and income to qualify.
breadwinners of the family and rely on little assistance from others to make ends meet. Paycheck
I 'm warning you that this will require a change in your behavior. Using this method is powerful, but it means that you won 't be able to buy new clothes, tools, or toys whenever you want. It also means that you will be moving quickly towards a debt-free life where you don 't have to feel guilty and stressed about how much money you owe.
Applying for a credit card or personal loan has never been easier or faster. A myriad of financial products are available for all types of clients and all kinds of purposes. Terms and conditions are even becoming more and more flexible. How to decide whether a credit card is needed? How to handle a card? How to settle a loan? How to spend a loan? How to spend a car loan on a car, whose price is relatively reasonable compared to one’s pay? Is a loan the good sourcing tool to purchase a very expensive? These are all questions, which require a minimal to reasonable level of financial literacy.
Scott Gilmore's “Me, The Other Scott, And payday-loans” is an educational paper based on Gilmore's experience with financial fraud, the stresses of Payday Loans and the stigma behind people who use payday- loans. Payday-loans can be a lifesaver in a pinch, but could metaphorically kill you in the long run. Additionally, payday-loans target the financially unstable and people in less appealing urban areas because they assume they are the ones who need the loans. In my opinion, it is unfair to label someone using payday-loans as poor. Gilmore supports this point as he states, “these are respectable people with jobs facing unexpected car repair, or running too short to buy back to school supplies”. The reality is not
Many Americans are seeking an ideal presidential candidate for our next election; furthermore, many college students seek a candidate that has their best interest in mind, leading many to focus on Bernie Sanders and his ideas for an affordable education system. In the article, The Myth of the Student Loan Crisis, Nicole Allan and Derek Thomas focus the article on the risky investments of college and questioning the rising debt levels as a national crisis. While Allan and Davis claim the risk of college and mention rising debt levels as a national crisis; however, Allan and Davis use charts to support their stance while avoiding the issues Americans need to focus on, such as the rising cost of college, “justifiable debt”, and the cost of those not contributing to society.
Let me tell you something about Payday these are the loans which will be approved within very short time called just within one hour.
Melzer, B. T. (2011) The real cost of credit access: Evidence from the payday lending market. The Quarterly Journal of Economics.
Let’s face it! Loaning companies will try to scam you out of every penny they can get. They don’t care about your education, or how big of a salary you are going to have. Instead of you, these companies care about their wallets and how
I. Main Point 2: It is important to pay your credit card balance off every month. If you do
Here you are going to find out what you are doing wrong that is sending you into a debt spiral, and surprising, for the first time on the Internet, you are going to read advice that doesn’t include “Make a budget and stick to it.”
Micro-loaning is designed to break the cycle of poverty by allowing low income residents access to outside funds, which they were previously restricted from. These funds give the opportunity to participate in investments, such as small businesses, and create a steady flow of income. Micro-loaning provides financial services for those who might have low or no income, as well as not having the official documents required when applying for a regular loan. With the goal of low interest and easy application, micro-loaning appears to the most efficient, alternative way of alleviating poverty. To help gain a better understanding of micro-loaning; we will explore the micro-finance history and its organization, poverty and the target subject of this organization, and the benefits and backfires of providing these services.
Having revolving credit is another reason why people fall into debt. “Revolving credit is the credit, available on credit cards” (US Personal). “Th...
...ower to wait a year or before to start to make the repayment. Somehow, some loans can be repaid at the end of the period instead of instalments. Besides, security, for example some assets and the properties of the business, is needed for the bank loan. There are three advantages in the bank loan. First, the timing and the amount of the repayment is known when getting the bank loan, so it is quite easy to budget. Second, there is also a repayment holiday, so the repayment schedule is quite flexibility. Third, the interest rates can be discussed and it can be lower than the overdraft. However, it is because the business loan is a long-term commitment, which is needed to service and this will be to high interest rate. Besides, security such as the house of the business owner is needed and this will not be good to the owner if the business is failed. (Cox, Fardon, 2009)
An important term that is cropping up everywhere nowadays is “Microfinance”. It is important for every person interested in the field of finance to be aware of this term, as in the coming days Microfinance is expected to be one of the brightest and the most appealing sector of the Indian Economy.