Home - Mortgage Loans | Personal Loans | Bad Debt Loans | Foreclosure Loans
Apply for a Loan | Best Auto Loans | Best Bad Credit Auto Loans | Best Bad Credit Loans | Best Bill Consolidation Loans | Best Cash Advance Loans | Best Credit Cards | Best Credit Repair Tips | Best Debt Consolidation Loans | Best Free Credit Reporting Tips | Best Home Equity Loans | Best Mortgage Loans | Best Pay Day Loans | Best Personal Loans | Best Products on the Internet | Best Unsecured Loans
Great Financial Advice
Apply for a Loan
Latest Financial News
Rate Lock Advisory
Best Products
Join Our Mailing List
Contact Us
Loan Articles Index
Auto Loans
Bad Credit Auto Loans
Bad Credit Loans
Bill Consolidation Loans
Cash Advance Loans
Credit Cards
Credit Repair Tips
Debt Consolidation Loans
Debt Reduction Loans
Foreclosure Loans
Free Credit Reporting Tips
High Risk Loans
Home Equity Loans
Home Loans
Lawsuit Loans
Mortgage Loans
Pay Day Loans
Personal Loans
Products on the Internet
Real Estate Services
UK loans
Unsecured Loans
Loan Article Index
Loan Articles A-G
Loan Articles H-Q
Loan Articles R-Z
Mortgage Calculators
Mortgage Calculator
Mortgage Amortization Calculator
Rent vs. Buy Calculator
How Much Can I Afford Calculator
Auto Payment Calculator
Click here to Sign up for Email and Newsletter

 

redhotloantips fat loss


Cash Advance Loans: Loan Sharks In Disguise?

Written by: David Berky

You have seen them on the corner and in the poorer parts of
town with names like "Quick Cash", "Quick Loan", "Payday
Loans", "Car Title Loans". They are starting to sprout
up all over the country and will soon rival Starbucks for
sheer number of locations.

They are the new trend in predatory lending practices but
still manage to fly under the radar of regulation in most
states. They don' t charge interest, they charge a
"fee".

But it sounds like the ultimate in convenience. Need
some quick cash - stop by and in just five minutes you can
be out the door with $100, $500 even $1000 dollars.
But what is the true cost of this "convenience"?

How It Works

A cash advance or payday/paycheck loan is usually secured by
a personal check. Some companies want your bank
account or credit card information in addition to or instead
of a check.

You write a check to be cashed or agree to have an amount
withdrawn from your bank account sometime in the future;
usually 14 days (the standard payroll period).

After completing the agreement/contract you are given an
amount that is less than what you have agreed to pay.
The difference is the "fee" for the loan service. And
you have got your cash!

Why It Works

Why is the company willing to loan you money like
this? Simple, because loaning out money for these
"fees" really amounts to a huge profit at your expense.

For example, say you borrow $200 and the lender charges a
"fee" $15 for each $100. Within 14 days you will have to
pay $230 for borrowing $200. Now if the $200 keeps you
from having to pay a $100 late fee or penalty on something
it is probably worth it. But if you just want the
money today, you are paying a high price.

You are paying 15% interest for a 14 day loan. That
amounts to 3785% compounded interest yearly! No wonder
lenders are happy to loan you this money. If they loan
you $100 and you pay them back with an extra $15 in two
weeks and they loan out the $100 again along with the $15
extra you paid, and they keep doing this for one year, they
will turn their $100 into $3785 by the end of the year!

Maybe you should be loaning your money to them rather than
borrowing from them.

What To Watch Out For

* Early repayment fees. Pay off your loan early and they
sock you with another fee.
* Late repayment fees. You may have to pay the entire fee
again if you miss the payment date.
* "Membership" fees. Some companies charge you to become
their customer along with charging you as their customer.
* Giving lenders access to directly debit your bank account.
Just hand them your wallet, it's quicker.
* Fine print (as in all contracts). Know what you are
signing or don't sign it.
* Bounced check or debit fees. Make sure you have money in
your bank account or you get to pay your bank a fee as well.
* "Collateral" requirements such as a car title. Miss your
payment and you may be missing your car - permanently.

There Is A Better Way

The root problem here could be that you are getting
strangled by your debt payments. Credit cards, store
accounts, installment payments and such can eat up your
income quickly. Ite may be time to visit a non-profit
credit counseling service or create a debt reduction plan
for yourself.

Or it could be that you are just spending more than you
make. You may need to spend a few minutes each week
and write down your expenses. Then categorize and
total them to see where your money is going. Then
record your income for the same time period and make sure
that you are not spending more than you make.

Sure, everyone gets behind occasionally. But you need
enough room in your budget (this means spending less than
what you make) to accommodate the "budget busters" and
surprise expenses that may come up. It may mean
cutting back on cable, magazine subscriptions or eating
out. But last time I checked, McDonalds did not charge
a $15 "fee" for making your food.

About the Author

© Simple Joe, Inc.
David Berky is president of Simple Joe, Inc. which sells the
Simple Joe's Debt Eraser PC software. Debt Eraser can help
anyone get out of debt quickly and inexpensively by creating
a href="http://www.simplejoe.com/debteraser/index2.htm">Rapid
Debt Reduction Plan. This article may be freely
distributed as long as the copyright, author's information
and an active link (where possible) are included.


Other Related Articles:

PLUS Loans – it's never too late to subsidize your child’s education cost
PLUS Loans – it's never too late to subsidize your child’s education cost Rising. Soaring. Skyrocketing. These are the words that seem to begin every article about college tuition costs – and they are words guaranteed to make every parent cringe....read more

Where to Look for Low Rate Loans
Everyone with a financial need wants to find low rate loans, but not everyone knows where or how to find them. Getting the best interest rate and best loan terms can take some work on your part, but it pays off in the end... after all, even a point...read more

Bad Credit Used Car Loans - 3 Tips For Getting An Auto Loan With Poor Credit
Getting a used car loan with bad credit is as easy as getting approved for a loan with good credit. Because automobile loans are collateral-based, many auto loan lenders approve loans to persons with bad credit. There are...read more


Return to Home

468x60

Best Auto Loans, Best Bad Credit Auto Loans, Best Bad Credit Loans, Best Bill Consolidation Loans, Best Cash Advance Loans, Best Credit Cards, Best Credit Repair Tips, Best Debt Consolidation Loans, Best Debt Reduction Loans, Best Foreclosure Loans, Best Free Credit Reporting Tips, Best High Risk Loans, Best Home Equity Loans, Best Home Loans, Best Lawsuit Loans, Best Mortgage Loans, Best Pay Day Loans, Best Personal Loans, Best Products on the Internet, Best Real Estate Services, Best UK loans, Best Unsecured Loans
Subscribe to Mailing List | Private Policy | Unsubscribe | Site Map