Monthly Archives: September 2009

Delaware Payday Advances

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Delaware is known for its unusually liberal laws on company formation, corporate taxation and other financial transactions. Have you ever noticed how many credit card companies have their headquarters in Delaware, especially those that offer high-interest rate cards to people with poor credit? It should come as no surprise, then, that the tiny New England state allows payday lenders to charge whatever rates they like to customers.

Most payday loans in Delaware appear to come with a 15-20% interest rate per 14-day loan period, which is pretty average for the country as a whole. This would translate into an annualized percentage rate (APR) in the 390-520% range. Heavy competition among lenders in the state means that they have to keep rates down to industry-typical levels.

Provided you can fulfill all the basic requirements such as having an income of over $1,000 a month and being 18 or older, you can get a payday loan of up to $500, depending on how much you earn and whether you’re a repeat customer. You’re allowed to take out any number of payday advances at a time, but the total mustn’t exceed $1,000.

The maximum loan term is 60 days, although the fees are calculated on the basis of 14-day terms, as per the standard practice in the payday lending sector. You can roll over each loan up to four times, which means that you could hold a single payday loan for as long as 300 days, or close to 10 months. There’s no cooling-off period stipulated in Delaware’s payday lending code, so you could conceivably get another loan as soon as your current one can no longer be renewed. This opens up the real possibility that people could become virtually perpetual cash advance borrowers who are forever struggling to get themselves out of debt.

One unique feature of the application process for a payday loan in Delaware is that you have to provide your thumb print on the application form, as well as on the check you deposit with the lender when you apply at a lending store rather than online. This measure, which has been in place for several years, has helped to decrease the incidence of check fraud.

Although Delaware’s unemployment rate is a little bit lower than the national average, it has been rising in line with the rest of the country in the ongoing financial crisis. This has meant that the market for payday loans in the state has grown significantly. Borrowers tend to be low to middle-income earners, many of whom own their homes. Although most unemployed people can’t obtain payday loans unless they also receive income from another source such as social security, child maintenance or alimony, someone in their immediate family who still has a job can of course apply on behalf of the household. So if you’ve lost your job and need a payday loan, your spouse could get one in his or her name to supplement your joint finances.

You Can’t Extend a Payday Loan in New Mexico

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Since November 1, 2007, New Mexico has had new payday lending regulations that impose tighter restrictions on payday loans (also known as cash advances). When the new regulations came into effect, Governor Bill Richardson called them some of the toughest and most consumer-friendly in the country. There are currently some groups that want to further restrict the availability of payday loans and the allowable finance fees, but for the moment the 2007 legislation remains in force.

Under these regulations, you’re allowed to obtain a payday loan of up to $2,500, but the amount can’t be more than 25% of your gross monthly income. You’re only permitted one loan at a time, and the lender has to enter your details into an official online database to verify that you don’t have any other payday loans outstanding when you submit an application. If you’re approved, you’ll be offered a loan term that normally ranges from 14 to 35 days, although it is possible to borrow for a shorter period if you apply in writing for an exemption.

You’re not allowed to extend (roll over) your payday advance in New Mexico, so it’s best to ask for a long loan term if you’re unsure that you’ll be able to pay it back in full after just two weeks. Most lenders will give you back the fees you paid on the unused portion of your loan if you do decide to repay it early. There is a cooling-off period of 10 days in between loans, which means that you can’t take out another payday loan right after you’ve paid back the first one.

If you can’t pay back all the money you owe when the loan expires, you’re entitled to enter a 130-day repayment plan with zero fees or interest. Again, you’ll have to wait 10 days after completing your extended repayments before you can get another payday loan.

New Mexico state law allows lenders to charge up to $15.50 per $100 loaned in financing fees for each industry standard 14-day loan term. In addition, you have to pay a database verification fee of $0.50 per $100. This brings the total maximum charge to $16 for every $100 you borrow in every two-week period, which is equivalent to an annualized percentage rate (APR) of 416%.

If you apply for your cash advance at a neighborhood lending store in New Mexico, you’ll see a lot of new consumer rights information pertaining to your payday loan posted on the walls. In reflection of the large percentage of the state’s population for whom Spanish is the first language, that signage and all the paperwork you’re given once your loan is approved has to be provided in both English and Spanish.

With these tougher new rules in place, New Mexicans can be confident that their best interests are being taken into account whenever they take out a payday loan.

Know Your State Payday Loan Regulations

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It’s interesting to see how much payday loan regulations vary from one state to another, with some states even banning this form of short-term lending. Legislators and lobbyists for consumer and industry groups have taken different views in each state, which accounts for some of the variation in legislation.

The differences between states – and between lenders in the same state – actually used to be even greater. Then each state started to tighten up its regulations to a greater or lesser extent, and the federal government imposed some nationwide lending standards as well. This legislation tends to be aimed at ensuring that consumers are treated fairly and that lenders are licensed to conduct business in the payday lending field.

As a consumer, you need to be aware of the laws and rules about payday loans in your state. This is so that you can plan ahead when you are considering getting a loan, as well as to protect yourself from scams. Now that almost everyone uses the internet, it’s become relatively simple to find the information you need. Here’s a site that lists all the up-to-date regulations for each state in the Union. You should be able to find all the basic information you need here, but you can also look up your state’s Attorney General’s site to see more details.

With the right facts in hand, you’ll be better equipped to decide how much you can afford to borrow from a payday loan provider. You’ll also have a good idea of the fees you should expect to pay, and how to tell if you’re being scammed. On top of that, you’ll learn how long you can keep your cash advance running and how many times you’re allowed to extend it.

Fifteen American states plus the District of Columbia have banned payday loans outright or imposed interest rate restrictions that make it unviable for companies to offer these short-term loans that carry relatively high administrative costs. The remaining thirty five states all cap interest rates at different levels, with six (Delaware, Idaho, Nevada, South Dakota, Utah and Wisconsin) setting no fee limits at all.

In Missouri, payday lenders are permitted to charge as much as $75 per $100 loaned for each standard 14-day term. Most states set far lower maximum fee rates, though, with $15 per $100 (Kansas, Rhode Island) and $17.65 per $100 (Arizona, California, Nebraska and South Carolina) quite typical. Certain states operate a tiered fee structure, for example Washington State, where you pay $15 per $100 on the first $500 and $10 per $100 on the next $200 of your loan.

Don’t forget to look at your state’s rules about collection and prosecution of borrowers who default on their payday loans. While lenders in some parts of the country are allowed to go after delinquent borrower, other states expressly forbid legal action against defaulters and even require lenders to set up fee-free repayment plans to help them get out of debt without too much pain.

Payday Lending experts in Arizona include:

Phoenix Payday
3219 East Camelback Road
PO Box 32
Phoenix, AZ 85004
(602) 467-3009
http://www.phoenixpayday.com/

5 Reasons to Apply for a Cash Advance

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A cash advance can be a lifesaver when a financial emergency comes along and you just don’t have the ready cash to pay for it. It is crucial that you restrict your use of cash advances or payday loans to true emergencies, however. You also need to pay back the money as quickly as possible to minimize the amount of interest you’re charged. If you let a cash advance run on for several weeks, the fees can soon start to overwhelm you.

What kind of situations justify taking on a payday loan? Basically, any time you suddenly need to pay for something you really can’t do without, and you know you’ll be able to pay it back quickly, you should consider a cash advance. Here are some good examples:

1. A medical emergency: When someone in your family is sick and has to see a doctor or go into hospital, it simply has to happen and then you figure out how to pay for it afterwards. Even if you have health insurance, co-pays and medications can take a big bite out of your earnings.

2. Car repairs: Accidents happen and vehicles wear out and need to be fixed – that’s just a fact of life. Most of us need our cars to get to work, so if yours is out of service you’ll want to get it back on the road fast. Since most repairs cost less than $1,000, this is the ideal range for a cash advance.

3. Home repairs: Your water heater gives up the ghost. Your heating and air conditioning unit burns out. Your plumbing backs up. Not to mention the damage that can be inflicted by a tornado, a hurricane or a flood. There are so many things that can go wrong with your house, and they usually need to be fixed right away or the place will be unlivable. Repairs can easily cost hundreds of dollars or more, but luckily a cash advance can help you get your house back in order quickly.

4. Legal fees: It’s not something you plan on doing, but people do get traffic tickets, or even get arrested, every day. The holidays are particularly busy times for law enforcement officials, with speed patrols and DUI checks popping up all over the place. Of course we all want our roads to be safe, but when you step over the line and get caught the cost can put in big dent in your holiday cheer. If you need money for a speeding fine or to make bail, an instant cash advance can be just the ticket.

5. Pet care expenses: If you have pets, you’ll do anything to help them when they get sick. And healthcare for your furry friends doesn’t come cheap. Trips to the vet, medication and surgery can cost a lot, but most animal lovers would rather go broke than see their pets suffer. A payday loan lets you give your beloved dog or cat all the care it needs to recover to its old playful self.

A Payday Loan Could Help Improve Your Credit

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You’re probably well aware of the fact that it’s important to have an unblemished credit report and a good credit score. Whether you want to apply for a loan, find a job or sign up for a cellphone contract, your credit can make the difference between a “yes” and a “no”, and can also determine how much you pay for a loan or a service.

One of the few instances where your credit doesn’t matter is when you apply for a payday loan. Most lenders don’t check your record at all, however they do normally report to the major credit bureaus when a customer takes out a loan and then pays it back on time. Both these facts are good for you, the borrower, especially if you’re trying to improve your credit.

Here are three ways in which obtaining a payday loan can help you rebuild your credit, or simply keep it in good shape:

1. Avoid a credit check: When you apply for most types of loan, the lender will check your credit as part of the approval procedure. Many people don’t know that the credit check itself can actually hurt your score. In contrast, you can get a payday loan or cash advance without having a credit check done, so there’s no risk of damage. This means that if you need a bit of extra cash to get you through a rough patch, a payday loan could be a wise choice compared with a loan from a large bank or other traditional financial institution.

2. Be rewarded for paying off your loan on time: Your payday loan issuer will report to the three major credit agencies (Experian, Equifax and TransUnion) if you’re late paying back your loan, or if you go into default. Equally, though, they’ll tell the credit agencies if you do manage to repay on time, and this will be noted on your credit report and can help boost your score. Paying back your loan ahead of time can win you even more brownie points with the credit bureaus, and some consumers use payday loans for this purpose alone even when they don’t really need the money.

3. Correct your credit record when necessary: Even though most payday lending firms don’t check applicants’ credit, a lot of people do check their own records before seeking a loan (this doesn’t hurt their credit). In some cases, they discover mistakes on their credit reports due to slow errors, typing errors or even mixups with people who have similar names or social security numbers. You’re entitled to dispute any incorrect information on your credit report, and ask for it to be fixed. You can gain several points on your credit score by doing this.

So you see how a payday loan can be useful for more than paying for a financial emergency. Used cleverly, it can also help to raise your credit score, which will save you money in the long run.

How does the APR work?

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There is a lot of confusion about what the APR (annualized percentage rate) on a cash advance or payday loan really means. Many consumers – and plenty of politicians too – believe cash advances to be excessively expensive loans that trap low-income borrowers into paying sky-high interest rates and sinking ever deeper into debt.

The truth is that a payday loan can actually be a great way to fund a financial emergency or bridge the occasional gap between paychecks, as long as you handle the loan sensibly and pay it back quickly. There are three basic things you need to know about APRs and cash advances:

1. How to work out the APR of a cash advance: This is a very simple calculation, yet it’s vital to master. The APR allows you to pitch the comparative cost of one loan against another on an apples-to-apples basis. Just convert the two-week fee that is standard in the cash advance industry into an annual figure by multiplying it by the number of periods (two-week segments) in a year (26). If your lender charges $15 per $100 for every two weeks, you multiply 15 by 26 to get 390. This is the annualized percentage rate of the loan – 390%. No matter how much you are borrowing, just remember to use the fee per $100, and you won’t go wrong.

2. Look at the both the short-term and long-term real costs: The short-term cost of the annualized percentage rate is the fee charged for each two-week standard loan term, which commonly ranges from $15 to $20 per $100 borrowed. For each additional period you keep the loan running, you’ll pay another round of fees. If you repay your cash advance quickly, your borrowing cost will be quite manageable. Long-term, an ongoing paycheck loan can prove to be very expensive, however. In an analysis of lender Advance America’s financials, investment bank Morgan Stanley found that 38.1% of its clients used 9 to 14 payday loans a year. These heavy borrowers undoubtedly had to pay more than a reasonable amount of interest on their loans, but one could also argue that they were using them in the wrong way.

3. Keep rolling over your cash advance, and you’ll feel the APR: If you extend your loan several times, or take out new payday loans frequently, the effect of the APR will become a heavy burden. Let’s say you get a paystub loan to cover a bill for your child’s medical treatment. You receive your regular pay, but you still can’t pay back the loan, so you extend it. Then another emergency arises and you have to use your next paycheck for that. Before you know it you’ve had to pay half a dozen sets of fees, and you’re stuck in a debt cycle.

The bottom line: The important thing to understand is that payday loans are meant to be short-term financing tools. Like any responsible financial transaction, knowledge is the key to success.

Using Your Savings Account to get a Payday Loan

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When you obtain a payday loan or cash advance on the internet, you’ll need to provide your bank account details so that the lender can deposit the money for you. When the due date rolls around, the payday lender will debit that same account for the amount of the loan, plus the interest or finance charge you owe. The question is, should you use your savings account or checking account for your payday loan?

When online payday loans first started appearing, loan companies required that borrowers have an active checking account, in the same way that storefront payday lenders do. Then some outfits started to relax their rules, and many lenders now accept savings accounts as well. Some banks won’t allow direct debits from savings accounts, however. If this applies to you, ask your bank if they can make an exception.

It’s usually preferable to have your cash advance loan put into your savings account if at all possible. There are a number of different reasons for this.

Funds in savings accounts are available immediately: Unlike some other types of savings products where you might have to wait several days before you can use your funds, once the money shows up in your savings account you can access it straight away. Banks often “sit on” the funds coming in to your checking account for longer too.

Money in savings accounts grows more quickly: You know all too well that the interest you earn on your checking account is only small change. That means that it takes much longer to rebuild the value of a checking account than a savings account. Banks are currently keen to attract savers and are offering interest rates on savings accounts that are far above the Fed Funds rates, which is now at an all-time low of 0-0.25%. You can get over 2% interest on your money if your shop around, and even as much as 6% from some accounts with special conditions. So if you pay for your payday loan out of your savings, the impact is lower over time.

Savings account balances fluctuate less: Your checking account is essentially a slush fund, with money going in an out on an almost daily basis. This means that the account balance is rising and falling all the time as well. It’s hard to know exactly how much is in that account on any given day, no matter how good you are at balancing your checkbook. Each bank has a slightly different policy on the time it takes to clear checks and electronic deposits, so you never know quite what your accessible funds are. If you’re waiting for your paycheck to be deposited into your checking account, and your payday loan falls due, you might not have enough to cover it – which can spell trouble, and big expenses. In comparison, savings accounts are a lot more stable, and tend to have a far higher balance anyway. This makes them a lot safer when it comes to repaying your payday loan.

Related searches: get a loan using your savings account, payday loan using your savings account

Use Your Home Equity to Lower Your Monthly Debt Payments

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If your debts are getting too big to handle, don’t despair! You might be able to reduce your total monthly bill payments and still pay off what you owe by tapping into the equity in your home and consolidating your debts.

If you’re struggling to keep up with the payments on your credit cards and other consumer loans right now, you should look for alternative options that can ease your burden and get you out of debt faster. If you own your home and have some equity in it (it’s worth more than your mortgage balance), you might be able to borrow against that equity at a relatively low interest rate.

You could apply for a debt consolidation loan or home equity loan, which gives you a lump sum that you can use to pay off your debts immediately. Then you make monthly payments on your new loan, which is sure to cost you less each month. For example, you might have been paying 20% annual interest on your credit cards. Now you could cut your monthly payments and/or get out of debt more quickly by using a paying home equity loan at a rate of, say, 8.5%. Don’t forget that with a home equity loan you get the added benefit of a tax deduction on your interest payments.

Another way to utilize your home equity for debt consolidation is via a home equity line of credit, or HELOC. This is more like a credit card in that you can take out as much as you like up to a credit limit, and you only pay interest on your outstanding balance at any given time. Interest rates on HELOCs are currently even lower than on home equity loans, at under 5% in some cases. If you can pay off all or most of your credit card debt with a HELOC, you can really save a lot of money by trading your high interest credit card payments for an economical home equity line of credit.

You can also save a bundle in monthly mortgage payments if you currently have two mortgages and you refinance to consolidate them into a single loan. If either of your present home loans has an adjustable rate, try to get a fixed rate mortgage when you combine the two into one. Many adjustable rate mortgages are designed to start artificially low, and then jump to much higher levels after a few years, so if that has happened to you, you would be far better off with a fixed rate now.

When you refinance your mortgage, there are two other ways you can benefit. Firstly, you might be able to opt out of paying personal mortgage insurance, if you had to take it out when you originally bought your house. Secondly, if your equity is sufficient you can ask to take some cash out when the mortgage is signed. Then put that cash, and the money you save on your reduced monthly repayments, towards your higher interest debts.

5 Tips for Teaching Teenagers about Savings and Debt

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If you have a teenage child, you should encourage him to learn about saving money and distinguishing between good debt and bad debt. In doing this, you’ll teach him about financial responsibility and help him prepare for a lifetime of sensible money habits. If you let your teenager open a savings account, he’ll enjoy watching the balance increase every time he makes a deposit.

Once they reach their teens, kids should learn about the difference between buying expensive clothes, shoes and games and their more economical equivalents. This will help them understand that they shouldn’t waste their money on high-priced items they can’t really afford.
Here are five tips for teaching teens about managing their money:

1. Open a savings account for your teenager at a local bank or credit union. Financial institutions usually offer free accounts for minors, so he will get the full benefit of the interest he earns. He can save his wages from a part-time or summer job, plus birthday or holiday gift money, and might even have enough for a cheap car when he receives his license. Having a goal to save towards should spur him to save as much as he can.

2. Show your teen how to manage the money in his savings account. Demonstrate how to keep a simple account record by writing down the balance figure, and then keeping track of deposits and withdrawals in two different columns, with a third column for the new balance figures as you go along. This will teach him how to balance his check book in the future too.

3. Teach your teenager how to set financial goals and then work to reach them. Ask him to write a list of things he would like to buy for himself or as gifts with his own money, and then discuss timeframes for achieving these goals. He will feel encouraged to save money if he can see specific targets to aim for.

4. Help him work out long it would take him to save up for, say, a particular pair of running shoes. Once you know the price, ask him to look at how much he is putting away every month, and what he can do increase his savings. Then he can calculate how long it will take before he can go and buy those shoes. This will be a real learning experience for him, and will help him see how adults have to budget for everything they want to buy.

5. When your teenager gets a bit older and has proved that he can handle his savings account responsibly, it can be time to graduate to a checking account. Many banks will open checking accounts for teens provided there is an adult co-signer on the account. Giving him a “grown up” checking account can be a great way to drive home the fact that he is now a young adult, and not a child any more.

How to Get a Good Deal on Car Insurance

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Car insurance is one of those things you just can’t do without. You can save money and stay protected if you just shop around and take a few other measures to lower your risk profile, however. Here are some of the things you can do to lower your auto insurance premiums:

Do your homework: Before you start calling insurance agencies to get quotes for insuring your car, prepare a list of questions. A recent survey of agents found that the majority neglected to inform prospective clients about discounts and deductibles that could have reduced their premiums by up to 40%. You’ll also want to check out each insurance broker in Best’s Insurance Reports: Property-Casualty at your local library, or with your state insurance office.

Compare premium costs: Auto insurers are notorious for charging different rates for the same coverage, with available premiums varying by up to 100% in some areas. Shop around, starting with a large firm like State Farm or Allstate and use their quotes as a benchmark to judge near-identical policies at other companies.

Manage your teenagers’ driving: It’s expensive to insure young drivers, especially as the principal driver of a vehicle, although rates do drop once they turn 25 or get married. Good students often get a discount (5-25% off for a B average is typical), as academic achievement has been proven to equal careful driving. They can also get a break for completing a drivers’ ed course.

You should drive carefully too: If you’ve had a clean record for three years, you should be able to get a 5% discount, and 10% off for six years without an accident or traffic ticket. Some companies give price breaks for non-smokers, women who are the only drivers in their households or seniors. Carpoolers often get discounts of 15-20% because they don’t drive every day.

Check the car’s rating before buying: Some models are involved in more accidents than others, or are stolen more often. These cars will cost more to insure, no matter how well you drive.

Consider increasing your deductibles: Select the highest deductible you can afford, with a view to paying for minor damage yourself. This can save you quite a bit on your premium.

Reduce the coverage on an old car: If your car is more than five years old, and depending on what it’s worth, it might make sense not to pay for comprehensive and collision coverage. Your risk would rise, but remember the insurance won’t cover more than the value of the vehicle.

Insure all your vehicles with the same company: You’ll get a discount for including multiple cars on one policy. You should also check into available discounts for buying other policies from the same company, for example to cover your home.

Don’t pay monthly: It’s always cheaper to pay your annual insurance premium in one lump sum than to split it into monthly or quarterly payments.