Tag Archives: Loans

Quick Payday Loans

What is a Quick Payday Loan?

Quick payday loans let in need borrowers have access to fast cash, in exchange for paying a high to very high interest rate. Most all of the time, the borrower has to be employed and provide proof in the form of a stub from a paycheck or a bank statement showing regular payment transfers from an employer. The lender will provide a small cash loan, to be repaid from the borrower’s next paycheck. This makes the typical term of the loan one or two weeks. On an annualized basis the interest rate (APR) can run over 100% and more. In extreme cases the APR can be over 500%.

Why are Payday Loans So Popular?

Payday loans are popular with certain parts of society. They provide people in immediate need of funds with no other means of getting cash an answer. They are also popular because people do not consider the real interest rate they are being charged, but only the rate for the one or two weeks. Some lenders do not require any more information than a current pay stub as proof of employment, making these loans easily accessible. No credit check needed. Funds can be instantly transferred into a bank account. In retail outlets for payday loans the borrower can leave with cash.

Who is the Target Market?

Payday loans are targeted towards low income people with no other means of raising cash quickly. Because of this ? and the high interest rates, they draw criticism from consumer organizations. Some entities have called the institutions which offer payday loans “predatory lenders.”

Pluses and Minuses of Payday Loans

The big attraction of payday loans are that they are easy to get if you are currently employed, and the cash is usually available immediately. They involve a minimum of paperwork and no credit check.

The negatives of payday loans are the interest rates charged, and the potential for late fees and other penalties to accumulate rapidly. People in such dire need as to take a payday loan in the first place tend to over estimate their ability to repay the loan on time. Interest and penalties/late fees can easily grow to more than the initial loan amount if payments are not made as agreed.

Should I Take a Payday Loan?

Payday loans should be taken only after examining all the alternative ways of raising short term cash. These might include selling something you own, borrowing from friends or relatives, putting off paying other bills temporarily and the like.

Auto Loans Rates

Like buying a home, auto loans rates fluctuate based on market conditions. When cars aren’t selling very well, auto loan providers will drop rates in an effort to reduce the lull. When cars are selling well, they’ll raise the rates to a point at which the market can bear .

Also, just like any other type of loan, auto loans rates are credit dependent, whereas having better credit will assure you a lower rate. If you have a credit score above 700, it’s entirely possible that you might be able to secure a loan well under the market average, and in some cases, as low as 0% when using the dealer’s finance company.

It’s not unheard of to see rates in the 2-3% range either.

On the other hand, having a credit rate below 700 will place you in the medium to high risk category, where you can expect to pay 8% at a minimum, and in some cases, as high as 15-20%. If you get a bad credit auto loan, usually necessary with credit scores in the low 600′s or below, many companies will try to kill you with interest rates. In this case, you are better off trying to get a co-signer or putting money down to lower your rates, if possible.

Most dealer finance companies, at least those of the major car manufacturers, like to see a credit score of at least 680 before offering a loan; anything less than that and you’ll be forced to procure your own financing. There are many online companies that will provide financing, but you have to read the fine print to make sure that there aren’t any pre-payment fees, which would penalize you if you sought to refinance down the road.

Still, because of the struggling economy, auto loans rates are near the lowest they’ve ever been, so there really isn’t a better time to buy than now. The best way to ensure a lower rate is by making sure you don’t have any outstanding collections, and that your credit cards and other loans are not maxed out. The lower your balances are, the better chance you have of getting approved. Even when you do get approved, you’ll be given a maximum loan value. The only way to buy a more expensive car is to put money down to cover the difference. This also includes add-ons, like warranties and sports packages.