Monthly Archives: October 2013

Potential Impact To Your Ability To Borrow From Your Credit Scores

It is estimated that about 30 to 35% of Americans are faced with bad credit and this certainly has implications on their ability to obtain loans from financial institutions. One of the groups of people who fit well for short term loans is those who have bad credit. When you are faced with bad credit, financial institutions are reluctant in offering credit facilities. Emergency loans are designed to enable individuals obtain cash in relatively less time without hassles.

You may not be required to provide evidence of your credit score. This means that even if you have suffered bad credit, you can still enjoy these financial lending services. The lenders understand the challenges faced by borrowers and especially those who have plunged into bad credit.

The payday advances are short term and unsecured and as long as you can provide prove of employment or payroll records, you are able to secure yourself a fast loan. However, these loans come with setbacks and this is the reason why they are not suitable for everyone. You should go for payday advances or cash advance loans only if you have a pressing need for money and you have no alternative where you can get a loan.

Since many people with bad credit score are not likely to get loans from conventional banks and lending institutions, they may find the short term emergency loans more suitable to solve their urgent financial needs. Because of the risks involved in these loans, borrowers are subjected to high interests rates and they can pay somewhere between 15 to 30% of the loan amount in a term of two weeks.

This translates to an annual percentage rates (APRs) ranging from 390% to 780%. This shows that borrowers need to make a good decision before they opt for these loans. In addition, some states regulate these loans. The regulations cover the rollover terms, the minimum and maximum amount that a borrower can obtain as short term loan as well as the interest rates.

The Consumer Financial Protection Bureau (CFPB) has the authority to regulate payday and title loans. This organization is charged with policing issues that relate to financial products and services for unfair and deceptive practices. Individual states, guided by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which paved way for the Consumer Financial Protection Bureau, have enacted their laws to regulate the industry at the state level.

Because lenders understand that they are dealing with people that are faced with bad credit, they do not particularly emphasize on checking your credit history. They instead focus on your ability to repay the loan such as prove of employment or income earning activity. This means that regardless of your tainted credit score, you have the opportunity to secure yourself a quick cash advance that you can use to solve your pressing financial needs.

Bad credit payday loans are therefore good options for those people who are caught up in financial crunch and faced with unexpected expenses such as medical bills, school tuition fees, broken down car or servicing an existing loan.

The Holidays Are Approaching Some Tips For Sound Finance Decision Making

As we fast approach the 2014 new year, we will face another holiday season which can be extremely stressful and financially challenging for millions of consumers. Borrowers should really think twice before getting a quick holiday loan, or a quick cash loan from one of the storefront lenders. There are two dangers for the consumer in these loans.

The first is the exorbitant interest rate charged, and the finance charges. For example, the Federal Trade Commission states in a consumer advisory that the finance charges to borrow $100 can range up to $30 for two week loans. These finance charges are sometimes accompanied by extremely high interest rates that run up to 750% APR. If the $100 loan is renewed twice, the interest would be a minimum of $45 up to $90, according to the FTC.

The second danger is that 90 percent of the short term loan borrowers are not in any better position to pay off the loan than they were when they accepted the loan. The loan company will gladly roll the loan over and add more interest fees. Some states will only allow a short term loan form a quick loan company to be renewed only once. This means that the entire loan amount plus interest and fees must be paid, or the total amount due will be deducted from the borrower’s checking account electronically.

The other practice is the borrower has to have a checking account and they must write a check for the total amount due when they take out the loan. If the loan is renewed, then another check is written to cover the higher amount. The check will be cashed at the borrower’s bank if the loan is not paid when due. If the check bounces, the lender now has an NSF check which they can turn over to the local prosecutor who will arrest the borrower for writing a bad check.

If the money is not available to the household, then the possibility that the money will not be available in two weeks is high. The borrower needs to realistically assess the possibility of having funds to pay off the loan.

These lending sources have studied borrowing patterns and they know that the vast majority of borrowers cannot pay the loan back in two weeks. So, it is important to for the borrower to recognize that the odds are against them despite their good intentions.

By borrowing from these lenders, the public is reinforcing their position in the community and making these lenders stronger and more profitable.Often, the borrower goes to another quick loan company to get the money to pay off the first loan. Thus, the terrible cycle of indebtedness grows.

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Tips For College Students To Use Credit Cards Responsibly

Some good tips to help college students with their finances, and avoiding the pitfalls of needing to use short term loans or get caught in a finance problem, which can leave a long term mark on your credit profile.

The “bank of mom and dad” can only help college students for a certain period of time, and then they will have to learn to pull on the parachute guide-strings by themselves. The funny thing about credit and credit cards is when you’re young, in college, and some other person (think mom and dad) is “footing the bill”, you could care less about starting a credit history on your own or starting and building it slowly but surely. And yes, young college students, what you do now under your own name, will follow you for the rest of your life. Good credit or bad credit, it’s your choice.

Credit card abuse has destroyed many individual people and families over the years simply because of one single word: discipline! College students who continue to use a credit card courtesy of their parents know that parents don’t mind paying for the usual necessary college required items, but most times they get fooled by their own kids, who use the credit card for more that just college activities. Think drinks, fast-food, gas, girl or boy friends and any other expense you can think of. And if you doubt this statement and live in a college or major university city, stand in line at the grocery store behind college students and see how quickly that available “bank of mom an dad” credit card is used for items that have nothing to do with schooling; it’s purely entertainment and $20 bucks “cash back” to pay for things like booze.

The best way for any parent to insure their student son or daughter learns how to establish responsible credit card discipline, is to co-sign a credit card with a designated limit (think $500 bucks). This way the student’s name is on the card as well as the parent. Following this credit path for one year, and insuring that all monthly payments are made on time, your student family member will be on their way to establishing a solid credit history. Here are a few discussions you can have with your student, or college-bound, just so they know who’s still in charge.

A – College and universities offer pretty good rates on credit cards, and generally are targeted to assist students.
B – For students with no past credit history should remember NO credit is good credit. And it can offer the opportunity to start and build a good credit history and FICO rating. A secure card could mean a co-signer (mom and dad) or your own cash.
C – Run a credit report annually. You can do it FREE from the government site with no strings attached.
D – Once your student gets a job and opens a bank account, make sure they get a checking account with a bank or credit union and insist they receive a “debit card” not a credit card. This way they will continue to walk down the path of building a credit history that will be gold, later one.

How Does Car Title Financing Work For Alternatives To Personal Loans

Considering taking out a cash advance or personal loan, lets review some alternative options for borrowers who may need larger loan amounts:

Car title loans are one option for consumers seeking a quick loan of cash without a credit check and with minimal income requirements. Very much like borrowing money at a pawn broker, the borrower is required to surrender collateral to secure repayment of the loan. In the case of a car title loan, that collateral consists of the title of ownership to a car or other motor vehicle and, usually, a spare set of keys to the vehicle, as well. For the period of the loan, you still have full use of the vehicle as long as you keep making the payments.

After the loan is paid off, the vehicle’s title is returned to you. If you fail to pay back the loan, two outcomes are likely: The lender may immediately take possession of your vehicle and sell it to recover the loan amount or the lender may offer the option to roll over the amount into a new loan, including substantial interest and penalty charges.

Car title loans can usually be taken out quickly in a straightforward procedure and can be arranged at both brick-and-mortar locations and from online companies. For consumers who qualify, the money is typically available within hours.

In most cases, the borrower is required to have a 100 percent clear title on the car in order to use it to secure a car title loan. You can’t still be making car payments to a bank or other financial institution, for example. Some other options that come up when shopping for a car title loan also deserve consideration.

First, shop for lower interest rate options. A 15 percent interest may seem attractive for a short-term loan until you read the fine print and realize the basis of the 15 percent interest calculation is monthly, not annually like other standard loans. This means the actual annual interest is over 150 percent. Companies that provide short-term, secured loans like car title loans are not subject to the same usury laws as credit cards and other conventional sources of consumer credit. This allows them to impose high interest rates. However, since car title loan companies are able to essentially set their own interest rates in many states, those interest rates may vary from company to company. Shopping around online and at physical locations for lower-interest options on car title loans is a must.

Also look for options such as companies that charge a reasonable late fee versus those that immediately take your car away for a single late payment. The policy varies by company. Also find out if one late payment can be used as a basis to raise your interest rate on the remainder of the loan for the duration.

Some companies impose high minimum value requirements for a vehicle to be used as collateral. For example, in order to qualify for a $1,000 car title loan, you may be required to own a vehicle with a “blue book” value of $3,500. Many consumers are unaware of the used value of their vehicle—in may cases, it’s less than they think—and may be surprised to discover it’s not sufficient to secure the loan in the amount desired. Seek out options for a car title loan where the lender will lend at least 50 percent of the value of the vehicle.

FAQ On Improving Your Credit Scores and Lending Profile

There are several reasons why you may have a bad credit history. Sometimes, you get this by adopting poor spending habits. And at other times, it is because someone has defrauded you using your credit cards. Whatever the case, it is important that you repair your credit, so you can get access to credit facilities in the future. There are times when people do not understand the full extent of their poor credit, until they have to apply for a loan. This is when they are shocked to see how badly their credit has been affected. It is best to repair your credit, and achieve credit-worthiness.

Repairing your credit is not a simple task, and it is best that you approach a financial expert who will help you manage the repair. Repairing your credit will require constant monitoring of your credit activities. It will also require that the inaccuracies in the credit report are corrected, using documentary proof. If there are bills that you have already paid, and are included in the report, then you should have these removed. Basically, the task is time-consuming, and this is the reason why most companies that offer these services charge you prime fees. You may end up paying up to $500 for these services.

Apart from looking at the inconsistencies in your credit report, the companies will consolidate your debts into one account, and this will help in improving the credit score. Credit scores are calculated using the number of accounts that you have. If most of your accounts are in poor shape, then the ratio will decrease and give you a poor score. When all the debts are consolidated into one account, the ratio improves and so does the credit score. Debt consolidation also allows you to pay less money in terms of interest, thereby reducing the load on your finances. This process also gives you better bargaining power, when you are negotiating with a lender for a loan. There are lenders who will give you a loan to settle all your dents, leaving you with only one single debt to service.

When looking for a company to repair your credit, you should do your due diligence and ensure that they are professionals who will actually help you improve your credit score. Remember that this is a delicate matter, and you need it to be handled in a professional manner. The process is one that may take a number of months or years, so you should be patient when having you credit repaired. Ask for testimonies from people who have had their credit repaired in the past, and also look through Internet review sites for more information. You can also get information from friends, family, and colleagues who have used these services before. If you are in doubt, you can contact the Better Business Bureau, and they will give you names of companies that you can trust. Take control of your financial future, and seek credit repair services immediately.

Contributions to this article were provided by the editorial team from best credit cards, who work with consumers on a daily basis to help them learn about rebuilding and restoring their credit through pre-paid card offers, learn more online at

Consumers Can Improve Cash Flow By Smartly Using Rewards and Rebate Credit Cards

Getting the most out of your shopping dollar is always desirable. One way to do that is by charging your major purchases with a credit card that offers rewards points on each purchase. Finding rewards cards that provide great benefits is particularly desirable for shoppers during the holiday season due to the significant amount of money that is spent during this season.

Finding the right rewards cards for you in 2013 is predicated on understanding your shopping habits. Where are you likely to make a significant amount of purchases during the holiday season this year? A good place to find out is to go back to your last year credit card bills and see which stores you did a lot of shopping in. Then explore the different cards available to see which of the rewards cards out there would have provided you with the most rewards.

Looking through a credit card rewards card site is an excellent way to track what credit card rewards offers are currently out there. Start by determining the stores that you are most likely frequent and make a list of how much you spent there last year and how much you are likely to spend in each store for the 2013 holiday season. Obviously, as your family gets older your shopping patterns change so you have to consider this as well.

When you are comparison shopping credit cards
, the best option is a comparison site. Many of these sites have search functions that allow you to screen for the credit cards that best suit your shopping habits. There are credit card rewards programs that provide you with cash, airline travel points, and fringe benefits. If you are not much of a traveler it is obviously best to stay away from the mileage points. In this situation, cards that reward you with cash or fringe benefits may be better options. Understand what you want out of a rewards card and it will be easier to match one that fits your needs.

When selecting which rewards cards to apply for you should remember that this is not an either/or situation. You can select multiple rewards cards so that you can get the maximum rewards from your cards. Having too many may harm your credit history so you should strike the right balance between selecting cards that offer rewards without seeming like you are in desperate need to a potential lender. Furthermore, many credit card rewards cards have caps on the amount of rewards they pay, so be aware of these limitations and use them to the extent that they offer these benefits when shopping in the 2013 holiday season.

Rewards cards can provide you with instant cash or other benefits when shopping. To maximize the benefits of these cards you should be aware of your spending habits and consider changes in the current year, comparison shop amongst the awards programs available, and be aware of any limits when selecting a credit card rewards program. This way you can get the most out of your rewards cards for the holiday season.

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General Regulations For Tribal Lending Entities

There is currently an ongoing court battle to decide whether or not payday loan providers owned by Indian tribes are subject to federal regulations or whether they are protected by tribal sovereign immunity.

AMG Services
Recently, however, AMG Services, a Kansas payday loan provider founded and managed by Scott Tucker (known to race car fans as the recent winner of the Baltimore Grand Prix) has agreed to cease deceptive lending practices which government authorities such as the Federal Trade Commission declare to be in violation of federal laws.
AMG operates a payday loan service online under a variety of brand names. These include Ameriloan, OneClickCash, 500Fastcash, US FastCash, and UnitedCashLoans.

In most payday loans, borrowers are required to provide loan providers direct access to their bank accounts; lenders are supposed to withdraw the amount of the loan plus the interest in a single transaction. AMG, however, was accused of withdrawing only the amount of the interest for months, thereby increasing the amount of interest to be paid by the borrower. A loan of $300 may then cost a borrower almost a thousand dollars to clear the debt. According to the FTC, this practiced was not properly disclosed by AMG under the Truth-in-Lending Act.

AMG has declared themselves immune from such regulations, claiming to be owned by the Santee Sioux of Nebraska and by the Modoc and Miami tribes of Oklahoma. While the case awaits trial, FTC authorities had claimed that AMG persisted in its unfair practices, and continued to mislead new borrowers.

But with the agreement from AMG filed in federal court, the lenders will no longer force borrowers to provide direct access to their bank accounts. The loans will also be paid off in a single payment instead of being drawn over a period of months. In addition, AMG will no longer threaten their clients with jail time or litigation should they be unable to pay back the loan.

Court Battles

Payday loans are not universally available in the US. At least 17 states have laws in place which restrict or even forbid payday loans. Prior to the FTC’s case against AMG, the company has already been cited by authorities in several states. These authorities have accused AMG of going against state laws regarding payday loans, and the company has put up tribal ownership and immunity as a response to the allegations.

The position of AMG is that the FTC has no right to sue it and this case is pending in federal court. Other issues to be decided include the question of whether AMG is in violation of federal law. If that is the case, the issue of financial remuneration will also have to be decided.


The issue of tribal payday loans and short term finance offers is still an issue that requires further clarification. For the moment, if you are contemplating a quick loan, you may want to consider alternative options such as installment plans from credit unions. If payday loans are your only remaining option, make sure that you are clear with a particular lending company’s rules and practices, and try to pay off the loan as quickly as possible.

Learn When It May Be Worthwhile To Consider Short Term Financing

There are times when you need cash to sort out an emergency financial need such as paying your tuition, repairing a broken down car, paying regular bills or medical expenses. During this time, you need to get the cash in the least time possible. However, at times, you may be limited to get that cash from the banking institutions and other lenders and therefore, you have to opt for the short term emergency loans.

There are different types of emergency loans such as payday loans; cash advance loans, college loans, home loans, and even bad credit loans. The aim of the short term loans is to enable a borrower get the loan within the least time possible and be able to fix very pressing financial emergence need. This is one of the reasons why these loans are not designed for everybody.

If you have bad credit, it is most likely that conventional banks will shy away from offering you credit facilities. This means that you are limited in accessing credit facilities from your bank if you have suffered bad credit. In addition, banks may not be able to release the funds in the shortest time period when you are in dire need to solve an emergency.

Because the short term emergency loans such as payday loans and bad credit loans are designed for a group of people who may not access the traditional credit facilities, they come with their risks or uncertainties. These loans attract high interest rates and if they are not checked, they can result to further financial constraints on the borrowers.

These loans attract high interest rates ranging from $400 to $600 per year or even higher. For instance, a borrower obtaining $100 as payday loan payable within 2 weeks would pay an interest of $15. The annual percentage rate for this loan would be 26 x 15% and this gives a total of 390%. It is this high APR which makes these loans quite costly.

If you are taking the loan, you need to ensure that you have sufficient income, which can enable you pay the debt in time and also have some extra money at your disposal to meet other expenses such as food, rent, bills and transport until your next pay check. One danger with the short term loans is that they attract high APR that can early plunge the borrower into vicious cycle of borrowing.

People find themselves hooked into a cycle of browsing. The amount of money that can be advanced to a borrower by a lender is also limited. In order to protect the interest of consumers, some states have put in place regulations that govern how emergency loans are disbursed to individual borrowers.

In Alabama, the terms set for payday loans are between 10 to 30 days and interests are regulated at 17.5% of the loan. The average amount which a borrower can borrow is $500. In this state, the law stipulates that a rollover can be allowed with the same customer after the initial loan period. This means that after that rollover, the loan is due and payable. However, if the borrower is not able to repay the loan after the rollover, an extended payment option may be granted of four equal monthly installments based on the outstanding balance.