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Monthly Archives: August 2018

Eliminate Your Debts

Arrange Your Funds

With list in hand, set aside enough money to cover the minimum payments on each debt. With the funds you have remaining, apply an additional payment amount to the debt that is on the top of your list, in other words, make two payments. If the minimum payment is too steep and you do not have enough funds for making an additional payment, move down your list to debt that you can afford to make an additional payment on.

Yes, you could go ahead and apply your remaining funds to the remaining balance on the debt that you have on the top of your list, however, our goal is to pay off your debts, not pay them down. This will all become clearer a little later on.

Set’ em Up and Knock’ em Down

Once you have started this plan, keep going until you have the first debt completely paid off. When it is gone, you can take the money from that payment you no longer have and apply it to the next debt on your list. If you had to skip the top debt, go back and see if you now have enough to be able to make two payments. Continue paying off your debts in this manner until you have completely cleared your list. Before long, you will have accomplished what you initially thought would be impossible, you have eliminated your debts.

Does this plan sound familiar? It is commonly referred to as the “debt snowball”. No, I am not saying this little slice of genius is my creation. I am simply saying that it is the best way to eliminate your debts without causing, even more, financial hardships. Just keep in mind that if you are having a hard time making even the minimum payments, you will have to either find an extra source of income to initiate this plan, or look for financial counseling to help via alternative methods.

Get Best Payday Loan

Repayment method

Now, this factor is the most important. When applying for a loan, make sure you choose the best repayment method based on your circumstances. For instance, you can give a post dated check to your lender so he could get the payment on a certain date. Or your lender may ask you to give you the account number of your checking account. In this case, the lender will just deduct the payment amount from that account. Based on your needs, make sure you ask the lender to use the right payment method.

Extension

Due to one reason or the other, you may fail to repay the loan on the due date. In this case, you can ask for an extension. Your lender may give you a 48-hour extension based on your history. However, keep in mind that you will have to pay the fees for the extension.

It’s important that you make all the payments until you have gotten rid of the loan. In case of late payments, you will have to face penalties, which you don’t want at any cost.

Valuable items

If you want to enjoy a lower rate of interest, you can apply for a loan with a valuable item, such as jewelry. Usually, a secured loan will save you a lot of money because of the lower interest rate. So, if you can, take something valuable with you to the lender.

Credit history

As far as payday loans are concerned, your credit history plays a great role. Even if your credit history is bad, you can apply for a loan but the rate of interest will be a lot higher. On the other hand, if you have good credit rating, the lender may offer lower rate of interest and better repayment options. Therefore, we suggest that you keep a good credit history in order to prevent higher rate of interest. And for this paying the loan back on time is the way to go.

Hiring Debt Collector

Every state has its own regulations that cover how debt collection is done and how the agencies work. It is important to ensure that you select a firm that adheres to Fair Debt Collection Practices Act. Moreover, the firm should be bonded and licensed to work in the locality.

Sometimes the firms use very uncouth means to collect the debts. This may raise legal cases if the debtor feels that the agency has acted in bad faith. The insurance ensures that you are not held liable for hiring the agency to collect the debts. Ensure you pick a firm that has a valid errors and omission insurance. It will act as your protection if you are dragged to court.

Once you have a list of a few companies, take time to compare their costs. Different agencies use different formulas to come up with their rates. Some charge a small flat rate mostly associated with pre-collection activities. You are then charged a contingency fee that is part of the amount collected. The charge is about 20% to 30% of the amount collected. Pick a company that offers a no collection no fee model.

Some debtors tend to run away with your cash and ignore your calls. Some even skip town. If this is your situation, ask if the agency you are using has a skip tracing service. This service enables the debt collector track the defaulting client even when they have not left any forwarding address.

Just remember that you shall not receive all the cash once you have hired a debt collection agency. For this reason, it is advisable to exhaust all of the other means of collecting debt before asking for help. However, if none of the other methods work, hire a firm that will collect the debts right away.

Payday Loan Consolidation Works

Payday loan consolidation is the solution for individuals who have accumulated huge debts. However, you need to first understand how it works.

The counselor will first evaluate your financial situation. This includes validating loans and ensuring which ones are still active. The company pays off your outstanding debts; so all your loans are rolled into one against new terms. You are then only liable to one credit agency.

A high interest rate is a distinctive feature of this type of loan. A company that works towards consolidation will first look for ways to reduce the rate of interest against which the amount that was loaned to you; thus, your loan is easier to pay back. It can also help you forgo additional charges and fees. To add, they give you sufficient time to payback your loan. So, at a lower rate and more time to pay up, your monthly installments are going to be smaller.

In payday loan consolidation too, you have two options:

· Secured loan consolidation includes securing loans against some value property such as your house or car etc. The rate of interest is low; however, in event of failure to repay, you will lose the property held as a collateral security.

· Unsecured loan consolidation which is offered without requiring a collateral security. The rate of interest is slightly higher than the first option but lower than that charged by payday loan lenders. It is a great option for one with a good credit score.

You can consolidate the loans yourself or get payday loan debt help from companies that offer such services. If you choose the latter, they will handle everything for you right from handling communication with your lenders to paying off your loans.

The bottom line is a payday loan consolidation company does not write off your debts. They work with you and your lender to create a payment plan that is affordable.

Now if you want to get the best settlement soon, you need to choose your payday loan consolidation company with care. You need to make sure the company is registered. This step helps ensure the financial institution is authentic. Be clear about the fees you pay towards the settlement. Payday loan consolidation should be based on your financial situation. The company should not work with a one-size fits all approach. If they force you to accept the terms and conditions in place, avoid the company and look for another. If the company is trying to sell you stuff other than payday loan consolidation services, it is a red flag.

High Rate Loans

Here are the reasons:

  1. As a business model, it is proven to be resilient and profitable. Diverse portfolio, small exposure, short term nature of the loan and catering to a sector few traditional lenders touch.
  2. With Americans’ incomes not keeping pace with inflation, and increasing illegal immigration, there is growing need for Payday type loans as more and more people live from paycheck to paycheck.
  3. While there is State level regulation on Payday practices, this form of lending is highly unregulated and as yet unchecked in any real form by Federal government. And State supervision is spotty. So no wonder new Payday type lenders are cropping up all over.
  4. Because of small loans and not much oversight, entry barriers are low.

PROS AND CONS

Pros:

  1. Easy terms, no collateral
  2. Negative credit history is not an obstacle
  3. Very local
  4. Caters to a segment of population which has no other alternatives to cover their expenditures or budgets

Cons:

  1. Very high rates of interest (although many States have Usury laws, so Payday lenders skirt it by calling these “fees” or “service charges”
  2. Addictive. Since money is easily available, there is less incentive to save and forgo certain expenditures
  3. Does not improve borrower’s credit history–whereas getting credit from a traditional source, even a store, and paying it down regularly will actually improve your credit rating and open up other doors to borrowing