Selasa, 31 Juli 2012

High Payday Loan APR Confusion Is Explained

What is all the confusion about payday loans? The process of getting one is not confusing. There is an easy application which does not take much time to fill out. No credit check is another aspect which speeds things up. So if a person who has bad credit can still get help with a small short-term direct payday loan, wherein lies all the confusion?

Read a story about a payday loan online or from a storefront, it all reads the same; exuberantly high APRs create money traps for people who use short-term loans. In order to start to unfold the confusion for APR and payday loans, then we need to understand each component.

What is APR? Annual percentage rate describes the interest rate for the whole year. The amount per pay period is multiplied by the amount of payments in one year to get the APR. An effective APR will include any fees which are charged for the loan. A payday loan will have fees attached to the loan amount to be paid off in one payoff period. The loan term is set up based on your pay cycle. If you get paid once a month, then you will have till then to come up with a payment. If your get paid bi-weekly, then your pay period is set for two weeks. On average, the typically low cost payday loan term is set for about 14 days. When calculating APR, the total is higher with more pay periods in a year's time. Thus we get extremely high APRs for payday loans.

Other creditors who bill monthly will have their APRs calculated for 12 payments a year. Their term interest rate is usually lower as they expect the payments to be drawn out over a few years. They can afford to set the rate low because of the longevity of the payback period. They earn their revenue over time.

An online loan is meant to collect over the short-term, therefore there are fees attached to the one and only set payment period. When the loan is extended, the interest will accrue for each following terms. The longer you keep out a short-term loan, the more you will end up paying. This extra payment is much larger than other creditors because of the higher term interest rate. These short-term loans are not set up to be kept out over a year's time. There is no credit check to rate a borrower's capability of making payments over the long-term.

Those people who do end up taking a year to pay off a short-term loan, misjudged their budget when applying for an online payday loan. As much as they can be helpful to people with a need for quick cash, they can be detrimental to those who do not consider the urgency for a fast payoff.

There are guidelines to be followed to not only protect the lender, but the borrower as well. Debt problems are tough enough to get out of with low interest debt, add on loans with high interest and a budget can be totally blown out of the water. Decide what money option is best for your long-term needs before you sign for a loan with any company.

Spotya! Payday Loans does not advocate using a payday loan for just any type of spending.

Jumat, 13 Juli 2012

Emergency Loans - Fast Cash Loans For The Middle Of The Month

With the middle of the month not too far away and one of the most expensive times of the year fast approaching, many people will be aware and worried about how they are going to be paying their household bills over the next couple of weeks prior to receiving their next salary. Of course the bills need to be paid and cannot be forgotten about, but just how does somebody keep up with the ever increasing monthly bills such as gas, electric and groceries?

Many people turn to a short term financial solution called an emergency cash loan, often referred to as a payday loan or cash advance. The great thing about these types of cash loans are that they enable anyone to apply for a loan online from £100 to £1,000 with minimal fuss and bother. Furthermore the short term cash advance can be approved and paid into your bank account the very same day you apply!

Whilst these kinds of loans are ideal for short term borrowing, such as a monthly period of time - these are not the best way of borrowing cash over a medium to long term period, where something such as a secured loan, logbook loan, unsecured loan or guarantor loan maybe a more beneficial way of borrowing cash due to the better interest repayments.

For shorter term cash loan needs, emergency loans would be a better option to consider - due to the quick, easy and hassle free way they are processed, with no paperwork to fax or post and no lengthy phone calls from lenders or forms to complete. The criteria you will need to meet in order to be considered for a cash advance or payday cash loan is very simple and straight forward:

- You must be a UK resident and 18 years or older

- You should be in employment and be paid your salary into your bank account

- You should have a take home salary of at least £750 each month paid into your bank account

- The bank account should also have a debit card facility connected

One thing people often worry about when applying for an emergency loan, is that if they have a poor credit history or had previous problems with credit - that they will automatically be rejected by the lender. This is certainly not the case and lenders encourage applications from people with poor to excellent credit histories. Even if you have had a CCJ previously, this does not necessarily mean your payday loan or cash advance application will be rejected.