Money News Blog

Payday Loan Video Warning

2007-06-09T17:01:00.000-07:00

Payday Loan Video Warning
I put this video together on Youtube in hopes of reaching a younger audience. The young families are the folks who need financial education the most. If you know any young people who may not have the benefit of poor past experience with debt, please forward to them.

CFA Warning - Payday Loans Online

2007-05-19T16:49:00.000-07:00

The Consumer Federation of America put out a warning to users of payday loans to be extremely careful with payday loans online. We'll have more information in a later online payday loan blog report.

The gist of the warning about online payday loan service stems from a survery of 100 online payday loan companies.

CFA found that rates can be as high as $30 per $100 borrowed and must be repaid or refinanced by the the borrowers next payday. If a payday is in two weeks, a $500 loan costs $150 and $650 will be taken out of the borrowers checking account on payday.

Take a seat and really think about whether the $500 now, is worth $150 bucks in order to get it. You really need to have a financial emergency to justify the expense of the online payday loan.

Payday Cash Advance Loans Interest Can Exceed Two Thousand Percent!

2007-05-16T11:55:00.000-07:00

Payday Cash Advance Loans Interest Can Exceed Two Thousand Percent!

The San Francisco Chronicle ran a payday cash advance loans warning article March 23, 2007. The article discusses the results of a survey by the California Reinvestment Coalition which indicates that many California consumers are receiving misleading information from payday lenders regarding interest rate charges on payday cash advance loans.

Interest rates for payday lenders came in at a 460% average for payday cash advance loans. Charisse Ma Lebron, a coalition spokeswoman, was quoted as saying, California's laws are too lenient, considering that 1.5 million households use this service every year."

According to The San Francisco Chronicle: Mark Thomson, a spokesman for California Financial Service Providers, the trade group for payday lenders, acknowledged that many lenders aren't complying with state disclosure requirements. But he said things are improving. "State regulators have been doing exams (of payday lenders) for about a year and have done about one-third of lenders' locations," Thomson said. "In most cases, the licensees respond that they can fix the problem. In cases where they don't comply, we support strong enforcement by the regulators."

Avoid payday cash advance loans, without knowing the fees and annual percentage rates that you are going to be paying.Always remember rolling existing payday loans can be a disaster financially. Please always borrow responsibly.

If you take a payday cash advance loan, please only borrow what you will be able to pay back when you get paid from your job and still have money to get through the month.

Want to get Rich? Stay Away From Debt!

2007-05-15T07:32:00.000-07:00

There are many ways to make money and prosper financially. But when you are just getting your financial foundation solidified, there are a few core items like avoiding quick cash loans that need to be addressed so you prosper financially down the road.

1. Stay OUT of debt. You can't grow your financial net worth if you continue to owe.

2. Save something every month and buy solid stocks that pay dividends.

3. Diversify the stocks by industry and always reinvest the dividends and interest.

4. Do not waiver. The key is the consistency.

5. Consider a precious metal such as gold under the assumption that the dollar will continue to weaken.

These are very basic rules for getting your finances under control.

Never, ever, ever take payday loans, without knowing the APR and fees that you are going to be paying. Always remember that rolling existing payday loans can be a disaster financially.

Please always borrow payroll cash online responsibly. If you take a payday loan online, please only borrow what you will be able to pay back when you get paid from your job and still have money to get through the month.

Default Payday Loans - Always THE Last resort

2007-05-12T08:35:00.000-07:00

Fast Default Payday Loans - When You Should Wait and When You Should Borrow
A fast cash loan should be an option used as a last resort to avoid a financial emergency. With its interest rates, only borrow as much cash as you can pay back.

This might be one of the hardest parts. When you're applying for a cash loan, and you know you'll be out of diapers before your paycheck comes, it's so tempting to add a few bucks of spending cash to the credit line.

Stop yourself right there. Ask yourself a few questions.

Do I need this money right now?
Will I spend the money immediately on something that is necessary?
Can I do without the money by conserving my resources?
Will I actually use the money on this excuse, or will I end up blowing it on something frivolous?

Can you wait for the extra money? You probably can. It's nice to have everything you want without waiting for it, but it will save you a lot of money if you just hold off until payday.

Will you spend this money immediately? If you want to advance an extra thirty bucks so you'll have enough to for gas on Friday, you should reconsider. If you know for certain that you'll need it, fill your tank on the way home. Don't carry the extra cash in your pocket, because you're likely to spend it on something else.

Can you find another way to get by? Most of us are surprised by what we can accomplish when we're strapped for cash. Use only half the soap for laundry loads. Buy the cheap hotdogs for supper tomorrow, and reheat last night's meal for tonight. But don't use credit.

The rising cost of living can force you sometimes to overburden your pocket with loans. It may solve financial issues for the time but it delays the inevitable.

Are you really going to spend the money on what you think you're borrowing it for? Cash is hard to hold on to. You know your habits. If you've blown the grocery money at a restaurant before, then don't borrow it.

Don't let the late penalties kill you.

You've followed good sense and only borrowed what you needed. You skimped by on as little as possible, and now your pantry and gas tank are empty. You want to stop at the bank, cash your check, and buy a few things before going to the loan company to take care of your advance.

Here's where you'll make your biggest mistake. When you have your paycheck, go straight out and pay off that loan...all of it. The groceries can wait. The movie rentals can wait. Your only concern should be to get out of debt. And Fast.

Online Payday Loan: More Than What You Bargained For?

2007-05-11T07:31:00.000-07:00

I found a very insightful article on the web by Central Illinois Proud which is exactly what we've been discussing here. If you live in Peoria, Illinois you may have seen it.

The article titled Payday Loans: More Than What You Bargained For? quotes Bonnie Bakin of the Better Business Bureau as saying, "The problem with many of the payday loan concepts is people take the money and find out that they can't pay it back in a timely manner".

Key points come from the article are the following:

They suggest shopping around for the best and lowest interest rates.

Be sure to find out what your responsibilities are in the transaction.

Of course, always read your contract carefully. If there's something in it you don't comprehend, don't sign it until the lender explains it to you.

Don't take out the loan if you can't pay it back because the payday lender can take money out of your paycheck, take you to court... and ultimately, you could end up in jail.

Always be sure you can pay back your loan if you are going to get a payday advance

Study: Poor drawn to payday loans

2007-05-05T10:20:00.000-07:00

On April 20, 2007 The Washington Times ran a UPI story discussing a recent Canadian payday loan usage study. The study helps confirm my original thought which is that most young families don't have the options or education about finances to avoid payday loans. Young families truly have no where to turn for credit when traditional options have run out. They also don't have the education to be able to analyze the negative consequences of high rate compound interest.

The article is pasted below.

Study: Poor drawn to payday loans

Low-income Canadian families are twice as likely to use "payday loans" as those with more financing options, a government report said Friday. Statistics Canada said families with $500 or less in the bank were 2.6 times more likely to have used payday loans than those with between $2,000 and $8,000 -- even though payday loans have high, often undisclosed fees and interest-rate charges of 335 percent to, in some cases, 650 percent, the report said.The short-term loans require no credit check and typically involve amounts of $100 to $1,000.Almost half the families who used payday loans reported they had no one to turn to if they faced financial difficulty, said the report, published in the April issue of Perspectives on Labor and Income. Thirty-two percent of non-payday-loan users said they had no one to turn to when they are strapped. Some people use payday loans "because they live in a community that is underserved by mainstream financial institutions," the report said.Without payday loans, some consumers might be led "to less desirable credit options such as loansharking and organized crime," the report said.

Clearly there are many tough issues surrounding access to credit for lower income citizens. The major financial institutions have left a credit void for these folks. Payday lenders are helping fill that void. While the situation isn't ideal given the expensive financing, no fax payday loan no employment verifition are available.

Fast Cash with out a Payday Loan on Squidoo

2007-05-03T12:00:00.000-07:00

If you have not had a chance to check out my new Squidoo page, check it out. Its fast cash with out a payday loan focus will augment what we are doing here.

There are Alternatives to Online Payday Loans Cash Advances

2007-05-03T11:56:00.000-07:00

March 13, 2007 The Chicago Sun-Times ran an editorial related to payday loans with an interesting perspective about online payday loan cash advances.

We all know that payday loans are expensive short term financing alternatives but no one looks at the APR for a $26 late fee on a $100 credit card bill. NSF charges by banks and retailers can be outrageous on returned checks. Additionally, if your utilities get shut off and you have to pay the $50 reconnect fee. What is the APR on that $100 past-due account?

Payday loans may not be the cheapest source of cash but in many circumstances, it can be the cheaper alternative. If you find that you are in a bind, you are looking for an Online Payday Loan Cash Advance, please borrow responsibly.

Fast Cash Advance Loans are Bad Deals!

2007-05-03T10:52:00.000-07:00

Michelle Singletary in her Washington Post website column The Color of Money, writes about quick cash advance loans:

"Payday loans are small loans (usually $ 100 to $ 500) that a borrower promises to repay out of his or her next paycheck, typically in two weeks. Fees charged for payday loans are usually a percentage of the face value of the loan. For example, if someone wanted to borrow $ 500, the fee might be 15 percent ($ 75)."

"Consumer groups complain bitterly that payday loans are an extremely bad deal because they carry high fees that, when annualized, amount to triple-digit interest rates. In many cases, if borrowers cannot repay the loans, they are allowed extensions -- for additional fees. Then they are charged even higher rates of interest."

She goes on to comment about Clark Howard who runs a consumer website and states, "Stay away from 'pay day loans!"

Ms. Singletary goes on to describe Clark's background in the matter: Clark recently had the privilege to testify before a legislative committee that is considering enacting a "pay day loan" statute. 'Pay day loans' are high-risk loans that people take out to tide them over until pay day. They anticipate being able to pay the loan back after pay day. But the interest rates are so high - typically 300 percent and higher – that it starts a vicious cycle and consumers get more into debt each time. These loans have been banned in several states already because they are so damaging and because there are no regulations in the industry. "Clark thinks the marketplace should determine what rates should be, as is the case in the credit card industry. About 17,000 soldiers have taken out pay day loans and, as a result, they could not serve overseas. Taxpayers paid money to train those military personnel and it was basically a waste because the soldiers were too financially strapped to be deployed. If you have taken out these kinds of loans in the past, STOP. If you have family members in the military or in emergency services fields (police and firefighters), find out what kind of loans they've taken out and help them make good choices. We have to watch out for each other when it comes to these kind of loans, which are also known as cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans."

Always remember rolling existing payday loans can be a disaster financially. Please always borrow responsibly.

If you apply for fast cash advance loans, please only borrow what you will be able to pay back when you get paid from your job and still have money to get through the month.

Would it make a loan shark blush?

2007-04-27T08:40:00.000-07:00

Payday cash advance loans have gotten many consumers in trouble. The city attorney of San Francisco is fighting back!

SAN FRANCISCO 'Payday loan' firm sued by city attorney

San Francisco Chronicle (CA)April 27, 2007
Author: Heather Knight

San Francisco City Attorney Dennis Herrera sued storefront lenders Check 'n Go and Money Mart on Thursday, accusing them of violating state fair business practices law by marketing short-term installment loans and charging exorbitant interest rates.

The institutions are licensed to provide "payday loans", in which borrowers -- usually low-income families living paycheck to paycheck -- give the lender a post-dated check in exchange for cash.

But the lawsuit charges that Check 'n Go illegally offers short-term loans for up to $1,500 with annual percentage rates exceeding 400 percent. Check 'n Go has questionable arrangements with online affiliates and First Bank of Delaware, also named in the suit, to skirt state law, the suit alleges.

According to the complaint, Money Mart marketed an identical loan in association with First Bank of Delaware until earlier this month, when the company quietly ended the practice in its storefront locations.

Company marketing materials, however, indicate Money Mart plans to launch an Internet version of the same product later this month, according to the complaint. Neither Check 'n Go nor Money Mart is licensed to provide short-term loans or offer installment loans in the same place of business as payday loans.

Herrera's complaint says the two institutions are engaging in bait-and-switch marketing practices that constitute deceptive advertising.

The schemes, Herrera says, "would make a loan shark blush."

Click here for more payday loan cash advance news.

Please only borrow what you will be able to pay back when you get paid from your job and still have money to get through the month.

Rolling existing payday loans can be a disaster financially.

Please always borrow responsibly.

Avoid by Default Payday Loans - Debt Elimination Tools

2007-04-25T13:30:00.000-07:00

I searched all over the web to find a good debt elimination tool to avoid default payday loans. Reducing debt is the first step to getting back on your feet financially. Once you work down your liabilities you can begin to focus on turning your savings into more savings. Remember to only apply for payday loans in serious financial circumstances.

Fast Cash Loans Don't "Pay"

2007-04-25T13:08:00.000-07:00

Michelle Singletary of the Washington Post nails it on fast cash loans. Keep reading below.

Payday Loans: Costly Cash
By Michelle Singletary
Sunday, February 25, 2007; F01

The Community Financial Services Association of America, the national trade association for payday lenders, says its $10 million advertising campaign is intended to educate people on how to use payday loans wisely.

But more often than not, any use of payday loans is unwise.

Payday loans are small loans that a borrower promises to repay out of his or her next paycheck, typically in two weeks. A $100 loan might carry a fee of $15.

Consumer advocacy groups are highly critical of these loans because when the fees are annualized, they often amount to triple-digit interest rates -- even more than 1,000 percent in some cases. The groups argue that the loans take advantage of cash-strapped consumers.

Last week, the payday-lending trade group announced its ad campaign.

"This is a public relations act from an industry under heavy fire," says Jean Ann Fox, director of consumer protection for the Consumer Federation of America. "This is a move to derail state and congressional legislation."

Payday lenders were banned from Georgia in 2004, although lawmakers there are considering letting them back in. Other state legislatures are considering restrictions on payday loans. Last year Congress passed a law forcing the industry to cap at 36 percent the annual interest rates on loans to military-service men and women and their dependents.

Industry executives say their multimillion-dollar campaign is not an image booster. Rather, they call it an effort to encourage consumers to use payday advances in a responsible manner. They argue that payday loans are the more affordable route for people who find themselves in desperate need of money.

"If it only cost $10 to bounce a check, I'm not sure we would have nearly as big a payday loan industry," says Don Gayhardt, president of Dollar Financial, a payday lender. "Payday loans are not predatory. We enhance the economic well-being of people."

In fact, to show its commitment to helping people, the trade group is asking members to voluntarily implement new practices. The most notable is an extended payment plan for those borrowers who cannot immediately repay their loans. At no cost, borrowers would be allowed to repay loans over four extra pay periods. For example, if a customer is paid every two weeks, he would get an additional two months to pay off the loan. If paid monthly, he would get an additional four months.

I have no doubt the media campaign will be successful. The ad I viewed, which features Darrin Andersen, president of the CFSA, has soft music and shows a child with his arm in a sling and a man on the side of the road with a car obviously in need of repair. The subliminal message: If you need money to fix your kid's arm, we're here for you. If your car breaks down and you don't have cash, come to us.

Andersen advises that people should use payday advances only for unplanned short-term expenses. Borrow only what you feel you can comfortably repay, he says.

As the commercial plays out, we hear a woman's soothing voice saying, "Always use payday advances responsibly."

Using a credit card to buy things you can't pay off the next month is bad enough, but to borrow against your next paycheck is the very definition of irresponsibility. It's an incredibly unwise financial move.

Unbelievably, several minority groups have partnered with the CFSA to promote financial literacy. Why would they do this, I wondered, especially when so many payday storefronts are located in economically depressed minority neighborhoods?

Well, it turns out there's money in it for the minority groups.

The CFSA is giving about $2 million to fund financial literacy programs for two groups, said its spokesman, Steven Schlein.

The trade association is partnering with the National Conference of Black Mayors to host summits "to teach young people the importance of building a solid financial future." I certainly hope it's a future that never involves a payday loan. The CFSA also is teaming up with the National Black Caucus of States Institute. As the trade group says in its news release, the partnership will "educate African-American legislators and community leaders on critical issues regarding consumer credit, and provide community volunteers with resources they need to educate consumers in their communities on how to become credit savvy."

Clearly, the savvier one is the payday industry.

What better way to try to fend off regulation than to partner with minority groups supposedly looking out for the very people their opponents say the industry is taking advantage of?

But the payday lenders are right about one thing. They are providing a service the people want. Just last month 15 million people took out payday loans, Gayhardt said.

"I think consumers understand the bargain they get with a payday loan," he said.

But, you know, not every bargain is a good buy.

Be sure to log into Michelle's blog and subscribe to her eblast. She has very insightful comments related to personal finance

If you apply for a fast cash loans please only borrow what you will be able to pay back when you get paid from your job and still have money to get through the month.

Money Blog News for Payday Loans Online

2007-03-26T08:23:00.000-07:00

Welcome to Money Blog News an educational money site to help you with your financial life. The primary mantra is the avoid by default payday loans online.

Let's start with the basics.

Rule #1 Payday Loans = Costly Cash.

Avoid payday loans at all cost. Here's a few tips on how to avoid them.

Consider a small loan from your credit union, an advance from your employer, a loan from family/friends or perhaps a cash advance on your credit card. Know the terms before you pull the trigger.

Always compare the APR and finance charge for your credit options and go with the lowest cost.

Always ask creditors for an extension on your payment but be sure to find out if there are extra charges for paying late.

Do your best to track your current income and spending. Most of us spend more than we bring in because we buy items we don't need. See what you are wasting money on and stop doing it.

Always check to see if you have overdraft protection on your checking account. It can help but you need to know the terms.

Consider contacting a local consumer credit counseling service if you need help working out a debt repayment plan. Many of these services are very cheap or cost nothing at all.

If you find that you must borrow from a payday lender, please only borrow what you can afford to pay with your next paycheck and still have enough money to get to the next pay day.

Clearly payday loans can be very dangerous to your financial well being. The FTC is doing what it can to educate folks about the danger.

Always remember that if you take out payday loans online, please only borrow what you will be able to pay back when you get paid from your job and still have money to get through the month.

Rolling existing payday loans can be a disaster financially. Please always borrow responsibly.