healthcare services – Hospiceofhowardcounty http://hospiceofhowardcounty.com/ Mon, 13 Sep 2021 12:55:50 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 Loan Amounts May Snowball When Payday Lenders Sue Borrowers Local company https://hospiceofhowardcounty.com/loan-amounts-may-snowball-when-payday-lenders-sue-borrowers-local-company/ https://hospiceofhowardcounty.com/loan-amounts-may-snowball-when-payday-lenders-sue-borrowers-local-company/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://hospiceofhowardcounty.com/loan-amounts-may-snowball-when-payday-lenders-sue-borrowers-local-company/ That year, the $ 1,000 loan Burks took out in 2008 had become a debt of $ 40,000, almost all of which was interest. However, after ProPublica submitted questions to AmeriCash about Burks’ case, the company quietly and without explanation filed a statement in court that Burks had fully paid off its debt. If they […]]]>


That year, the $ 1,000 loan Burks took out in 2008 had become a debt of $ 40,000, almost all of which was interest. However, after ProPublica submitted questions to AmeriCash about Burks’ case, the company quietly and without explanation filed a statement in court that Burks had fully paid off its debt.

If they hadn’t, Burks would have been faced with a tough choice: file for bankruptcy or make payments for the rest of his life.

Judge Christopher McGraugh, who was appointed to the Missouri Associate Circuit Court in St. Louis last year by Governor Jay Nixon, came to the bench with 25 years of experience as a civil lawyer and criminal. But, he said, “I was shocked” by the debt collection world.

As in Burks’ case, expensive Missouri lenders regularly ask courts for judgments that allow loans to continue to grow at the original interest rate. Initially, he refused, McGraugh said, because he feared it would doom debtors years, if not a lifetime, in debt.

“It’s really a contract bondage,” he said. “I just don’t see how these people can come out from below [these debts]. “

But he was heard by lawyers for creditors, he said, who argued that Missouri law is clear: the lender has an unambiguous right to get a post-judgment interest rate equal to that of the initial contract. He studied the law himself and agreed. His hands were tied.



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Chattanooga Payday Loan King’s Syndicate Sidelined by New York Prosecutors https://hospiceofhowardcounty.com/chattanooga-payday-loan-kings-syndicate-sidelined-by-new-york-prosecutors/ https://hospiceofhowardcounty.com/chattanooga-payday-loan-kings-syndicate-sidelined-by-new-york-prosecutors/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://hospiceofhowardcounty.com/chattanooga-payday-loan-kings-syndicate-sidelined-by-new-york-prosecutors/ Ron Beaver, chief operating officer of the wages union, has his handcuffs removed as he appears in Manhattan Supreme Court on Monday. Photo: Jefferson Siegel / New York Daily News CRIMINAL DEFENDANTS IN THE PAY UNION • Carey Vaughn Brown – founder of the payday empire • Ronald Beaver – Chief Operating Officer • Joanna […]]]>


Ron Beaver, chief operating officer of the wages union, has his handcuffs removed as he appears in Manhattan Supreme Court on Monday. Photo: Jefferson Siegel / New York Daily News

CRIMINAL DEFENDANTS IN THE PAY UNION

• Carey Vaughn Brown – founder of the payday empire

• Ronald Beaver – Chief Operating Officer

• Joanna Temple – legal advisor

PAY UNION DEFENDANTS

• Account benefits

• Federal ACH

• Zone 203

• Cloudswell / Terenin / Basenin

• Credit payment services

• Credit protection deposit

• Envision Management Group

• Millennium Financial Concepts

• MonCashNow.com

• PaydayMax.com

• DiscountAdvances.com

• Owl nest

• Scenic City Legal Group

• Support Seven

Source: New York Supreme Court

CHARGES AGAINST THE DEFENDANTS

• Fourth degree conspiracy, one count, a class E felony

• First degree criminal usury, 38 counts, a class C felony

Source: New York County District Attorney


Of text
Carey Brown
Document

Indictment on salary

Seen

Money was only a means to an end. Former used car dealer Carey Vaughn Brown wanted to save souls, and money was the easiest way to reach the underdog of the world.

But it was how he made his money – $ 150 million in loan fees and interest in 2012 alone – that brought the payday lending king of Chattanooga to his knees and trapped two. of its closest collaborators and a dozen of its now closed. shell companies in what New York State prosecutors call a criminal conspiracy.

Brown, along with attorney Joanna Temple and COO Ron Beaver, each face 38 counts of criminal usury and one count of conspiracy for what Manhattan District Attorney Cyrus Vance has said. described as “operating practices – including exorbitant interest rates and automatic payments from borrowers’ bank accounts” which, according to the prosecutor, are “sadly typical of this industry as a whole”.

Loans made by MyCashNow.com, PayDayMax.com and DiscountAdvances.com often carried annual interest rates of 350% to 650% per annum, and sometimes over 1,000% annual rates, attracting some complaints from consumers who have alerted New York State officials. the existence of the union.

Investigators found that in 2012 alone, more than $ 500 million passed through a syndicate of more than a dozen companies that conspired to market, make and collect payday loans across the United States, while companies have knowingly violated usury laws in New York and other states. .

The crackdown on Brown’s defunct company is part of a larger battle in progress by state and federal authorities across the country to combat increasingly creative methods by payday lenders circumvent laws that restrict interest rates. Such methods include create companies on Indian reserves, remote tropical islands and even Canada, as well as inventing layers of shell societies to disguise their common ownership and functioning.

“I think the most important thing that is happening is this growing general concern about the harms of the payday loan debt trap, regardless of whether they are offered in a store or online,” said Diane Standaert, legislative advisor to the Center for Responsible Lending. .

Until prosecutors cracked down on his methods, Brown’s union regularly used the legal system to set up its own. attacks on employees who questioned Brown’s methods. Workers were regularly required to sign multiple nondisclosure, non-competition and non-denigration agreements, with severe and rigorously enforced penalties.

Brown’s legal team claimed his project was immune from state law because the conglomerate was operating on the internet and, on paper at least, from foreign shores. Those claims by Temple – which prosecutors said was now “false advice” – met warnings from New York officials, as well as cease and desist orders from other state attorneys general.

Brown, Temple and Beaver plan to challenge the New York charges. Beaver pleaded not guilty on Monday, Brown pleaded not guilty on Tuesday, and an attorney for Temple, who will be brought to trial on Thursday, called her client “a former prosecutor herself, a former judge and a well-respected member of the legal community.” .

“We believe that the advice she has given here is legally correct, fully appropriate, and does not violate New York law or any law,” said attorney Priya Chaudhry.

In fact, the “false opinion” portion of the indictment is a rather unusual legal concept, designed to suppress the defense that Brown was simply acting on the advice of his attorney, according to the defendants.

By indicting Temple and seizing what would generally be considered privileged correspondence between a lawyer and her client, prosecutors may suggest that her role was at the heart of any conspiracy and that she was much more than legal counsel.

Behind the scenes, the three defendants wrestled with whether they should obey New York laws and stop making loans well in excess of the legal maximum of 25% per year, given the risks of being at risk. taken with the powerful prosecutors who oversee the most important in the country. financial center.

According to documents obtained by New York investigators, the trio met in 2009 to “decide what to do in sensitive states,” including New York.

Temple advised Brown’s businesses to “continue to run the collections in New York with children’s gloves on and we’ll see where it goes,” although she has repeatedly worried whether prosecutors will eventually be able to. connect the dots to Brown.

She advised letting a borrower off the hook who complained to the New York State Attorney General because there was “no need to pinch anyone’s nose in a case where [we] got most of the money. “

In another instance, Temple advised others to stop having contact with a borrower because “there are currently two complaints with the New York attorney general for MyCashNow… again.”

But in the end, they did.

Brown’s business model was simple: Consumers would go to one of Brown’s websites, enter their bank account information, and with the click of a button, a small loan would be credited to their checking account. When the loan matured, usually every two weeks, Brown’s companies would automatically withdraw the required fees.

With the help of Temple and Beaver, Brown created a network of seemingly separate shell companies based in Bermuda, Canada, and elsewhere that actually functioned as a single unit to avoid state regulations and taxes.

The tangled web of relationships that linked its companies to each other, which a Times Free Press survey unveiled in 2011, has baffled state prosecutors for years.

In Tennessee, although he was told in 2011 that Brown was charging payday loan fees above the legal limit, neither the Tennessee Department of Financial Institutions nor Attorney General Bob Cooper ever took any public action to censor Brown.

Brown worked to rehabilitate his image in 2012, committing to donate $ 1 billion through its Covenant Values ​​foundation to fight teenage pregnancy, feed the homeless and care for AIDS victims. He supported the Chattanooga Area Chamber of Commerce, invested in local schools, and repaired homes in distress.

He has worked directly with major Christian charities such as Focus on the Family, Precept Ministries and the Dawson McAllister Foundation. He has appeared publicly with renowned philanthropist Hugh O. Maclellan, served on the board of trustees of Tennessee Temple University, and has personally traveled to help orphans in Africa.

Its websites were well designed, easy to use, and popular with consumers. Research by reporters found few complaints in Tennessee, and many customers expressed their displeasure when it was forced by banks under pressure from New York regulators to shut down in 2013.

Contact editor Ellis Smith at 423-757-6315 or esmith@timesfreepress.com with advice and materials.



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11 smarter alternatives to payday loans https://hospiceofhowardcounty.com/11-smarter-alternatives-to-payday-loans/ https://hospiceofhowardcounty.com/11-smarter-alternatives-to-payday-loans/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://hospiceofhowardcounty.com/11-smarter-alternatives-to-payday-loans/ PDaily loans are tempting when you need quick cash. They are easy to get and you get your money the next day. But high interest rates and short repayment terms mean that, more often than not, you are stepping into a deeper hole. Many borrowers find themselves unable to meet the payments and are then […]]]>


PDaily loans are tempting when you need quick cash. They are easy to get and you get your money the next day. But high interest rates and short repayment terms mean that, more often than not, you are stepping into a deeper hole. Many borrowers find themselves unable to meet the payments and are then charged additional fees, making it nearly impossible to pay off the debt. This can adversely affect your credit score, which in turn affects your ability to obtain other types of loans in the future.

If you are in urgent need of extra cash, we recommend that you avoid payday loans. Instead, try one of these alternatives.

Image source: Getty Images.


1. Look for ways to increase your income

Consider selling any items you don’t need for extra cash. If you work by the hour, you can also work extra shifts and enjoy the benefits of overtime pay. Or consider starting a side concert. If you can find a way to make some extra cash on your own, you don’t have to worry about getting into debt.

2. Negotiate a payment plan with your creditor

Creditors are often happy to work with you if you contact them and ask for more manageable repayment terms. For example, suppose you have taken out a $ 15,000 car loan from the bank and are struggling to make the monthly payments of $ 300. The bank may be willing to let you defer payment for a month or two until you get back on your feet. Or it can allow you to refinance the loan so that you only pay $ 200 per month over a longer term.

Whether or not the lender authorizes it depends on their policies and your repayment history. If you’ve been consistently behind on your payments for several months, you might find the lender less accommodating. That’s why it’s a good idea to contact as soon as you start having trouble making payments.

3. Draw on your emergency fund

Hope you hold a emergency fund So you don’t need to take out loans when unforeseen expenses arise. If you have enough in your savings, use it. This will save you money in the long run because all the money you pay it back is yours and you won’t lose any interest.

4. Borrow from friends or family

If your family and friends have the money to lend you and are confident you can pay it back, this is a smart way to go. Most family members won’t charge you any interest and are more willing to be flexible about repayment terms.

Make sure you discuss the details of the loan carefully beforehand and make sure both parties agree on the repayment terms, including interest payable. You should also talk about the consequences if you don’t pay back the loan on time. It’s a good idea to get a copy of these details in writing so that you both can refer to them later.

5. Request an advance from your employer

Not all companies allow employees to take an advance on their wages, so check your company policies. If this is an option for you, it is worth considering as you will not have to repay anything. But keep in mind that you won’t get your full paycheck on your next pay period.

6. Take out a personal loan

A Personal loan is a viable alternative if you have good credit and need to borrow a large amount (most lenders require a personal loan of at least $ 500). APRs can still be high, often ranging from 10% to 30%, but that’s still a steal compared to the outrageous 400% APR that some payday lenders charge. Plus, personal loans often give you anywhere from six months to five years to repay them, depending on the loan amount.

7. Take out an alternative payday loan (PAL)

An alternative payday loan is worth considering if you need to borrow $ 1,000 or less. PALs are offered by federal credit unions, and like payday loans, they are generally easy to obtain, regardless of the credit, and you get your money quickly. However, you must be a member of the credit union you have been borrowing from for at least a month before you can apply. The maximum interest rate is 28% and the repayment terms vary from one to six months.

8. Pay with a credit card

While this is not as risky as a payday loan, you will need to be careful not to overcharge your credit card as it can become a slippery slope. Credit card interest rates are often high, so you should avoid this method unless you are sure you can pay off the debt quickly. Look for a credit card with an APR below 20%, or better yet, an introductory APR of 0% so you have a window to make interest-free payments.

9. Borrow on your 401 (k)

This strategy can get back on you, so it should only be used if you are borrowing a small amount and are sure you can pay it back quickly. The advantage of borrowing from a 401 (k) account is that while you will have to pay it back with interest, that interest goes into your retirement account instead of in a banker’s pocket. Plus, you don’t have to worry about being turned down because of your credit.

But there are limits to what you can borrow. The maximum amount you can withdraw is 1) the greater of $ 10,000 or 50% of the account balance or 2) $ 50,000, whichever is less.

You have to pay back the money you borrowed from your 401 (k), with interest, within five years if you want to avoid being penalized. If you do not repay the amount owed during this period, the unpaid amount will be considered a distribution. This means that it will be subject to income tax, as well as a 10% early withdrawal penalty if you are under 59 1/2.

You can also borrow from your IRA if you have one, although it’s a bit more complicated.

10. Borrow against your life insurance policy

If you have whole life insurance, you can also take out a loan. The advantage of doing this is that you have your entire life to pay off the loan. If you don’t pay back the full amount, that’s okay, but the missing amount will be subtracted from your death benefit. Any money you borrow from your whole life insurance policy must be paid back with interest if you want to receive the full benefit, but interest rates are generally more affordable than what a bank or credit card will charge you – generally between 10% and 15%. %.

11. Consider credit counseling

Credit counseling won’t get you the money you need right away, but it can help you manage your finances better and pay off your existing debt so you don’t have to pay even more. A credit counselor will review your financial situation and work with you to develop a debt management plan so that you can pay off your debt over time.

If you are interested in taking credit counseling, be sure to choose a reputable company. Do some research to see what options are available, then check with your state attorney general or consumer protection agency that no complaints have been filed against them.

5 Simple Tips To Skyrocket Your Credit Score Over 800!

Raising your credit score above 800 will put you in rare company. So rare that only 1 in 9 Americans can claim to be a member of this elite club. But contrary to popular belief, getting a high credit score is much easier than you might imagine by following 5 simple and disciplined strategies. You will find a complete overview of each in our FREE Credit Score Guide . It’s time to put your financial future first and secure lifelong savings by increasing your credit score. Simply Click here claim a copy 5 simple tips to skyrocket your credit score above 800 .

The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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Upstart vs Sofi: which personal loan is right for you? https://hospiceofhowardcounty.com/upstart-vs-sofi-which-personal-loan-is-right-for-you/ https://hospiceofhowardcounty.com/upstart-vs-sofi-which-personal-loan-is-right-for-you/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://hospiceofhowardcounty.com/upstart-vs-sofi-which-personal-loan-is-right-for-you/ Our goal is to give you the tools and the confidence you need to improve your finances. While we do receive compensation from our partner lenders, whom we will always identify, all opinions are ours. Credible Operations, Inc. NMLS # 1681276, is referred to herein as “Credible”. If you are looking for a personal loan, […]]]>


Our goal is to give you the tools and the confidence you need to improve your finances. While we do receive compensation from our partner lenders, whom we will always identify, all opinions are ours. Credible Operations, Inc. NMLS # 1681276, is referred to herein as “Credible”.

If you are looking for a personal loan, you will likely come across Upstart and SoFi. Both companies offer flexible loans for a variety of purposes, but there are some differences to keep in mind when choosing between them.

Here’s a comparison between Upstart and SoFi to help you choose. Upstart and SoFi are both credible partners.

sofi personal loan
Fixed rates 6.46% – 35.99% APR4 5.99% – 18.83% APR
Amount of the loan $ 1,000 to $ 50,0005 $ 5,000 to $ 100,000
Loan conditions 3 to 5 years4 2-7 years
Min. credit rating 580 Do not disclose
It’s time to fund As quickly as 1 business day6 3 working days
Original fees 0% to 8% of the loan amount Nothing
Authorized co-signers No Yes
Returned $ 12,000 Check with the lender
Residence Available in all 50 states Available in all states except MS
Advantages
  • Options available for lower credit scores
  • Could be easier to qualify for
  • Higher borrowing limits
  • Coverage if you lose your job
All APRs Reflect Auto Pay and Loyalty Discounts, where applicable | Learn more about prices and conditions

Compare personal loan rates from
Upstart, SoFi and others
top lenders in 2 minutes

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Checking rates will not affect your credit


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Personal loans for beginners

Founded by former Googlers, Upstart’s artificial intelligence platform fully automates the majority of its personal loans. It has granted $ 6.9 billion in loans and notably offers loans to those whose credit is not perfect.

Upstart offers personal loans for a variety of uses, including debt consolidation loans, wedding loans, and more. You can borrow as little as $ 1,000 or up to $ 50,000 and expect quick financing.

Learn more: Personal loan vs credit card

Advantages

  • Lower minimum credit score: Upstart offers personal loans to borrowers with a credit score as low as 580. If you are looking for bad credit personal loans Where personal credit personal loan, Upstart might be a good choice.
  • No early repayment penalties: You don’t have to worry about fees if you prepay your loan.
  • Quick financing: If your request is successful, you will likely receive your money back in just a few business days. In fact, Upstart claims that 99% of applicants get their money back after just one business day.
  • Low minimum loan amount: You can borrow as little as $ 1,000 with Upstart, which could be useful if you only need a small loan.

The inconvenients

  • Maximum loan amount lower: With Upstart, you can only borrow up to $ 50,000. This could make it more difficult to finance larger debt consolidations or larger home improvements.
  • High assembly costs: With Upstart, you can pay origination fees of up to 8% of the loan amount.
  • No options for visa holders: Upstart does not offer personal loans for visa holders – you must have a social security number to borrow with this lender.

Check out our Upstart Personal Loan Review to learn more.

SoFi personal loans

SoFi offers a variety of financial products, including credit card consolidation loans and other types of personal loans. It also offers several benefits to its members, such as unemployment protection, career coaching and networking events.

With SoFi, you can borrow between $ 5,000 and $ 100,000. In addition, SoFi personal loans are offered free of charge.

Learn more: How personal loans impact your credit score

Advantages

  • Large loans: You can borrow up to $ 100,000 in unsecured funds with SoFi. This can be useful for home improvement loans, marriage loans and other major borrowing needs.
  • Discounts available: If you subscribe to automatic payment, you can benefit from a reduction on your SoFi personal loan. You might also get a discount if you use other SoFi products.
  • Benefits and advantages for members: As a SoFi member, you will have access to additional resources including financial planning, career coaching, and networking events. SoFi also offers unemployment protection in the event of job loss.
  • Options for visa holders: If you are a visa holder without a social security number, you can still benefit from a SoFi personal loan.

The inconvenients

  • Higher credit score requirements: You will need good to excellent credit for get a personal loan via SoFi. If your credit is poor or fair, you will likely need to consider other lenders.
  • Higher minimum loan requirement: You will need to withdraw at least one $ 5,000 personal loan borrow via SoFi. If you need a smaller loan, SoFi may not be the right choice for you.
  • Longer financing time: SoFi personal loans typically take a few business days to fund. If you need a faster loan financing time, you may have to look elsewhere.

See our SoFi Personal Loan Review for more details.

Choosing a lender for a personal loan

A personal loan could help you cover large or unexpected purchases. Before borrowing, it’s a good idea to shop around and consider as many lenders as possible to find a loan that meets your needs. Credible makes it easy for you: you can compare multiple lenders, like Upstart and SoFi, in two minutes.

Ready to find your personal loan?
Credible makes it easy for you to find the right loan for you.

  • Free to use, with no hidden costs
  • A simple form, easy to complete and your information is protected
  • More options, choose the loan option that best suits your personal needs
  • Here for you. Our team is here to help you achieve your financial goals

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Checking rates will not affect your credit

Keep reading:

4The full range of rates available vary by state. The average 3 year loan offered by all lenders using the Upstart platform will have an APR of 24.4% and 36 monthly payments of $ 36 per $ 1,000 borrowed. There is no deposit or early repayment penalty. The average APR is calculated based on the 3-year rates offered in the last month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

5This offer is conditional on final approval based on our review and verification of financial and non-financial information. The rate and loan amount are subject to change based on the information received in your complete application. This offer can only be accepted by the person identified in this offer, who is old enough to legally enter into a Extended Credit Agreement, a U.S. Citizen or Permanent Resident and Current Resident of the United States. Duplicate offers received are void. Closing your loan is conditional on you meeting our eligibility criteria, verifying your information, and agreeing to the terms and conditions on the website www.upstart.com.

Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be eligible for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $ 7,000. The minimum loan amount in Ohio is $ 6,000. The minimum loan amount in NM is $ 5,100. The minimum loan amount in GA is $ 3,100.

6If you accept your loan before 5 p.m. EST (excluding weekends or holidays), you will receive your funds the next business day. Loans used to finance education related expenses are subject to a 3 business day waiting period between loan acceptance and funding in accordance with federal law.

About the Author

Miranda Marquit

Miranda Marquit

Miranda Marquit is an authority on mortgage, investment and business. His work has been published on NPR, Marketwatch, FOX Business, The Hill, US News & World Report, Forbes, etc.

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Here’s everything you need to know regarding payday loans https://hospiceofhowardcounty.com/everything-you-need-to-know-about-payday-loans/ https://hospiceofhowardcounty.com/everything-you-need-to-know-about-payday-loans/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://hospiceofhowardcounty.com/everything-you-need-to-know-about-payday-loans/ Even if your finances are well managed, you may find yourself in financial trouble. It could be due to loss of activity, unexpected car breakdowns, or health emergencies. A payday loan is the best option in such circumstances. It can save you from financial problems. What is a Payday Loan and an Unsecured Loan? PaydayNow online […]]]>

Even if your finances are well managed, you may find yourself in financial trouble.

It could be due to loss of activity, unexpected car breakdowns, or health emergencies. A payday loan is the best option in such circumstances. It can save you from financial problems.

What is a Payday Loan and an Unsecured Loan?

PaydayNow online lender will provide you with a payday loan (also known as an unsecured loan) but no collateral. A payday loan is different from other types of loans, such as personal loans or business loans. However, the lender will provide you with security to verify your loan. Payday lenders offer loans to pay for your immediate expenses and hope you’ll be able to repay them as soon as possible.

What are the terms of a personal loan

Payday loans have simple terms. You will borrow the money, and then pay it back with your next payment. The majority of money lenders require that you write a check equaling the principal amount and the interest. Your lender will use your post-dated check as collateral. They will then loan you the money. You can prolong the repayment period by consulting your lender but interest rates will rise.

What are the benefits of a payday loan?

Here are some benefits to consider before you apply for a payday loan.

  • Approval can take a few hours.

You will only need to provide some information in order to apply for a payday advance. Your loan approval will be quicker if you can provide the information as soon as possible. A payday loan is approved in just a few hours. Personal loans typically take around a week to approve. You will receive the money the day it is applied for and can make the most of it.

  • Credit checks are not required.

Low credit ratings are a major reason why loans are denied every day. You don’t need to be worried because payday loans are approved without any credit checks. Paying off a payday loan in a short amount can help improve your credit score.

  • Convenient application process

You don’t need to visit a bank to apply for a payday loan through sites such as cobra. Simply complete the online application form. This process can be completed online from your office or home. You will receive an approval message within a few hours.

Payday loans have many benefits. You can use the money for many purposes. You can use the money to pay off debts, finance home renovations and cover unexpected expenses.

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How to spot a loan that can bring you down: 6 red flags https://hospiceofhowardcounty.com/how-to-spot-a-loan-that-can-bring-you-down-6-red-flags/ https://hospiceofhowardcounty.com/how-to-spot-a-loan-that-can-bring-you-down-6-red-flags/#respond Tue, 09 Mar 2021 11:34:59 +0000 https://hospiceofhowardcounty.com/how-to-spot-a-loan-that-can-bring-you-down-6-red-flags/ Image not available Risky loans – deals that can ruin financial lives – have not gone away with the recession. Broken auto loans, home loans, payday loans and loan scams continue. The economic crash, fueled by risky loans, should have convinced us to be careful. But the memories are short. So here are six red […]]]>


Image not available

Risky loans – deals that can ruin financial lives – have not gone away with the recession. Broken auto loans, home loans, payday loans and loan scams continue. The economic crash, fueled by risky loans, should have convinced us to be careful. But the memories are short. So here are six red flags that should alert you to back off and four tips for safe borrowing.

The fundamentals

But first, a rule of thumb: Anyone considering a loan – whether it’s a home loan, car loan, or personal loan of any sort – should consider it. carefully, says Sam Gilford, spokesperson for the Federal Consumer Financial Protection Bureau.

“Consumers should make sure to thoroughly review the terms of any loan before signing on the dotted line, considering alternative options and asking questions about anything they don’t understand,” he said. he stated in an e-mail.

Here are six signs of a risky deal:

Red flag 1: “No credit? No problem.’

Ads promising “No credit?” No problem ”,“ We ​​never say “No” and the like are certainly tempting when you’re short on cash and looking to find your way out of the basement of your credit score.

But think about it: legitimate lenders take the risk of lending money. To make sure you will pay it back, they dig into your credit history, ask you to complete an application listing your assets, debts, expenses, and sources of income, and verify each of your claims. They will also get your permission to remove your credit score.

When a lender isn’t interested in all of this, you’re looking at some trouble – maybe a scam.

Red flag 2: interest periods only

A loan that begins with a period of several months or years in which you only pay interest may seem like a good deal because the payments during that period are smaller.

The problem is, after all of the payments you’ve made during the interest-only period, you’ll still have the entire loan to repay. You are no closer to owning your car or home than you were before and you are still obligated to get the loan.

Red flag 3: Revisable tariffs

Variable Rate Mortgages (ARMs) were a dirty word when ARMs with risky features led millions of homeowners to default as the Great Recession approached. Homeowners accepted ARMs on the assumption that they could refinance or sell when their interest rates increased. But millions of people found themselves stranded when they couldn’t refinance because they lost their jobs or the value of their homes fell to less than the value of mortgages. The United States saw nearly 6 million foreclosures between 2007 and 2015, according to RealtyTrac.

There are good uses for variable rate mortgages. Sophisticated borrowers can, for example, use them for the short term when they have better use of their own money. But it’s risky unless you have the money to pay off your ARM as soon as the rate starts to rise.

Red Flag 4: Super Long Loans

Borrowing is about affordability. Reducing your monthly payments could give you a better home, buy the new car or truck you’re interested in, or just make it easier for you to breathe each month. It is therefore understandable that a 40-year mortgage or seven year vehicle loan would look attractive.

Longer loans reduce your payments a bit by stretching them over several years. But you are paying through the nose for the lien, and the payouts aren’t much smaller. Ask the lender to break down and compare the costs so you can see how much more you would pay for a longer loan. A very long term loan is better than an interest-only loan, but not by much since most of your monthly payment goes to interest rather than equity – your ownership share of the property.

Red flag 5: advance of costs

Simply hang up if you receive a phone call offering you a loan (or “grant”). It is illegal for US businesses to promise credit cards or loans over the phone and require payment up front. Calls like this probably aren’t from lenders anyway. It could be a scammer trying to convince you to send an initial “fee” or “deposit”. You then have to wait for the loan to arrive. And wait, and wait….

Rule of thumb: don’t pay any fees until you have the loan money in your hands.

Red Flag 6: Payday Loans

Payday loans are expensive short term loans with some risky features. Typically, you give the lender a post-dated check for the amount you borrow plus fees, to be taken from your next paycheck. Failure to repay on time leads to increased fees and interest which push some borrowers into deep debt.

Warning features include:

  • Astronomical interest rates: On average, short-term payday loans charge an APR of 391% (annual percentage rate), according to the Center for Responsible Lending (CRL). In comparison, The Money Talks News Credit Card Center shows credit card rates ranging from about 10 percent to 20 percent. APRs on personal loans can be cheaper.
  • Fees that accumulate: Payday lenders cater to people in financial difficulty. If you are late or your check is bad, you can accumulate fees, resulting in more debt than your original loan.
  • Repeat the loan: Borrowers who cannot repay a loan when it is due often get new loans, resulting in a cycle of debt that buries them. “Payday loan stores are collecting billions of dollars in interest and fees on a product designed to force borrowers to renew their loans,” says CRL.
  • Collection practices: Payday lenders vary, but the worst have a reputation for harassment and relentless collection practices.

Some states prohibit or regulate payday loans. However, 32 states “allow payday lenders and allow loans on the basis of checks drawn on consumers’ bank accounts at triple-digit interest rates, or no rate cap at all,” according to the Consumer Federation of America. Find the status of your state on this CFA card.

4 safety tips

Have you encountered these or other red flags when shopping for loans? Share with us in the comments below or on our Facebook page.

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