Payday Loan Providers Focus On Debit Card History, Will Others?

Best payday loan providers understand how bank account management is an important piece of the money management puzzle. It is too often ignored by other lenders and creditors while they focus on credit check data instead. So much emphasis is placed on credit card usage and management that those who choose not to use them end up ignored. There is no acknowledgement for debit card management skills, at least not yet.

People have been managing household finances for many years on limited or no credit card use at all. Some people prefer to pay cash and don’t want anything to do with the plastic debt traps. Other people lost their ability to use credit by either misusing it or mismanaging the debt portion. Now that most bank debit cards may also be used as a credit cards, credit challenged people have access to much of what the credit users of the world has had at their fingertips. There is no fear of debt problems or accumulated interest. Debit cards pull payment directly from your bank account. If you don’t have money to cover the payment you will receive overdraft charges and merchant NSF fees.

For those who use debt cards because of credit challenges, this bank information helps to represent their most current money management activity. Credit bureaus do not use this information to help rebuild a fallen score. Popular financier, Suze Orman, wants to change this. She is on a crusade to get debit card use included in the equation to help build financial security. She has an uphill battle ahead of her. So far, her petition to make a change has over 175,000 supporters.

There is doubt that Suze Orman will ever make headway. Credit scores were created to help lenders make better decisions. Credit cards reflect how a person manages third party money. Debit use reflects how people manage personal money. The President of Consumer Education, John Ulzheimer, holds a different opinion of debit card use than Suze Orman. He believes that the only similarity of debit and credit cards is how they look. In many ways he is right, debit cards are not liabilities. A user has no outstanding obligation other than to their personal money matters. It will be interesting to see the two sides play out during this exploration.

In the meantime, those who remain credit challenged will still have easy access to fast cash payday loans. Applicants will have to own a working bank account and no credit checks will be processed for loan approval. People will continue to seek out budget relief while they work on rebuilding credit scores.

It’s good to have options. Since bad debt management will stay on credit history for 7 years or more, it feels good to know that there is help beyond creditors. Use the loans wisely as any defaulted loans will only further hurt your credit history. With a fast payment demand, it is important to consider all other debt obligations before applying. How much can your next paycheck cover once the payoff has been made? Many borrowers will once again obtain a new loan to make their budget work. Repeated loans equate to mass finance charges. Before you take out any kind of loan or use credit, think ahead. Question how your budget will handle the effects of paying off the loan plus fees in full without having to borrow once again.

Keep your bank accounts running smoothly and look to improve your credit history. You never know when you may need a good score. Develop a plan to keep your obligations to third party lenders. Maintain the health of your bank account and rebuild your credit to develop a secure financial future.

Payday Loan Companies Facing New Postal Competition

When using payday loan services, an applicant must have an active bank account. For those millions of people who do not use banks to hold their money, it would be tough for them to acquire a fast payday loan. A storefront service will expect a signed check to hold for payment on due date. An online service uses bank transfers and debits to process their loans. How would anyone without a bank account get fast cash? The post office believes they have an answer to service customers who use short-term loans or have no bank account.

The USPS will offer ‘Postal Loans’ to help people save money on fees. This doesn’t mean that there are no fees attached, but the postal service does believe that it would be better than what folks pay into payday lender companies and cash check services. It’s one more option for those who need a money boost.

As it stands, people who do not have a bank account but do work for a living need to cash their checks somewhere. Cash checking services are done with a fee and some places even offer a savings type account to hold money instead of carrying it around with you. It’s a safe way to protect your earnings but none of it is free. The USPS would like to offer a prepaid card to consumers who have their paycheck directly deposited onto that card. A postal loan would be limited to half the amount deposited onto that card. What about the fees? How will the USPS get paid for their service? Payday loan lenders make their fees known upfront. The service has been around long enough that most people at least have a basic understanding of how it all works.

Every person who takes out a postal loan would have to pay 5% until that loan is paid off. It sounds very reasonable and the idea of the loan would help many people save lots of money on finance charges. The trouble lies with the inability to make good on the loan. Payday lenders fight that fight every day. There is no direct access to a person’s paycheck, only the ability to collect by debiting their account. If the money is not in a bank account, a direct lender will have to continue to try, add more fees and work something out with the borrower that both parties can agree upon. The USPS will have access to a person’s full paycheck. If the loan is not paid as contracted, the USPS can automatically withhold the payment from the direct deposited paycheck and place whatever is remaining of their paycheck onto the card. Borrowers will pay no matter what without a chance to work something out.

Banks and credit unions offer similar services as well. Their rates are lower than typical direct lenders and people tend to trust the institutions more. The idea of alternative options is wonderful. Let the people decide. It is interesting to point out that three major banks have already decided to pull out of their payday loan offers. The hassles accompanied by them from regulatory problems to customer complaints and payment troubles are more than they bargained for. It seems that people still run into trouble and with first access to paychecks with the ability to collect, borrowers continue to have trouble. Consumers lose control over their paycheck. When a borrower used a payday loan service, they keep the control with a higher finance charge.

Money management is ultimately up to each borrower. They will need to use a service which will work best for them. The postal loan, once it becomes active, will help those customers without a bank account. The actual postal loan is yet to be determined as far as how borrowers will review the services.

Use A Payday Loans Direct Lender to Make A Positive Change

Credit challenged borrowers struggle when trying to get help for an unbalanced budget. What happens when there is a pressing need for fast cash and credit cards are no longer useful? Many people seek the help from a best payday loans direct lender when there are no friends or family to turn to. A short-term loan is not necessarily a favored option because they do carry a high interest charge and can be a struggle to pay back. The fact that there is an option at all is what makes these loans favorable. Sometimes people just need an open door to turn their finances around and a payday loan does the trick.

Just because these loans carry a high interest charge does not make them a poor choice. Don’t ever go into one blindly. It is very important to ask all the questions directly to your payday loans lender so you understand what kind of fees you will face when paying the money back. If you go by only what you have heard from other borrowers, you may get the wrong impression or go into the loan with a distorted view. Get the real facts for yourself.

A responsible direct payday lender will have a professional staff to help you understand the process. Make a list of questions at home and bring them with you so you don’t forget one. Your whole purpose to apply for a short-term loan is to take advantage of an alternative money option when credit challenges closed the others. These loans are small, based on your total monthly take-home income, in order to make them affordable. This does not mean that it will be easy to pay it back. You have to consider your current finances as well as project into the following months to figure out a plan to pay it back. Think positively, you will have the best results that way.

You can grumble about the fast payoff or you can be thankful to have the opportunity to get fast cash. This lender is not what put your finances into a credit challenged position, but this loan could prevent you from making it worse. In order to take full advantage of this opportunity, you will want to make every effort to get it paid back as soon as possible. It can be your gateway to a financial second chance.

What do you need to know before you use a payday loans direct lender?

1. How much money can I borrow?

2. What are your fees?

3. Do you have payment options?

4. What happens if I cannot pay?

It is always good to know the consequences just in case some other money emergency pops into your life and the payday loan payment must be placed on hold. You have to weigh your options. Is it best to stick to the payment plan or would an extension be more cost effective? When you know all the fees involved, you can calculate the final cost for each scenario and figure out what works best for your personal finances.

When you have an opportunity to make a change for the better, take it and take care of it. Falling behind on a payday loan is an expensive mistake. This money is fast. You pay to get a fast payday loan to solve emergency problems so take care of the debt quick in return. Borrow, sell or earn the money to get the payment out the door and get you back on your feet. Credit challenges have put you in a vulnerable position, but it doesn’t mean that you have to stay there.

Payday Loan Debt: Comparing It To Other Debt

When we talk about debt, we usually think about the total of what we owe regardless of how it was accumulated or who we owe it to. Payday loan debt included. While some of us may define being in debt by our home mortgage or student loans, for others debt may be determined by our past financial mistakes. No matter how much we owe, how long it will take us to pay it back, or how we got there… it’s all considered debt. It’s only when we look at each type of debt individually that we can understand all of the different types of debt out there. It is then that we can respect the fact that whether we owe $1 or $1 million, to family or payday loan lender, that we are expected to payback what we borrow because it’s all considered debt.

*Mortgage Debt~ This type of debt is defined by a first mortgage on a home, a home equity line of credit, or any other type of loan that is secured by owing a piece of property or real estate. A lien will be placed on the property until the loan is paid off. This type of debt may come with an adjustable-rate mortgage (ARM) which will increase over time over a fixed-rate which stays the same for the life of the loan. With a home equity line of credit, which can also be considered a “second mortgage”, the lender is paid back only after the first mortgage is paid in full. The average repayment term on a home mortgage or line of credit is 15 or 30 years but there are 10 years ARM’s available as well.

* Auto Loan~ Incurring debt with an auto loan means borrowing a set amount for the purchase and then paying it back over a fixed amount of time with a monthly payment (usually 24-60 months). The interest rate will be fixed for the life of the loan unless the borrower decides to refinance for a lower monthly payment.

*Payday Loan~ Payday loans are short-term temporary loans meant to help people out with emergency financial issues or unexpected costs. They are unsecured with no collateral necessary in order to be approved. Most lenders don’t ask for credit history. Borrowers are expected to pay back their loan with there next paycheck but often times payday loan lenders will extend a person’s repayment period. Interest rates are higher than most loans and are fixed. The types of loans are best for people who are able to pay back their loans quickly.

*Student Loan~ Most often granted by the federal government, this type of debt is used for higher education. Interest rates are usually much lower than other forms of debt and repayment periods are usually 10 years, giving the borrower plenty of time to graduate, find gainful employment, and payback what they borrowed. These loans can carry extremely high balances depending on where the borrower went to school, how many years it took them to finish their education, and how many degrees they sought.

*Credit Card(s)~ This type of debt comes from the purchasing of good and services without having to pay up front. Creditors approve card holders for a specified amount in which they can use on a revolving basis provided they make their monthly payment on time and in at least the minimum amount required. Interest rates are based on the borrower’s credit score and can be some of the highest rates paid out of all forms of debt.

While borrowing on credit can be a good, and sometimes necessary financial means, it is important to understand how each type of debt works and what is best for your individual financial scenario.