Payday Loans: Watch out for these dangerous loans

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During these turbulent economic times, faced by millions of working Americans, payday loans are becoming a popular source of short-term financing.

This is especially true for low-income families. Payday loans are easy to obtain and do not require any kind of credit check, but are they really a good idea?

A payday loan is a small cash loan

cash

A payday loan is a small cash loan given to an individual based on the fact that the loan is expected to be repaid with the next payday.

It’s basically about getting part of your next paycheck early. The repayment period is based on how often you pay. The borrower is expected to show proof of employment and bank statement.

The loan applicant writes a follow-up check on the loan amount plus fees. Some states require that the check date be the day the beneficiary receives the money.

Under these circumstances, the borrower signs a contract in which the lender will check by the agreed repayment date. This contract becomes necessary because many states no longer allow a person to write a date-check.

On the day the loan arrives, the borrower enters the lending store to pay off the loan. If the person is unable to come to the store, the credit company can send the check directly to their bank. If the borrower discovers that they cannot repay the loan at that time, the loan may be extended, which may include additional fees.

Failure to complete these loans may cause the lender to threaten prosecution or check fraud.

Lack of easy money

money

These loans usually have a high price. Financing costs are 15 to 30 percent of the amount borrowed. Because in just a few weeks it is 15 to 30 percent if compared to getting a loan at an annual percentage rate of nearly 800 percent.

Because day-to-day loans are so much easier and lack traditional credit checks, companies often plummet in minority neighborhoods, knowing they are more likely to get one of those loans.

Most of these people, on the other hand, already have financial difficulties, and borrowing money at such a high-interest rate only makes things worse. In addition, many of these people cannot repay the loan when it comes.

This situation leads to additional bank charges for rejected checks and credit costs or has to extend the loan, which will cause even more fees. Many of these people get stuck in a vicious cycle. They repay the loan the next day but discover that they do not have the necessary funds to cover their expenses.

They then go back for another loan. This cycle can be continued indefinitely as there is no limit to how many times a person can get this type of loan.

Alternatives to loan loans

cash

There are many alternatives to getting a payday loan. The best thing you can do to avoid these types of loans is to create a budget so that you can afford to pay the bills. Exclude as many unnecessary purchases as possible. Put that money in a savings account.

Even the loose change that is around the house can be invested in savings. Set a budget for groceries, mobile phones, and fuel economy. This can only be achieved by purchasing the items needed when working at a grocery store. See cell plans that offer a base rate for commonly called numbers. When running directions, try to do as many of them in one trip as possible, to conserve fuel instead of making several trips.

Another alternative to a payday loan 

Another alternative to a payday loan 

Another alternative to a payday loan in case of unexpected expenses is to get a prepaid payment from your employer. Many employers offer this to their employees in emergency situations. Employers want good workers to be satisfied. While this will not always work and you will not be able to get used to it, if you face a true emergency and bring it up with your employer, there is a good chance that you will get some sort of financial assistance.

You can also think of a pedestrian. Most people have something that can be pledged, such as old jewelry, tools, and electronics that can be used as collateral for short-term pawnbrokers.

You get money for your item and you can still go back and repay the loan and get your item back. If you cannot repay the loan, the pioneer keeps the item you gave them. So you end up basically selling your stuff to them. This is often a better alternative than getting an unsecured payday loan and being hit with high costs and you are in a dangerous spiral debt.

While not ideal, credit card advancement can also be an alternative to a payday loan. Although interest rates can be applied with a credit card advance, it can be very useful for a one-time emergency.

Ideally, you would have an emergency fund that should cover the financial crisis, but the credit card will work in a stick and instead of paying 700 percent APR on a payday loan, you are left with only 25 percent APR on a credit card. Not great, but it’s still better than payroll reimbursements.

Lastly, finding a friend or family for a loan to help you get through a difficult time is another option. Most people have relatives or friends who will lend them the money they need to help with unforeseen expenses or emergencies.

No interest is usually added to these loans, and sometimes arrangements can be made in installments over time. Of course, maybe one day it can ask you for a favor, and money can ruin relationships, so this should be another last resort.

I need a loan for my wedding!

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Organizing a wedding is not an easy task. Every couple dreams that everything will go perfectly on that great day, just as they had projected in their minds. It is not only about designing the ideal event that transmits the happiness of undertaking a life project in common, but also creating a space that meets the expectations and desires of everyone: family, friends, the little ones in the house.

Choose the place, prepare the invitations, choose the menu, the decoration, the gifts for the guests, the transport … There are many details that we must take into account so that everything turns out as we have planned. However, some couples feel self-conscious about letting their imagination run wild, since all these elements carry a large financial outlay. Here are some ideas so you can plan the wedding of your dreams without having to give up any wish.

 

Budget for a wedding: How much money should I ask for?

The first thing you should do to start planning that special day is to prepare an approximate budget, pointing out all the items and prioritizing those that are essential. There are elements of a wedding that you can not give up, but depending on your financial possibilities you can choose cheaper options for some games and invest the most capital in what you consider most important to you.

Whether the budget we have is small or unlimited, it is always advisable to sit down and make a brief financial plan that will serve as a guide to organize this budget.

 

Types of wedding expenses

wedding loans

The first thing we must establish is the number of guests who will attend the event, since other items such as the capacity of the chosen space, the choice of catering, gifts or transportation will depend on the attendees. In short, that figure will help us define the rest of the expenses of a wedding.

The banquet is undoubtedly the concept to which almost half of the budget for our wedding is destined. The average of a place setting is around 75 and 150 dollars. From there, each couple can choose to stay at that price, reduce it or exceed it. It all depends on the value for money that we want to give to our diners.

Another very relevant item is the wedding suits. The brides spend between 525 and 1,650 dollars on their dress, price to which must be added shoes, accessories, hairdresser, makeup and bouquet.

For their part, they invest an average of between 375 and 780 dollars in the suit, but if they decide on a big firm, the price can go up to $ 1,200.

Depending on the importance we give it and the chosen destination, the wedding trip is the second most important expense in our budget. As austere as we want to be, an average trip for two people is usually around $ 1,150.

During the celebration, a present is usually given to those attending as a souvenir of that great day. The price of the details and wedding invitations ranges from 1 to 40 dollars, depending on the style and design chosen. Another cheaper and original option is personalized gifts by hand, by yourself. Think of something original and go for it!

In addition to these essentials, there are other concepts that you should not forget to include in your list: the photographer, the open bar, the children’s entertainers, the DJ or orchestra, the decoration of the space, as well as any surprises that you have had in mind all these years.

 

How can I finance my wedding?

How can I finance my wedding?

According to a study carried out by the Federation of Independent Users and Consumers (FUCI), the average cost of a wedding for 100 diners was between 16,534 dollars, and ranges between 11,864 and 30,000 dollars.

No matter how well planned our budget is, in the final stretch we can always find several expenses that we had overlooked and that can considerably increase the initial budget, thus causing an unexpected cost overrun. That extra money can be a headache and overshadow the initial joy and euphoria that accompanies the preparation of a long-awaited day. To overcome this gap, financial institutions make two very useful mechanisms available to us.

The first of these are known as “wedding beads”. Actually, these are checking accounts or savings accounts, where guests can deposit money to the couple as a present and thus help cover the budget for the wedding.

 

Personal loan to finance the wedding

Personal loan to finance the wedding

The second possibility would be to apply for a personal loan to finance the wedding. Specifically, in Lenders Bank you can access an amount of up to 5000 dollars that you can comfortably return in the number of terms that best suits you, without applying any opening commission. In addition, the money will arrive in a few minutes from when we confirm the granting of the credit to cover the expenses of your wedding.

On the other hand, if you have any doubts or incidents in relation to your loan or you want to cancel it before the established date, you can turn to our customer service team, which is at your disposal from Monday to Sunday, from 9: 00 am to 9:00 pm

If you have come this far it is surely because you are immersed in your wedding celebration. !! Congratulations !! We trust that these tips have helped you organize and plan such a special day for you and your loved ones. As you can see, with a little organization and some help you will not have to give up any detail, what’s more, you can enjoy with complete tranquility the happiness of planning one of the most important moments of your life. Grab a pencil and paper and enjoy the ride!

Why can it be smart to take out a long-term loan with many credit providers?

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A long-term loan has a special appeal to many people, but especially to people with bad credit, because the payments are more affordable from month to month. While it takes less time to pay off a short-term loan, the amount you have to pay each month can be limiting. That is why it is important to look at all the details of a loan that you take out, especially if you have bad credit, because you want to use this loan to improve your credit score for the future. This article outlines some of the “fine print” of taking out a long-term loan.

Borrower Beware

Borrower Beware

When you are in a difficult financial situation and have bad credit, taking out a loan is a risk for both you and the lender. Given your bad credit history, you will be penalized in terms of interest and terms, but that’s no reason to make you feel inferior or in need of a favor from a gracious lender. There are many lenders who practice predatory practices that try to scare borrowers out of crazy costs and high interest by making them feel like they have no other choice. Stay away from these people.

There are many options for finding a loan

There are many options for finding a loan

If you’re looking for a long-term unsecured loan, don’t forget that this is serious business. As a borrower, you need to understand the risks of any available option. Ask yourself why you need this money in the first place and decide if you can’t get it from non-traditional means like a friend or family member before looking for a professional lender. In many cases, borrowing can entail little to no private interest and no background check is required. Just make sure you have a written agreement so that there is no gap between yourself and the person lending you money. Be responsible.

Collateral is key to low interest rates

Collateral is key to low interest rates

You need to understand that in the borrowing world, those looking for unsecured loans are considered a huge risk, especially if those people have a bad credit history. Most lenders simply will not work with you and those who do will often demand very high interest rates and strict repayment terms. Failure to repay an unsecured loan will seriously damage your credit history and put you in a much larger debt than a guaranteed (collateralised) loan will.

How to prepay a home loan?

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You took out a loan to finance your property purchase several years ago and an unexpected cash inflow or the sale of your home allows you to consider settling the outstanding capital of your home loan before the date provided for in the contract. You have the full right to repay, in whole or in part, a loan in advance. Better to know the cost of this approach.

Please note your contract may however prohibit early repayment of an amount equal to or less than 10% of the initial amount of the loan, except in the case of its balance. But beware, depending on the contractual clauses you do not always have an interest in committing to this process.

Limited penalties

Limited penalties

Most loan contracts provide for indemnities in the event of early repayment (IRA). Their amount is limited by law. These indemnities may not exceed the equivalent of one semester of interest at the average credit rate, while being capped at 3% of the principal owed or six months of interest at the average credit rate of the principal repaid.

In addition, your contract may stipulate that prepayments less than or equal to 10% of the initial loan amount are prohibited, except for the balance of this loan. If you have taken out a long-term loan, twenty years and beyond, the penalties are generally no longer required beyond a certain number of years.

Important
When taking out your contract, if you think you might be able to repay your loan in advance, try to negotiate the cancellation of the penalties.

When can you be exempt from penalties?

When can you be exempt from penalties?

If you took out a loan after July 1, 1999, you will not be liable for compensation if the early repayment is due to the sale of your accommodation in the event of a change of workplace, death or forced cessation of activity of one of the spouses.

If you sell your home to buy another, you will not pay compensation if you transfer your loan to your new acquisition.

The right time to prepay

The right time to prepay

Before considering early repayment of your credit, weigh the pros and cons. If you balance it when you sell to buy: no problem if your new financing is granted by the same bank. If you are not in this situation, make your accounts.

If you only have a few years of credit left, paying off may not be a good deal, especially if the interest rate is low and you are subject to penalties. In this case, you may have an interest in investing the amount you have, especially if the remuneration is attractive. On the other hand, if there is a long repayment period remaining (longer than the period during which you have already repaid your loan), repayment will prove to be advantageous.

Partial refund

Partial refund

If the amount received cannot cover the full amount of the principal owed, it is possible to opt for a partial reimbursement. You can reduce the monthly payments while keeping the initial repayment period. Another solution: reduce the duration of the credit, by continuing to pay the monthly repayments initially planned. This financial transaction makes it possible to lower the overall cost of the loan, unlike the previous solution.

Procedures

Procedures

If you choose to prepay, you must send your request to your bank by registered mail with acknowledgment of receipt one month before the desired date for reimbursement. No need to justify yourself. Upon receipt of your mail, it must send you all the necessary information, including the financial consequences of your approach.

For credits taken out before 2016, the establishment will send you as soon as possible all the figures allowing you to know the amount of the sums to be reimbursed. You may be billed for this statement.

Loan insurance: group contract or delegation for a smoker?

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Being a smoker greatly increases the risk of claims for borrower insurance, which is therefore more cautious in providing guarantees at competitive rates. Most impose surcharges or offer to buy certain guarantees at far from advantageous prices. What is the difference in this context between group contract and insurance delegation for a smoker?

Insurance delegation and group insurance

Insurance delegation and group insurance

Loan insurance is inevitable for any real estate purchase covered by a loan. For a long time, the rule has been to take out the group contract submitted by the lending institution, but the 2010 Lagarde law opened the door to competition by authorizing the delegation of insurance taken out with another body. Two very different options: group insurance consists of pooling risks by standardizing the types of insured, the guarantees offered, and the premiums.

This type of contract is simple and quick to sign, but only very briefly takes into account the actual situation of the borrower. Conversely, insurance by delegation allows competition to be played by soliciting insurance proposals from organizations outside the lending institution, provided that the equivalence of the guarantees is respected.

Why use the insurance delegation?

Why use the insurance delegation?

When you know that a mortgage loan insurance costs on average twice as much for a smoker according to Ganhu, it can be interesting to play the competition. But the delegation of insurance requires pushing the door of many organizations, in order to study the precise situation of the borrower who smokes, and find the one who agrees to offer the best conditions of cover at the best price.

Loan insurance brokers are available to take advantage of their privileged link with insurers, but also their experience and professionalism to help the borrower to carry out this time-consuming and technical task which makes it possible to find the best guarantees at the best tariff. In any case, quitting smoking can reduce the cost of your loan insurance premiums. After twenty-four months without a cigarette, you are no longer considered a smoker! Conversely, be careful because a false declaration may result in the nullity of the contract.

Where to get a credit for a boat.

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To sail towards new horizons, to set sail and weigh anchor, the boat continues to make many “earthlings” dream. From dream to reality, there is sometimes only one step to take: that of boat credit .

Which boat to choose?

Which boat to choose?

From the catamaran to the open cruiser, from the fishing boat to the yacht, from the cruiser to the sailboat, today there is a very great diversity of boats. In this maritime universe, several criteria make it possible to orient oneself towards the right boat:

  • use / activity: freshwater fishing boats are not designed for comfortable cruising, and vice versa. The use of the boat provides a first indication of the type of boat to choose;
  • dimensions: unless you are wealthy, it seems pointless to acquire a yacht over 100 feet for a romantic ride for two on the water. According to the same logic, it will be difficult to embark the whole family in a small jet boat;
  • the budget: it includes the purchase of the boat, new or second-hand, but also the operating costs (equipment, insurance, security, etc.).

What credit for a boat?

What credit for a boat?

The boat loan allows the purchase of a boat in a traditional way with a sum borrowed at a credit rate fixed in advance, which differs according to the amount of the boat loan and the number of monthly payments. Most credit organizations are inclined to offer, under certain conditions, boat loans of up to $ 100,000 over 84 months, or even more in certain cases.

The boat loan can be a personal loan, or a vehicle loan used only for the purchase of a boat, or even a mortgage if the boat is to become a home! It should be noted that for several years, the boat has lent itself like the automobile to the game of LOA (Rental with option to buy). Credit conditions will differ from case to case; for example, you can check the vehicle credit rates for more information on what you can expect when you choose an assigned boat loan.

What price for a boat?

What price for a boat?

The type of boat and its dimensions obviously depends on the price of a boat. The range in this area is extremely wide, ranging from less than $ 60,000 for a small used sailboat to several hundred thousand USD for high-end boats.

Change home loan insurance.

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When taking out your mortgage, you purchased mortgage loan insurance. This, proposed by your bank, guarantees the repayment by the mortgage loan insurance of the monthly payments of the credit due to death, invalidity, incapacity for work or loss of a job . This is group insurance, the principle of which is to pool risks between all policyholders.

However, if the cost of your home loan insurance seems too high, you can use an insurance delegation to take out individual insurance. Individual insurance must, however, provide at least the same guarantees as to the group contract of the bank.

Home loan: can you take out individual insurance?

Home loan: can you take out individual insurance?

The answer is yes. Since September 1, 2010, the entry into force of the law, you can choose a mortgage loan insurance different from that offered by your bank. The Law (2014) goes further by allowing borrowers who are already insured to change insurance during the first year of subscription. And the Bourquin amendment marks a new stage by allowing you to change mortgage insurance on each anniversary date of the contract. You are therefore free to choose borrower insurance different from that offered by the bank.

You then have the choice between group insurance offered by your bank and individual insurance issued by another establishment.

Why change home loan insurance?

Why change home loan insurance?

Because changing borrower insurance can save you money: you can compare mortgage loan insurance offers based on the guarantees and prices advertised. Depending on your profile (profession, age, etc.), individual insurance can be more advantageous than group insurance. This is generally calculated on the amount remaining due and changes with the repayment of the loan. In other words, the more you pay off the loan, the lower the monthly insurance payments.

So, even if you have already taken out a borrower insurance contract with your bank, you can delegate mortgage loan insurance. By doing so, you benefit from individual insurance at an advantageous rate (subject to the equivalence of guarantees offered by the bank).

NB: Be careful, the total cost of insurance and the rate are not the only elements to compare when you decide to make a change in borrower insurance in 2020. Group insurance is sometimes more attractive depending on the profiles and the levels of guarantee provided by the bank.

Change borrower insurance?

Change borrower insurance?

Change home loan insurance before 1 year

The Hamon law allows you to change home loan insurance in the first year of your subscription. The law already made it possible to choose personal borrower insurance, other than group insurance for your bank: this is the delegation of mortgage loan insurance. The Hamon law goes further and allows you to terminate your borrower insurance in the first year of your subscription and opt for insurance at a favorable rate. You have 12 months to change insurance.

Important: remember, your new loan insurance must offer at least the same guarantees as to your current home loan insurance.

The Hamon law, therefore, allows you to make savings on your loan insurance or find the borrower insurance most suited to your profile and your needs with the best insurance rate.

Change home loan insurance after 1 year

After this period of 1 year, you can change borrower insurance with the 2 law: indeed, the amendment authorizes you to change loan insurance on the anniversary of your contract. You can, therefore, change borrower insurance after one year, but also change mortgage insurance after 2 years whenever you want!

The conditions for changing borrower insurance with the amendment are the same as for the Lagarde law and the Hamon law: your future borrower insurance must offer guarantees at least equivalent to your current loan insurance. Of course, you can also opt for extended coverage by choosing borrower insurance that offers guarantees superior to yours.

Change home loan insurance after credit renegotiation

Change home loan insurance after credit renegotiation

The mortgage loan renegotiation takes place with your bank: it then offers you better conditions for your current mortgage: for example a better mortgage rate. Your bank makes an amendment to your mortgage loan contract: there is no new contract, but the contract initially signed which continues with a new rate.

Changing borrower insurance is then interesting after a renegotiation of mortgage: it allows you to make even more savings on the total cost of your loan. Whether you have purchased group insurance or individual mortgage insurance, the process will be the same: to change borrower insurance following a renegotiation of mortgage, you will have to respect the principles of the Law if you have purchased your borrower insurance less than a year ago or meet the deadlines set out under law (therefore on each anniversary date of the contract) if you signed your mortgage loan insurance contract there is more than one year.

Change home loan insurance after a loan buyout

If you buy back credit, you will also have to change your mortgage insurance: in fact, you should not confuse buying credit and renegotiating a home loan. With the loan repurchase, a new bank redeems your mortgage by making a prepayment. You get a new contract, with its new borrower insurance, perhaps group insurance from your new bank.

So how do you change home loan insurance after buying a home loan? You can do this in three ways: by refusing group insurance with the law which allows the delegation of insurance, or within 12 months from the subscription to your new borrower insurance under the Hamon law, or still on each anniversary date of the mortgage loan insurance contract as part of the Bourquin amendment.

Compare home loan insurance with a loan insurance broker

Have you decided to change your home loan insurance in 2020? As a reminder, Pangloss can assist you by comparing for you the best rates in individual insurance thanks to our mortgage loan insurance comparator. Once the form is completed, our mortgage loan insurance brokers will contact you within 48 hours to offer you mortgage loan insurance tailored to your project and offer the same guarantees as to your current contract.

Loan insurance: which contract for a rental investment?

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Building wealth on credit is the great advantage of rental investment through mortgage loans. An attractive long-term perspective that pushes many individuals to take the plunge each year. But not all investments are created equal, and if profitability depends on the attractiveness of the property and its valuation for resale, it is also impacted by the cost of loan insurance.

Investing in real estate on credit, a great opportunity

Investing in real estate on credit, a great opportunity

Financial investment or real estate investment? This is the dilemma faced by individuals who want to grow their savings and diversify their income. Both involve their risks, but the second has serious assets to tip the scales in its favor. Investing in real estate can indeed be done on credit, by taking out a loan whose monthly payments will be reimbursed in whole or in part by the rents collected.

In addition, systems such as the Pinel law, the Denormandie law or the Censi-Bouvard amendment make it possible to benefit from tax deductions spread over several years before realizing a gain on resale by taking advantage of the increase in value goods in major cities (+ 60% in Lyon in ten years). Not to mention the current low rates (1.29% on average) which make credit financing very attractive.

Group insurance or delegation of insurance?

Group insurance or delegation of insurance?

As with a traditional property purchase, an investor who takes out a loan must insure it. Since 2010, it has been possible to call on the insurance delegation to bring competition into borrower insurance: it is no longer compulsory to take out insurance with the lending institution.

Within the framework of this group contract, the risks are pooled, and the guarantees as well as the premiums are uniform. This is less advantageous in many cases than insurance delegation, which allows competition to play to the full in order to obtain personalized proposals, adapted to each particular case.

How delegation of insurance improves profitability

How delegation of insurance improves profitability

The quality of an investment is judged by its rate of return, depending in particular on rents but also on the cost of investment, which ranks as borrower insurance. Using the insurance delegation makes it possible to obtain a very precise study of the investor’s situation, and therefore an adapted proposal, at the fairest mortgage loan insurance rate.

In the case, for example, of a 45-year-old couple making an investment under the Pinel regime with a mortgage up to $ 120,000, it will be possible to save several tens of euros per month thanks to the insurance delegation compared to a proposal in group loan insurance contract issued by the lending institution. An economy far from negligible over the duration of the operation especially as a real estate investment is made over the long term, it is possible to take full advantage of the decreasing monthly payments.