Lending Solutions When You Are in a Bind

There is nothing more stressful than having an emergency and not having the cash on hand to pay for it. In many cases, you may not have a lot of options for getting the funds you need quick enough to make a difference, especially if it is for something like a car repair that is not covered by insurance.

Knowing Your Options

In days past, people who were pressed for funds had very few options available to them. For the most part, consumers could either seek a loan through their traditional bank or apply for a credit card for an extra line of credit. If you need cash now, the chances are that neither of these financial products would help you today. Traditional bank loans are seldom processed quickly and require higher credit scores and strong payment histories to qualify for them. While you may be able to apply and get approved for a Credit Card relatively quickly online, if you get approved, you still have to wait to get the physical card to arrive in the mail, before you can access the credit line. Plus, cash advances on a Credit Card can come with outrageous fees and a much higher APR than you would think, increasing your overall debt load. This is a time when a Payday Loan can be the solution to your cash crunch emergency.

Why a Payday Loan?

If you do not have the time to wait around for loan approvals or for a Credit Card to arrive in the mail, applying for a short-term Payday Loan makes a lot of sense. The application process is short and straightforward. All you need to do is answer a few basic questions about your employment history, your payroll schedule, your contact information and your bank account details. Payday lenders are different from traditional style lenders because they consider all applicants. They do not make loan decisions solely based on credit scores or past payment history, so if you have less than perfect credit or a spotty repayment history, these things may not be held against you.

Furthermore, they are convenient and offer discretion for applicants. In addition, you are able to apply for your loan online, from the comfort of your home. This saves a lot of time and petrol because you do not have to drive anywhere or wait for a loan officer to speak to about your cash needs. If you have a consistent income and the capacity to repay the initial loan with interest back, there is a very high chance that your loan application will be approved. This helps you maintain your dignity when you are in a cash bind. When you are really pressed to come up with cash in an emergency situation, there is no worse feeling than being told “Sorry, you do not meet our requirements” by someone who could be in a position to help, but cannot or will not because their computer system tells them “No.”

Loans in the Amount That You Need

The amount of money that you can borrow from Payday lenders can vary from lender to lender. For the most part, Payday loans are available in amounts of anywhere from $100 to $1,000. Some lenders may offer higher credit lines of up to $5,000. As you can imagine, this gives consumers a wide range of access to funds so they can take care of important business like getting their car repaired, paying for back-to-school expenses , or accessing enough funds to put a security deposit down on a new rental apartment or home. If you need a new car, a larger sized Payday loan can even be used to finance the entire purchase price of a used vehicle.

Fast Access to Your Funds

Payday lenders know that their customers are seeking the cash that they need rapidly. For this reason, they give the customer what they want – a quick answer. Many short-term lenders give applicants an answer in 30 minutes or less, so you will not have to spend a day or a week worrying about whether or not you will have the funds you need to make it until your next payday. This alone is enough to give you the peace of mind and confidence to apply for the funds you need for your short-term goals.

If the client is approved for their short-term loan, most lenders that issue FCA authorized Payday loans deposit the approved funds into their bank account almost instantly. In many cases, you can have access to these funds in 24 hours or less.

Saving in Your Early 20s – What You Need to Know

Saving in Your Early 20s - What You Need to KnowIt’s not easy to understand the importance of savings for the future when you’re in your early 20s. When you’re in your 20s, you tend to be focused on the present instead of the future. But saving in your 20s is actually very important. Starting early gives you a big edge, and makes it much more likely that you’ll reach your savings goals when you retire. Let’s take a look at everything you need to know about savings in your early 20s.

Start Saving Immediately

There are many reasons why younger workers don’t save as much as they should, and lack of cash flow tends to be the most common reason. When you’re struggling to pay off student loans, trying to fund a 401(k) is the last thing on your mind. It might be difficult, but it’s not impossible. Even if you’re only able to save up a small amount of money each week, even $25, it will still add up over the course of 20 years, when you factor in compound interest.

Sign Up For Your 401(k)

The simple act of signing up for your employer’s 401(k) will encourage you to begin investing your money. Once you’ve got it up and running, you’ll be more motivated to invest money into it. In many plans, the employer will match up to 3% of your salary, which is free money that you should take advantage of.

Once you sign up, the money that you save will automatically be taken out of your check before it’s taxed. This means that a smaller amount of your income will be taxed now, and only when you withdraw it in retirement will you be taxed. Aim to contribute a few percent of your income at first, and if you can increase that to 10% or more, you’ll put yourself in good position later. Your future self will thank you.

Be Aggressive With Your Investments

People in their 20s can be much more aggressive with their investments compared to people who are older. For example, instead of placing 50% of your money in bonds, and 50% of your money in stocks, consider placing up to 90% of your investments in stocks. Why? Because someone in their 20s has a very long life ahead of them, so they can handle the ups and downs of the market better than someone in their 50s. Just make sure to hedge your bets by investing in as many different stocks as you can, such an index funds which tracks a large collection of different stocks.

Make Logical Decisions Regarding Money (Not Emotional Ones)

If you’re going to take these money-saving principles seriously, you need to consciously make logical decisions regarding your money. Younger people often choose to spend now and worry about saving later, but delaying gratification is one of the best things you can do for your future. Learn how to make logical decisions with your money that will help your future self rather than emotional ones which feel good now but will hurt down the road.

What is the Future for the Short Term Lending Sector?

What is the Future for the Short Term Lending Sector?Could the short-term lending sector finally be on the up? After years of negative press coverage, there are signs the payday lenders have finally cleaned up their act.

Recent reports of a 45 percent reduction in the number of complaints received by the Citizens Advice Bureau when compared to the same time last year is a sure sign that sweeping regulatory reform is starting to take affect.

In January to March 2014, Citizens Advice received 10,155 complaints about payday lenders. The number fell to 5,554 for the same period this year.

What changes has the FCA made?

The Financial Conduct Authority (FCA) introduced tough new rules to regulate the industry. The first of these changes was introduced in April 2014, followed by a price cap limiting the total cost of a loan in January 2015. While many commentators would argue these reforms were long over due, they do now seem to be having the desired effect and are forcing short term lenders to clean up their act.

The FCA’s rule changes were designed to regulate the way lenders operate on three fronts. Default fees have been capped at £15 to protect those who are struggling to repay their debts; the total cost of a loan has been limited to 100 percent of the original amount; and the total interest and fees have been capped at 0.8 percent per day.  The result of the changes is that someone borrowing £100 for 30 days cannot pay more than £24 in fees and charges if they repay the loan on time.

A fall in the total number of lenders

The attentions of the FCA have caused some of the industry’s biggest names to slash their workforce or leave the industry entirely, while a new breed of more responsible short term loans provider such as wizzcash.com, have filled the space they’ve left.

Some commentators anticipated that regulatory reform on this scale would result in the number of lenders in operation falling from up to 400 before the new rules came into force, to just three or four. However, this hasn’t been the case, with some 247 lenders applying to the FCA in February for authorisation to trade.

There is also no shortage of demand for short term loans, with a recent report by a leading payday lender identifying close to 13 million people across the UK that are both ‘cash and credit constrained’, and under-served by mainstream financial services.

The worry is that if payday loan providers disappear from the market entirely, there would be nowhere for these borrowers to go. Their only option might be to turn to illegal loan sharks for help.

With that in mind, the news that the payday lenders are cleaning up their act should be well received by consumers and commentators alike. While some charities might argue that payday loans are the cause, not the cure of financial stress, until the banks start to lend to those they are currently turning away, short term loans present the only real option for those in need of emergency cash.

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