Pitfalls of Payday Loans

Payday loans are a very commonly used financial tool. Almost anyone can qualify to obtain a cash advance loan. These short term loans are used for sudden emergencies that will not fit into the regular budget, such as car repairs or emergency medical bills that must be paid immediately. They are available to almost anyone with income and a bank account, but the interest rate charged for these loans is very high. Another common reason some people take out a quick cash loan is to avoid an even higher fee from a late credit card payment or bank insufficient funds check charge. Fast cash loans are designed for short term occasional use, but many persons get trapped in the pitfalls of payday loans.

Avoid Getting Trapped in High Interest Payday Loans

There are several pitfalls to beware of when using payday loans. Being unable to repay loans on time is one big pitfall. The problem here is that the borrower usually cannot repay the loans they have out at one time when due. To solve that problem, they borrow for another period. This continues until loans are finally repaid, but the high interest fees can really mount up over time. These loans are usually due in 8 to 30 days, whenever the borrower is paid. Revolving that loan for a few times can really skyrocket the amount of interest paid on the original amount.

Short term cash advance lenders are not bound by government regulations with regard to the amount of interest they can charge. Banks are restricted to around 36%, but these payday loans can carry interest APR rates as high as the market will bear. Most begin around 396% APR, but some can be as high as 2000% or more. A typical fee for borrowing $100 is between $15 and $25. This amount is added to the borrowed amount every time the loan recycles. If you borrow $100 one time, plus the $25 fee, you will owe $125. If you cannot afford to repay all that on the due date, you may again borrow that original $100 and then owe another $25 fee.

Repayment Problems

Most lenders require you to repay the entire amount due before you can get another loan. If you do not have enough money to pay off your payday loan, you might immediately borrow a higher amount to cover everything, say $140. This will then have another higher fee of $35 on top of that, for a total due next time of $175. Or, you might borrow less, say $80, but this also will have another interest fee of about $20 added to it. Some people keep reducing their loan amount each time to get out of it at some point in the future. Payday lenders may also offer a “payment plan” to do the reduction over time. If you do a payment plan, you may discover you are denied another cash advance loan in the future.

Some lenders will allow you to “roll” the loan without repaying anything that day. You can keep it out until the next pay period, but they will still add on a second fee amount. Renewing a cash advance loan every payday can quickly add up to double, triple or more times the original amount borrowed. This is a big payday loan “trap” to be avoided.

Too Many Payday Loans

Another pitfall of payday loans is having too many at one time. It is very hard to repay two or three short term loans plus all that high interest. For this reason, some states in the U.S. do limit the number of payday loans a person may have at any one time. The limit is two or three, if there is a limit. Cash advance lenders do not do credit checks, but they do have their own tracking system to know how many cash advance loans you have taken out. If their report shows you have too many, you will be denied another loan until the previous ones are repaid.

There is no credit check, but their internal system will also indicate if you have defaulted on a previous payday loan. This is another cause for denial. These rules are for the good of the borrower. Being highly overloaded with payday loan debt can be a catastrophe for the borrower. Lenders are already making these loans to persons with little or no credit, or poor credit records. High risk involves high fees, and those with bad or no credit will pay that high price.

Buyer Beware

Not being able to charge a profitable interest rate for high risk, short term loans is one reason why banks and other financial institutions do not make these types of loans. Being profitable with high interest fees is the main reason why cash advance lenders are popping up everywhere, including on the Internet. As with any product, the caveat is always buyer beware. Payday Wizard loans are very useful, but care must be taken to get out of them quickly. Do not get trapped in the pitfalls of payday loans.

Graduate Leverage Education Loans: Company Offers Federal and Private College Student Loans

Private student loans are quickly becoming a primary method of funding for college students, and with an increase in demand has come both an increase in offerings from various private lenders and an increase in private lending companies.

Graduate Leverage, begun in 2003, is one such private education lending company, and offers a number of federal and private options. This article will explain the different Graduate Leverage student loans available and offer advice for those shopping around for private student loans.

Look First to Federal Loans Offered by Private Lenders

As a general rule, students should look to take out private education loans only after they have exhausted their federal loan options, such as Stafford Loans and PLUS Loans. This is because federal loans, backed by the U.S. government, often have lower interest rates and fees.

Many times, federal loans are offered by the same banks and financial institutions which offer private education loans. These federal loans are available through the Federal Family Education Loan Program (FFEL).

Graduate Leverage is one of many financial institutions which offers both private student loans as well as federal Stafford Loans and Parent PLUS Loans, the terms of which are established by the FFEL.

Advice on Finding the Best Private Student Loans

Students shopping around for private education loans need to look closely at the interest rates and fees being offered, as loans advertised with low interest rates but high fees can sometimes be more expensive than loans with higher interest rates.

As a general rule, loans with fees of around 4% equal an additional percentage increase in the interest rate in terms of a loan’s overall cost.

The best deals on private student loans “will have interest rates of LIBOR + 2.0% or PRIME – 0.50% with no fees.” Such loans compare favorably with federal loans, and are available for students who either have good credit or are able to secure a cosigner with good credit.

Graduate Leverage Student Loans for Undergraduates

Graduate Leverage offers school-certified private education loans for undergraduates enrolled in a participating degree program. Below are the terms and rates available:

  • Depending on a student’s credit, available loans have interest rates from LIBOR + 1.75% to LIBOR + 10%;
  • Fees can range from 0 to 6%;
  • A .25% interest rate reduction is available for those who have payments automatically deducted from a bank account;
  • Payments may be made up to 20 years after the loan is taken out, depending on the balance.

For those with solid credit, these loans offer good interest rates coupled with low fees, as well as interest rate reductions for automatic withdrawal. However, for those with less-than-stellar credit, both the rates and fees can get fairly high. The maximum amount available is $25,000.

Please note that, to qualify, students must be enrolled in a participating school, meet the school’s academic requirements, and be a U.S. citizen or permanent resident.

Graduate Leverage Student Loans for Graduate Student

Graduate Leverage offers school-certified private education loans for undergraduates enrolled in a participating degree program. Below are the terms and rates available:

  • Depending on a student’s credit, available loans have interest rates from LIBOR + 1.75% to LIBOR + 10%;
  • Fees can range from 0 to 6%;
  • A .25% interest rate reduction is available for those who have payments automatically deducted from a bank account;
  • Payments may be made up to 20 years after the loan is taken out, depending on the balance.

For those with good credit, these loans offer good interest rates coupled with low fees, as well as interest rate reductions for automatic withdrawal. However, for those with less-than-perfect credit, both the fees and rates can get fairly high. The maximum amount available is $25,000.

Please note that, to qualify, students must be enrolled in a participating school, meet the school’s academic requirements, and be a U.S. citizen or permanent resident.

Graduate Leverage Student Loans – Medical Residency & Relocation

Graduate Leverage offers this option for students enrolled in an approved medical program. Below are the terms and rates available:

  • Depending on a student’s credit, available loans have interest rates from LIBOR + 5% to LIBOR + 8%;
  • Fees can range from 0 to 6%;
  • A 1% interest reduction is available at repayment;
  • A .25% interest rate reduction is available for those who have payments automatically deducted from a bank account;
  • Payments may be made up to 15 years after the loan is taken out, depending on the balance.

For those with good credit, these loans offer moderately good interest rates coupled with low fees, as well as interest rate reductions for automatic withdraw and consistent payments. However, for those with less-than-perfect credit, both the rates and fees can get fairly high. The maximum amount available is $20,000.

Please note that, to qualify, students must be enrolled in a participating medical school, meet the school’s academic requirements, and be a U.S. citizen or permanent resident.

Private Student Loan Consolidation

The Graduate Leverage student loans detailed in this article may be consolidated with other private loans held by a borrower. Doing so can extend payment plans and, in some cases, reduce overall interest rates for students with rather expensive loans.

Pros and Cons of Airline Rewards Credit Cards: Truth about Cash Reward Cards

Many different credit card companies are now offering rewards to their customers. Typically, the rewards come when the individual spends money on his or her credit card. After they have spent so much money, they receive a certain number of points or rewards. These kinds of rewards can be valuable for some cardholders, but for others, pointless. Below, individuals will find the pros and cons of airline rewards credit cards.

Airline Reward Credit Cards Save Money

For companies or individuals who travel often, the airline rewards credit cards can be quite valuable in that they will allow the individual to save a lot of money on travel. However, only when an individual spends a good amount of money will he or she receive the airline miles. It’s important to calculate the yearly fee in with the number of miles one will be receiving. This way, the cardholder can determine whether they’re actually saving money and earning points or not.

Clients Qualify for Cash and Airline Points

Individuals who don’t travel that often or who will not be charging enough on their card throughout the year to earn enough points for good travel should probably consider a different type of card. A card that offers cash back as a reward is a great way to put some extra spending cash in one’s pocket, especially if he or she will be using the card quite often. This can allow the individual to save the cash for purchases that would benefit the individual.

Determine the Cost of Each Airline Mile

When considering the benefits and advantages of airline rewards cards, individuals should consider the cost for each airline mile. This will help them determine whether it is worth it or not. Determine how long it will take to earn enough miles so that they can actually be used for something, such as a vacation or work trip that the individual would normally have to pay for. If it will take a long time with the amount that will be charged on the credit card each month, it may not be a good idea to go with this kind of card.

Don’t Forget About Expired Miles and Gifts

Individuals should find out whether or not the airline miles can be given as gifts and whether or not they expire. They should also find out how quickly they expire if they do. If the miles will start expiring before enough is spent on the credit card to earn a trip, the card is not going to be worth it.

By considering the different points above and using the tips and information, individuals can determine whether it would be best for them to go with an airline rewards credit card or a credit card that offers cash back or some other type of reward.