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Posts Tagged APR

Pay Day Loans – Loan Sharking Reinvented

Feb 20

Posted by admin in Loans

We see advertisements for quick cash loans every day. These loans can be pay day loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans. Typically the borrower rights out a check for the amount of the loan plus a fee. This fee can range from 10% to 40% of the loan and the borrower usually has two weeks to pay it off in full. Most can’t pay it off in time and end up owing, in some cases, more in fees than the amount of the original loan.

Some states like South Carolina have placed limits on the fee amount allowed. South Carolina law limits this fee to 15% of the amount borrowed. If you were to look at this in a yearly APR it would be 390% interest. Most states have usury laws which limit a yearly rate to 30% or under. Currently Pay Day stores slip by by stating that loans are paid off in 2 weeks so no violation has occurred and that they are providing a much needed service to people that have no where else to go.

The actuality is that most of these borrowers cannot repay on time and so they are forced to pay the interest and take out another loan to cover the principle. Currently the average borrower in South Carolina takes 10-15 loans to payoff. These statistics are similar in other states. Which means the borrower will pay $400 – $500 in loan fees on a $400 loan. This is usury and should be illegal as it is not helping anyone. It is predatory lending that just gets borrowers in deeper debt than before.

“Some will say, that little man has to have somewhere to go,” said state Rep. Eldridge Emory, “Butif he gets money this way, he’s just digging a hole deeper and deeper, and he’s not going to get out.”

Several states like North Carolina have currently banned this form of predatory lending. Others are beginning to consider legislation to further control and possibly curb pay day loans. Still more needs to be done.

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Refinance Used Auto Loans

Jun 6

Posted by admin in Finance, Mortgage Refinance

Refinancing used auto loans works very much the same way as refinancing regular auto loans. No appraisal is necessary to avail oneself of refinancing services for used auto loans. The value will still be based on how much more money is needed to pay off the existing used car loan.

As with regular auto loans, those who did not get 0 percent to 2 percent APR used car loans are advised to avail themselves of auto refinancing. Using auto refinance calculators, used auto loan owners can have an idea of how much they can save from refinancing.

There are some tips on how to get refinancing applications for used auto loans. First, the refinance applications should be filed using the same name used in the used auto loan. This is one way of ensuring credibility. If the refinancing company did not find matching names, the application will more likely be rejected.

Second, while the used car need not be appraised, the value of money needed to pay off the used car loan should be still be at least $7,000. Refinance companies usually do not entertain any amount lesser than that as it could only mean a waste of time.

The used auto loan owner should also gather all the necessary information regarding the vehicle. This would include the accurate year and model number of the car. The vehicle identification number should also be prepared, as this would be needed by the refinancing company to authenticate the refinancing application.

Most importantly, used auto loan owners should bear in mind that the refinance loan should not be higher than the value of the car. Though a formal appraisal is not necessary, it may still help to know the current price of the car. No refinancing company lends an applicant more than the current value of his or her car, be it new or used.

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Switching Credit Cards For A Better Deal

Jan 28

Posted by admin in Credit

You may think that a credit card is for life ? but with the level of hot competition among credit card providers these days it has never been easier for people switching credit cards to get a better deal than the one they currently have! So, if your credit card provider is not offering you the best current market conditions, the time may have come for you to consider a switch.

Essentially there are two ways in which you can move your current credit card balance to a new card provider:

- you get an offer (usually in the post) to move your current balance to a new provider offering better terms and conditions than what you currently have;

- you make an application to a new provider and in your application you inform the new provider that you intend to move a balance over from your previous provider.

Either way, once your new card has been approved, you simply switch over the balance of the old card to the new card and then cancel the old card. In fact it could not be made easier for you to move your balance as the new card application form will likely have a space for you to fill in your current details and your new card provider will then arrange for the balance to be transferred once your new card has been approved!

Keep in mind that card providers today like the idea of customers moving over existing balances that are earning them interest income and competition is fierce to get people to move over to their card, so make sure when your are considering switching your credit card provider that you get:

- a better APR deal than you currently have;
- a better rewards system than you currently have;
- if possible, no membership or annual fees.

Also, if you don?t want to, you don?t actually have to close an account just because you have moved the balance to a new card. Consequently, if you have two credit cards and one of these credit card provider is offering a lower APR than the other, but the other is offering a better rewards system, you can keep both cards active and every now and then you can arrange to have the balance of your more expensive APR-charging card switched to your less expensive APR card. That way you can enjoy the best of both worlds!

Joe Kenny writes for CardGuide, offering the latest information on credit cards, visit them today for more best buy credit cards.

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Understanding Your Bank Account Details Better

Jun 26

Posted by admin in Personal Finance

With so many different terms floating around, banking terminology can get really confusing. If you are someone who doesn?t know their AER from their APR and their PIN from their Chip, then this guide to common banking terms could enlighten you.

AER

AER stands for Annual Earnings Rate. AER is used to calculate the annual amount that you earn on an investment or savings account. The higher the AER, then the better the investment or savings account. If you are looking for a savings account then compare AER?s to work out where your money is going to make the most profit.

APR

APR stands for Annual Percentage Rate, and is the amount of interest that you pay each year on a loan or mortgage. The lower the APR then the less you will pay yearly on that item of borrowing. Items with high APR?s like credit cards have APR figures around 15-20% whereas mortgages have a low APR figure of about 5-7%. The quickest way to compare loans is to look at their APR values.

Chip and PIN

Chip and PIN is the current system used to pay for items or withdraw cash using a credit or debit card. The card has a 4-digit PIN, or personal identification number, that you enter into a cash machine or till machine in order to retrieve money or pay for goods. The chip on the card holds information that, combined with the PIN, allows the machine to identify you as the correct owner of the card. Chip and PIN is more secure than the previous magnetic strip and signature technology that was used a few years ago.

Overdraft

An overdraft is a sum of money that you are minus within an account. If you go beyond the amount of actual money you have in an account, then you go into the overdraft. Many accounts have a pre-arranged limit that allows you to go overdrawn, which can be useful, as unauthorised overdrafts will cost you a lot in interest and fees.

Phishing

If you use online banking, then Phishing is a term you might have heard of but you might not know what it means. Phishing is a form of scam or illegal attempt to get hold of your bank details online so that they can withdraw money from them. When online banking started this was a big problem, but with increased security measures the problem is getting better. Most Internet browsers include a Phishing filter to stop such practices from occurring.

Standing orders and Direct Debits

Standing orders and Direct Debits are similar in some ways, but different in others. Both involve a regular amount being transferred from one account to another. Standing orders are a regular, fixed amount that you pay to another person or company, usually monthly. Direct Debits are an amount of money, which can be fixed or varied, that is removed from your account at set intervals. One example of a Direct Debit is mortgage repayments.

Getting advice

If you are unsure about any other banking terms, then visiting your local bank branch or looking online might help. Never be afraid to ask about something, because if you don?t understand something that is part of your account policy, you could lose money or not be taking full advantages of the features on offer to you.

Peter Kenny is a writer for The Thrifty Scot.
Please visit us at Best Current Accounts and Child Trust Funds
Visit http://www.thriftyscot.co.uk

Writen By : Peter Kenny

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A Guide To Career Development Loans

Jun 19

Posted by admin in Finance, Loans

If you are finding your current vocation a bit dull and want a lift, or feel that you could do more in your current career, then perhaps you should look at getting a career development loan. Career loans can help you to learn more about

your career by helping to pay for your extra education. If you want to get ahead in your career and invest in learning, then here is some information to help you learn more about development loans.

What are career development loans?

Career Development Loans, or CDLs, were launched back in 1988 and are part of a government program to help people further their education so that they can improve their skills within their chosen vocation. They are available for people who are employed, self-employed and unemployed, as long as they meet the criteria.

How do I apply?

Applying for a CDL is like applying for any other loan, in that you have to meet certain criteria in order to be accepted. If you are applying for a vocational course that lasts no longer than 2 years, or three years if part of the course is practical experience, then you could be eligible for a CDL. CDLs are available from a select few high street banks, and although you don?t have to be a customer of theirs, you will probably need to open an account with them to receive the loan.

Deferred repayment

The main advantage of career development loans is that they are what are known as deferred loans. This is similar to a student loan, in that you only start making the repayments after the loan term has finished, which is generally just a

little more than the length of the course you are taking. During the loan term, the Department for Education and Skills (DfES) pays the interest, and then once the loan finished you repay the loan using a fixed rate of interest. Although

the rate can vary from lender to lender, they are generally lower than normal personal loans because they are part of a government initiative.

How much can I borrow?

In general you can borrow between ?300 and ?8,000, and the CDL can be used to pay up to 80% of course fees and 100% of associated expenses such as travel and materials. However, if you are unemployed the loan may be able to cover all of

the fees for your course.

Investing in your future

CDLs are a great way to invest in your future career and give you the skills that you need to progress further. Although you have to pay the loan back with interest, you will not be paying anything during your course, and the money that

you pay back should be countered by the extra wages you can earn with your new skills. However, as with any other loan you should make sure that it is right for you and that you will be able to make the repayments once you finish the course.

Peter Kenny is a writer for The Thrifty Scot, please visit us at Loans and Secured Loans
Visit www.thriftyscot.co.uk/Loans

Writen By : Peter Kenny

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Credit Card Debts And How To Cope With Them

Jun 17

Posted by admin in Credit, Finance

Credit cards may be convenient since it gives you the luxury to spend more than what you can actually afford, but they can also land you in serious financial problems if not used properly. The use of credit cards in America is increasing by the day, and unfortunately, many are struggling with debt caused due to over spending. As a responsible credit card user you must try to lead a financially sound life, and you can begin by getting rid of your credit card debts.

Never overextend the use of your credit card, as that will land you in a debt with high interest. Getting into credit card debt is very easy, but it may be very difficult to come out of it. Therefore, it is better to be cautious from the beginning, rather than finding yourself in a financial quandary.

Stop overspending

It is never too late to pull yourself out of the debt you are buried in it. The most important step is to curb your temptation to overspend. Try to limit your expenses as far as possible by keeping one or two credit cards at the most. More cards will mean more balance to pay off. This will quickly put you in a cycle of debt.

Do not use your credit card to buy a lifestyle that is unaffordable for you; instead, use cash to make your purchases. If you want to buy something that you cannot afford, then you need to save money until you collect the required amount.

In case of an emergency, you will have to use your credit card, of course, but make a strategy for payment of the balance before using the credit card. To do this, you need to make a budget and see that you use your credit card according to the budget. If you find your expenditure going out of budget, then it is advisable to stop using the credit card.

Cover your balance

Making minimum payments for your credit card bills each month may seem to be convenient, but the truth is that you are pulling yourself into a never-ending debt trap. When you use your credit card try and make full payment for the balance that is created, keeping a check on its use until you actually pay off the balance. So pay the whole amount and that too on time in order to avoid late fees. If you maintain a good credit record you may even get certain considerations from your card issuer.

Avoid special services: As a credit card holder you may get tempted to get hold of various special services like travel clubs and life insurance offered by your credit card company, but be advised not to get into this trap, because even though they may seem alluring they are just added expense for you and add to your debt-burden.

Never use your credit card to pay your loan or advance, because if you are unable to pay off the balance, it will become a high interest loan for you. So you should use your ATM card or go to the bank.

In order to make the most of your credit card you must learn to use it wisely. Remember that staying out of debt is not difficult. All you need to do is to keep a check on how and when you use your credit card.

Writen By : Joseph Kenny

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What You Should Know About Credit Card Costs

Apr 14

Posted by admin in Personal Finance

Know Your cards\’ Annual Percentage Rate (APR)

The APR is the interest rate of your card. Every credit card offer must include the APR and whether the rate is fixed or if it will rise. Many credit cards have variable interest based on prime. If the credit card interest rate will change from time to time, the issuer also has to tell you the periodic variation rate of your APR.

You should also know how your interest is calculated. You\’ll read something in your credit card statement about a balance computation method. This method is a formula used to determine amount of the outstanding balance on which you\’re charged interest during each billing period. All traditional credit cards use the same formula as most of the other credit cards. However, from time to time you can find a credit card using a different formula that can be to your advantage or most probably turn financing with that card extremely onerous.

Cost of Finance

The finance charge on your billing statement is the cost of credit for the month. It\’s calculated by multiplying the outstanding balance by the periodic rate. If you have a small balance you won?t notice how costly your credit card can be, but you should always watch the rate instead of the resulting charge. Since the latter will depend on the amount you owe and the amount you spend.

Credit Card Limit

Know your credit card limit. This is the amount of purchases and cash advances you can charge to your card. It is a good idea to not max out your credit card, but if you know you are close, be sure to know your limit. Exceeding this limit will make you incur in penalty fees and additional costs that will add up to your already high debt.

Supplementary Fees and Other Terms

Be sure to know if your card charges fees and how much they are. Most credit cards charge fees for balance transfers, cash advances, late payments and going over your credit card limit. Some cards charge an annual fee too.

Most credit cards have a grace period, which is the time during the billing cycle in which you can pay off the balance to keep from paying finance charges. You can take advantage of this period to reduce your credit card debt.

Your lender will give you a statement of terms that will have all of this information in it when you are issued a credit card. If you can\’t find this information in the materials or don\’t understand them, call the issuer for clarification. Credit Card companies are required by law to provide all the information regarding their products costs and features. Make sure to exercise your rights and request this information.

Mary Wise, a professional consultant at Badcreditloanservices with twenty years in the financial field, helps people in the process of securing personal loans, mortgage, refinance or consolidation loans and preventing consumers from falling into the hands of fraudulent lenders.
At http://www.speedybadcreditloans.com/financial-articles.html you will find more useful tips and interesting articles on this subject and other financial related topics.

Writen By : Mary Wise

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