In this article you will get information about common questions being raised by payday loan borrowers to lenders. The common questions such as “What is a payday loan?”, “What are short term loans?”, “What is interest rate?”, “How soon to pay?”, “Does it require payroll information?”, “Do lenders check you credit history?”, and same day bank transfer possible etc. Borrowers are also asking questions such as “Is it risky loan, spiraling into high interest loan?” etc.
1. What is a Payday Loan
This loan is an unsecured loan given to borrower till he or she receives next paycheck. In other words loan is given against the guaranty of next paycheck. Typically the need of this loan comes as emergency need on part of borrower such as car repair, medical emergency or unexpected bills etc. These loans existed earlier also and were called as private loans. These loans came with higher interest rate. The reason for higher interest rate was readily available and with less documentation. Same loan features are provided under payday loan term. The difference is loan is given against next paycheck. The length of loan is 2-3 weeks.
2. How to Qualify for paycheck Loan
Well qualifying process for paycheck loan is easy and does not require long procedural documentation process as in the case of traditional loan with banks. The basic requirements of loan are very few:
1) Applicant must have a current job
2) Applicant should have age more then 18 years old.
3) Applicant should be United States Citizen
4) Applicant must have a saving or checking account with any American bank.
5) Applicant must earn at least $1000 per month to avail a small loan as $200
Please be aware some states in America have their own laws governing payday loans. In some state such loans are banned and also length of the loan period is fixed.
3. Length of Loan process
Since a payday loan is backed with technology the approval process is fast and typically money is wired to applicant’s account with 24 hours. Different states and lenders have their own terms an conditions, before applying check with staff for complete details. The online process is simple and can be completed in few steps. The important thing to remember is during this online application process you will be entering personal details, social security, driving license number, and payroll details. Be sure and confirm first with customer care and get all details you want to know.
4. Can person with bad credit apply for such loan?
Most of the lenders are able to work with people with bad credit. Since loan is given against payroll check from current job and that is the reason lenders omit background d check. However different lenders have different set of terms and conditions.
5. Length of Loan term
The typical length of loan term is 2-4 weeks max. Since loan is given against your monthly or bi-weekly payroll check the loan length is less then 4 weeks.
6. How secure is online application process?
Well lenders are dealing with applicant’s personal, payroll information so they have placed max security precautions on their website. If you read information on their website you will see Secure Socket Layer (SSL) encryption technology seal on their website. They have to ensure users are given secure way to input their personal details.
7. When to use this service?
This service shouldn’t be used as excuse to get some extra cash for party, vacation etc. Use a payday loan only in very emergency situations when you are not able to arrange funds from any other sources. short term loans should be availed only when you know you can pay back with in stipulated time. NEVER TAKE MULTIPLE PAYDAY LOANS.
8. Why are so much negativity about these loans?
Since these loans come with higher interest rates and if not paid on time lenders will raise penalties and interest more. Some people use multiple loans and end up paying multiple higher interest on loan and eventually fall behind the payments and come under debt. Also some lenders charge higher penalties once borrower misses due payment. All these things have made paycheck loans less popular.
9. How much documentation is required?
Since this is online application process most of the information is your personal details and payroll information. Some lenders may require extra information if the required given information through online application is not enough to award a payday loan.
10. Read, Review and Confirm
Loan borrowers should read, review terms and conditions of loan lenders before applying for a loan. Get you clarifications confirmed from customer care staff.
Student Loans are a bit overwhelming at first. Especially when you’ve just graduated high school and you have so much other stuff on your plate.
I remember when I graduated high school, the only thing I wanted to know was “What will it take for me to get a college degree”. Whatever it was, I was prepared to do it. So I applied for financial assistance using FAFSA (the letters stand for Free Application for Federal Assistance in case you were wondering). Then once I actually got to college, I was ushered into a room and made to sign all this paperwork with the underlining idea being: Unless you’re going to pay your tuition cash or through some scholarship fund, you need to sign these student loan documents. I ended up signing and practically forgot about my student loans until I graduated. Then I got the bill…. OH BOY!
I believe everyone should know something about student loans before signing your life away… I mean the loan documents. Not to say that student loans are BAD per say, just that an informed person is more prepared to deal with something than someone who doesn’t know their hands from their feet.
So let’s get into it!
What kind of Student Loans are there?
The first one we’ll discuss is:
The Direct Stafford Loan
The money being borrowed from this loan comes directly from your good ol’ Uncle Sam. Yes, Uncle Sam cares about you too! Direct Stafford Loans are “low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school.” I’m sure you’re asking what the requirement is to receive the Direct Stafford Loan and as with all complicated questions, the answer is, IT DEPENDS.
There’s two types of Stafford Student Loans
There’s the Subsidized Stafford Loan and then there’s the Unsubsidized Stafford Loan.
With the Subsidized Stafford Loan, you are not charged interest as long as you’re enrolled into school at least half-time and during grace periods and deferment periods. The Federal Government actually pays the interest for you while you’re still in school. So the loan value is actually the same amount you really borrowed. Sounds great right? Well there’s a catch. The catch is that this loan is dependent on the financial needs of the student. This loan isn’t available to everyone, its availability actually dependent on what tax bracket you and your parents fall into. Another catch is that your school actually determines how much you can barrow.
The second type of Stafford Loan is Unsubsidized Stafford Loan. This type of loan is geared toward those who are qualified for Subsidized Stafford Loans, but need a little more money to pay their tuition as well as those that aren’t qualified for Subsidized Stafford Loans but still need money to pay their tuition. Just about every household is eligible for Unsubsidized Stafford Loans.
How is that possible? Well for Unsubsidized Stafford Loans interest begins accumulating from the first time money is paid out. So the very first semester that your Unsubsidized Stafford Loan is applied to is also the beginning of interest accumulation on your loan. What that also means is the longer you decide to stay in college, the more interest will accumulate on your loan.
What a great way to motivate you to complete your degree in 4 years right? Well, not really, but it’s definitely worth keeping in mind. However, as a word of advice, you should try paying at least your accumulated interest while your still in school to avoid blowing up your loan even further. By doing so, you could get the same benefit that Subsidized Stafford Loans give by only being responsible for the amount of your loan by the time you graduate. If you decide not to pay anything towards your loan while still in school, you’ll end up with a hefty bill by the time you graduate since your accumulated interest ends up accumulating its own interest as well.
Another important point about Unsubsidized Stafford Loans is that, like Subsidized Stafford Loans, your school decides on the amount you receive. The Unsubsidized Stafford Loan isn’t quite the blank check you wished for, but it does help take care of those semesters at more expensive schools.
How much money can you barrow with the Stafford Student Loan?
Well as I mentioned above, ultimately your school decides that, but they also have to work within the limits set by the loan. The maximum amounts your school could allow you to barrow are listed below:
Dependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans)
First Year: $5,500- No more than $3,500 of this amount may be in subsidized loans.
Second Year: $6,500- No more than $4,500 of this amount may be in subsidized loans.
Third Year: $7,500- No more than $5,500 of this amount may be in subsidized loans.
Maximum Total Debt from Stafford Loans When You Graduate* (aggregate loan limits): $31,000-No more than $23,000 of this amount may be in subsidized loans.
Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans)
First Year: $9,500-No more than $3,500 of this amount may be in subsidized loans.
Second Year: $10,500-No more than $4,500 of this amount may be in subsidized loans.
Third Year: $12,500-No more than $5,500 of this amount may be in subsidized loans.
Maximum Total Debt from Stafford Loans When You Graduate* (aggregate loan limits): $57,500-No more than $23,000 of this amount may be in subsidized loans.
Graduate and Professional Degree Student
First, Second, and Third Years: $20,500-No more than $8,500 of this amount may be in subsidized loans.
Maximum Total Debt from Stafford Loans When You Graduate* (aggregate loan limits): $138,500-No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.
* You can spend more than 4 years in college but the maximum total amount you barrow from the Stafford Loan cannot exceed the limit above.
Here’s an interesting fact:
Outstanding Student Loan Debt in the USA is about $850 Billion and growing while consumers owe about $828 billion in revolving credit, including credit card debt.
Article Source: http://EzineArticles.com/6175234