Payday loans are advertised everywhere it seems. Payday loans are also poor for your pocketbook. For quick cash, many will resort to payday loans to “tide me over ’til payday.” But, payday loans come with a steep interest rate. Some payday loans will come with interest rates as high as 400 to 500 percent, depending upon whether you roll them over from one payday to the next.
Most payday loans are arranged so that a borrower writes a post-dated check to the lender, for say 2 weeks. When the 2 weeks are up, the payday loan is cashed, which includes the predetermined interest. Because of the Federal Truth in Lending Act, the lenders must disclose the interest charged to the borrowers and finance charge. Let’s say for example that you take out a payday loan for $500 for two weeks and pay the lender $75. You’ll write the post-dated check out for $575, receive immediate cash of $500 and at the end of two weeks the lender will cash the check. The interest rate on this loan comes in at a whopping 391-percent annual percentage rate. There may be an additional finance charge as well.
Before you decide on the quick fix that payday loans offer or get yourself in a situation that your alternatives are few, consider a loan from a credit union or small lender, employer, family member or even a cash advance from your credit card vendor. Most people who resort to payday loans do so time and again, so a little planning for a cash crisis may help avoid the steep interest rates.
If you continue to get a payday loan fix, then start making additional plans to get off the wagon. Talk to your creditors for more time to pay bills. Get overdraft protection for your bank account. Make a budget and stick to it, factoring in a little extra personal cash for impulse buys. If you believe you have been defrauded by your lender for unscrupulous practices, then file a complaint with the Federal Trade Commission. The FTC helps prevent fraudulent, deceptive and unfair business practices and help the consumer avoid such places of business.
On the other hand, you may be in a bind and need the instant cash that payday loans provide and are confident that paying them back will not be a problem. There are many sources for payday loans online that can help you get out of your cash bind. Remember, though to take the time to choose carefully and comparison shop since as a consumer you do have many choices in lenders.
Stated income loans require little verification to receive money. Stated income loans generally require no pay stubs, W2’s or tax returns. For those who have difficulty verifying their earnings, stated income loans may just be the answer. Usually this group includes borrowers that make tips, bonuses and commission as their sole form of income or are simply self-employed or are retired and live off of their investments.
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When considering a stated income loan as an alternative to traditional borrowing methods, one does have to have verifiable employment and some cash reserves or assets. Stated income loans are also known as No Income Verification Loans (NIV).
Several different types of stated income loans exist, depending upon the lender. Some stated income loans are available for those with FICO scores as low as 580 – 640. Usually the borrower’s statement or assertion of their income is enough to get the loan along with some assets. There are, however, some leaders that offer stated income and stated asset loans, which means that neither the income nor the assets are verified by the lender. These loans generally carry a slightly higher interest rate for the borrower since the lender accepts more risk with this method.
There may be some other caveats when applying for a stated income loan such as being with the same employer for 2 years, several credit accounts and no bankruptcies within the last 3 years. Also, the borrowers title must match closely to the stated income. As an example, a high-school janitor reporting $10,000 per month in earnings would be suspect.
Stated income loans can be used for new purchases, refinancing your current home and home equity lines of credit. Some lenders even offer stated income loans for commercial and non-residential real estate as well.
Stated income loans may also be desirable for privacy-advocates who are willing to pay a little more in interest rates in order to keep their money matters private. No matter which kind of borrower you may be, stated income loans are at least worth considering if an alternative is what you need.