Yes.. there are still pirates. But they call themselves financial institutions.
If you want to get rich these days and do it legally, you'll want a career in financial services. Or for that matter, you can hang out on the fringe of those service providers as a small business and still do quite well. What am I talking about ? Well, today, I'm talking about all those Cash Advance and PayDay Loan businesses popping up in your neighborhood and on the internet.
What are they ? Well, they are short term loan sharks to be blunt. They offer loans of up to $1,500 with up to 30 day terms and charge a butt load of interest and fees. For example, a typical Payday loan would require you to provide proof of employment ( usually 2-3 pay stubs ), a checking account that has not been in the red for the previous 30 days, and a drivers license. You write a check for say $1,000 plus fees. For a 14 day loan that would be perhaps an additional $150. They agree to hold your check until your next payday, and deposit $1,000 in your checking account the next day. When payday rolls around they redeem your check for the agreed $1,150.
That $150 may not seem like a lot if you are desperate for money, but in financial terms you just paid 15% for a 2 week loan. Annualized that would be 26 x 15%, or an APR of 390% !
It can get worse. Some lenders will allow you to "roll-over" that loan for another 14 days, for... of course... another $150. So now you have paid $300 to borrow $1,000! That's 30% for 28 days !
While the "Fast Cash Online" industry certainly fills a need for emergency cash, the system is being abused and the consumers are the losers. Before taking one of these expensive loans, consider other options. Will your credit card provide a cash advance ? DO you belong to a credit union ? Many credit unions offer short term cash advances or installment loans.
I've written considerably more on this subject on a website I just launched. Visit paydayloanpicker.com for definitions and terms regarding Payday loans, and read what the Federal Trade Commission and Better Business Bureau has to say about your rights and the laws that regulate these financial lenders.
Enjoy.
What are they ? Well, they are short term loan sharks to be blunt. They offer loans of up to $1,500 with up to 30 day terms and charge a butt load of interest and fees. For example, a typical Payday loan would require you to provide proof of employment ( usually 2-3 pay stubs ), a checking account that has not been in the red for the previous 30 days, and a drivers license. You write a check for say $1,000 plus fees. For a 14 day loan that would be perhaps an additional $150. They agree to hold your check until your next payday, and deposit $1,000 in your checking account the next day. When payday rolls around they redeem your check for the agreed $1,150.
That $150 may not seem like a lot if you are desperate for money, but in financial terms you just paid 15% for a 2 week loan. Annualized that would be 26 x 15%, or an APR of 390% !
It can get worse. Some lenders will allow you to "roll-over" that loan for another 14 days, for... of course... another $150. So now you have paid $300 to borrow $1,000! That's 30% for 28 days !
While the "Fast Cash Online" industry certainly fills a need for emergency cash, the system is being abused and the consumers are the losers. Before taking one of these expensive loans, consider other options. Will your credit card provide a cash advance ? DO you belong to a credit union ? Many credit unions offer short term cash advances or installment loans.
I've written considerably more on this subject on a website I just launched. Visit paydayloanpicker.com for definitions and terms regarding Payday loans, and read what the Federal Trade Commission and Better Business Bureau has to say about your rights and the laws that regulate these financial lenders.
Enjoy.
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