Payday lender

598 views
489 views

Published on

how to approach payday lender

Published in: Self Improvement
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
598
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Payday lender

  1. 1. Payday LenderWhatever goods or services youre buying customers want to know that theyre Financial products areno different and anyone seeking to borrow money wants to know that they are doing so from acompany that is honest, reliable and playing by the rules.If youre searching for a short term payday loan then there are a number of things you should be awareof to help ensure that your lender is operating their business properly.One of the main things to look out for is a provider that is upfront, clear and honest about providingtheir APR (annual percentage rate) and repayment policy.The APR should be openly displayed and, if you are looking online, a tool such as a calculator, should beprovided to help you easily work out your repayment costs.Remember that while the APR might look frighteningly high, these loans are designed to be very shortterm.An explanation of what APR is and how it works is also a useful thing for a lender to provide ontheir site.Payday loan companies should also be easily accessible and easy to contact with good customer service,not hidden behind email addresses and telephone numbers that are never answered.Read the small print about paying back your loan. Check if you can make fee free early repayments andmake sure you understand what will happen if you are late or default with a payment.If its your first time using a payday lender then its worth doing some research to check out thereputation and espectability of the brand.Ask friends and relatives if theyve used them and what they thought of the service. Look out for onlinereviews from happy or unhappy customers.If its the right loan product for you, then armed with these tips you can safely explore taking out apayday loan knowing that your lender is rustworthy, open and honest.
  2. 2. In order to find a respectable payday lender you should research online as this is the quickest andeasiest way to find out what other people are saying about payday loan companies.If you take a look at all the articles written about the payday loan lender and its industry, you will findthat the majority of them talk about all the bad and ugly which come from someone applying for apayday loan online.What happens to any of the positive or educational articles with payday loan lenders? Well, some mightsay that they are boring to read.Lets look at the popularity of talk show hosts on television. There are many educational newsworthystories which are broadcast weekly.Good ending or bad ending, the story spills the horrible or tragic details of someones life and that aloneis attention grabbing to will keep a listener engaged.Some of the most controversial stories are found on talk shows tend to be guilty pleasures by many aviewer.A good company wont be afraid of speaking to its customers and explaining clearly to them howthings work.News travels fast when somebody is portrayed to be "wronged" financially. The article is moreentertaining, it gets emotions involved, and we are more apt to share what we read to our friends.An intellectual article discussing the true APR for a payday loan lender may not keep everyones interest.No emotions get involved, no one was wronged, and the story topic of interest rates goes unread.When is the last time you heard the chatter in the break room about APR, how it is calculated and that itisnt a true number to report about payday lenders?They just have to keep trying to report the truth of the industry and hope that the knowledge will trickledown into their brains over time.A payday loan lender will continue to carry hope that they will be more welcome in the financialindustry, especially as banks and credit unions begin to fund similar high interest loans.Is there a hidden message to not trust a payday loan lender but instead get the same, but unregulated,loan through your bank.So how do the payday lenders educate the masses and stand up for themselvesagainst all the reports attacking their services?Its our nature to focus on emotional topics. The horrendous annual percentage rate being charged aperson who did not repay a two week term loan will catch someones attention.A two week loan spread out over 26 pay periods - does this sound like a short-term loan? An averageperson will have the payday loan paid off in less than half a year.Take the projected APR of 40% and cut it in half, you will have a loan at an APR very comparable tocredit cards interest rates geared towards debtors with low credit scores.
  3. 3. In this article, we will discuss the development of a SWOT analysis, its development, and how it can beused to acquire financing from a bank or investor.Payday Lenders generally are able to remain profitable and cash flow positive in any economic climatedue to the fact that they are able to render a lending and loan service that is in constant demand amongthe general public.One of the best aspects of this business is that they are able to generate highly gross margins from theirlending services.This story describing the events will be overly exaggerating the majority of loans, andreaders will not give it a second thought.A well written SWOT analysis will feature a strengths section, a weaknesses section, and opportunitiesdiscussion, and a threats discussion.Most importantly and first, you are going to want to focus heavily on the strengths that are associatedwith your Payday Lender.Foremost, you should again reiterate the high gross margins generated from your Payday Lender capitallending services while also showcasing the generally low costs associated with operating this type ofbusiness.Another important mention should be the relatively low cost overhead associated with operating thistype of business as they are typically located in high trafficked areas among low income people.Foremost, you should heavily discuss the fact that there are many other types of businesses thatoperate in a similar capacity to your Payday Lender.Also,you are going to want to discuss the default rates that are associated with operating this businesson a regular basis. The next section of the SWOT analysis focuses significantly on the weaknesses thatare associated with this type of business.Here, you should also focus on how you intend to mitigate losses as it pertains to payday lending.Youmay also want to discuss the relatively high start up costs that are associated with an Payday Lender.Next, you are going to want to focus significantly on the opportunities that your business will have toexpand during its first five years of operation.This may include developing new locations, hiring additional personnel, and engaging in a broad basedmarketing campaign that will ensure that your Payday Lender business is able to rapidly expand andrepay its debts on a timely basis.Finally, you are going to want to effectively showcase to your SBA loan banker or investor the threatsthat will be faced by your Payday Lender.We strongly recommend that you emphasize a number of these issues as it will be to the benefit of yourinvestor or banker to see how you intend to mitigate these risks as time progresses.
  4. 4. As always, we strong recommend that you work closely with a number of professionals including CPAs,attorneys, SBA loan consultants, conventional loan consultants, and other professionals that will ensurethat you have produced a SWOT analysis and business plan that is appropriate for both a bank and apotential investor.It is imperative that you have a clear understanding of the complex nature of raising capital for yourventure and by having a number of professionals in place - you will be in an outstanding position toreceive the capital you need in order to start your Payday Lender.Whenever you are in some financial emergency, the one who help you out to come up with the badsituation will be your best buddy. But your friends and relatives cant help you all the time.So you have to search for some other option. Hence to get another online friend as payday lender whois ready to support you in your financial troubles?Although this friend charge you a lot for his financial support but that should be fine with you if you aregetting the urgent money so easily and quickly.The entire payday loan application process should be online, secure and very simple. You just need toprovide some of your personal, professional and bank details and wait for the response.They should call you and after confirmation of your details, money should be transferred directly intoyour bank account.You should be able to easily get the money that you require so urgently just sitting incomfort of your home.
  5. 5. Your online payday lender should help you in providing cash advance at the time of its requirements,requiring your contact and employment information along with your bank account details.A recent bank statement or a check stub with all the information should be sufficient. They should useautomated technology to process your application within several minutes, and once you are approvedfor the cash advance, money should be deposited into your account within a day.With your online cash lender, you need not to drive around town to offices or banks, standing in endlessqueues and filling out lengthy forms. Their entire application process should be online; hence you donthave to fax copies of your paycheck stubs or social security payments.The idea that there are companies out there who do not have to follow state regulations in order toprocess payday loans is a scary thought for consumers.The states began regulating these short-term loans with the intention of trying to keep the consumersprotected from predatory lending practices.It seems that with the online payday industry booming, that there are off-shore and Native Americancompanies who do not have to follow the state guidelines for these laws.The off-shore businesses are not U.S. companies therefore do not have to follow the rules set up by theU.S. government. The Native American companies do not follow commerce rules due to sovereignimmunity.This immunity allows the tribal governments to make decisions without having to answer to the courtsystems. Tribal matters are usually thrown out when the area of concern is protected by sovereignimmunity.In other words, if you take out a loan with one of these unregulated companies and feel that your rightsas a consumer have been jeopardized, you may not go back and sue them in the American courts.There are thirty-eight states which set up individual regulations that cap the possible loan amounts andcreated ranges for fees and interest so the consumer is not taken advantage of.The idea behind this action was to take the ability of predatory and irresponsible lending practices out ofthe payday loan industry to give more power to the consumer.Some consumers who were not able to receive loans or the amount of money requested are now goingto unregulated businesses and falling deeper into debt as their finances crumble further from high feesand over the top interest rates.Being responsible lenders may not create the most revenue for the lender, but the responsibility oftaking care of the consumer in their financially vulnerable state is far more important to society. Thereare enough financial problems happening in todays culture, the idea to promote new ones is just notacceptable.
  6. 6. Another matter which is drawing concern for the Federal Trade Commission and the U.S. Consumerprotection Bureau is with identifying who is behind the actual operations of the tribal and off-shorecompanies.There has already been charges brought against a Kansas businessman and his affiliates for starting abusiness but have a tribal nation run the company as if it were a tribal based business.The businessman made millions being protected by sovereign immunity and is now in court proceedingswith alleged charges of operating his payday loan company in such manner.One of the first things to consider when choosing a payday lender, is how soon youll get the funds.Some lenders can provide you with the much needed cash within 24-48 hours, while others can give youthe amount within the day.If there is great urgency in your financial emergency, youll want to focus on the speed of the lenders inproviding funds. However, most payday lenders that who offer quicker cash usually charge higherinterests as well.If you can still afford to wait another day, it might be best to look for lenders with better interest andloan terms.You may also want to discuss how you intend to obtain additional capital in order to expandyour lending operations.Anytime youre getting service from a financial professional, you should do further research to find out ifthe lender provides a good customer service reputation. Ask around or look for reviews from formerclients or request references if the company happens to be new.Former clients will give you a feedback and idea on what to expect with regards to the lenders services.You should also take the time to review the lenders privacy policy before signing any form of contract.Getting a loan from a lender which tends to value customer service well will makes things easier for youto handle your situation with minimal hassles.Before entering into an agreement with the lender, make it a must to understand the entire terms andconditions of the loan agreement.And more importantly,. Does the lender charge a higher interest rate or fee for extending the loanterm? Many payday lenders will assess steep charges for loan extensions, so you should understandthese terms before you sign.Even if youre confident in your ability to pay the loan within the time frame, it is till advisable tounderstand the extra costs associated with if the payment should be extended.While payday loans usually carry higher interest rates if compared with traditional lenders, but the truthis, you can still shop around to compare the different rates that lenders offers.
  7. 7. Compare the initial rates offered and the interest charged when a loan is to be extended to get the bestdeal.If the lender requires you to provide them documents through fax - walk away. Faxing documentsto lenders will just waste hours of paperwork filling ups.These days, most payday lenders - both online and not - usually carry a "no fax" policy, so save yourselfsome time and look for these types of lenders.If the lender requests a copy of your credit information - walk away as well. Most payday lenders dontrequire or check credit history, and those that do are more or less just fishing for personal informationwhich they may use for other purposes.A lot of companies dont asses fees for first-time customers. Looking for lenders who give advantageoffers for first time users will save you a bunch; However, be sure to read and understand the fine printof the agreement and evaluate the lender on other criteria before signing any contract.Many people have made payday loans their preferred choice for getting money fast. If bills are not paidon time, one can lose access to basic necessities like water, electricity, and gas.Ability to borrow money when needed gives you peace of mind.Payday loans are fast and easy way toget cash. Chances are that there is at least one payday lender within two miles of where you live.With online payday lenders, you have access to money from the comfort of your home. With so manychoices sometimes it becomes difficult to choose whether to get a loan directly from a lender or get itthrough a broker.Two main ways of getting a payday loan are borrowing directly from a payday lender or borrowingthrough a broker. One needs to do due diligence to determine which is the best way to borrow money.Most people prefer getting payday loans directly from payday lenders. In this option, one is dealingdirectly with the lender cutting out the middle man or the broker.The costs are lower because the lender does not have to pay the broker a commission and would passthe savings to the customer.The borrower benefits from the lower cost of borrowing when the lender passes the commission costssavings to the customer. It is a win-win situation for both the lender and the borrower.Brokers are there to offer a service when it comes to getting loans. The broker works with many lendersand will compare the rates and terms offered by different lenders.They claim that a customer is not restricted by one lender and thus gets the best rate available. Thebroker will also fill out the necessary paperwork on behalf of the borrower.When a broker gets the customer to sign-up for a payday loan, the lender pays a commission to thebroker for getting them the business.
  8. 8. The lender will pass on the cost of commission to the borrower thus resulting in higher fees. Also, thebroker is most likely to promote a lender who pays the most commission. That may not be the best dealfor the customer.To pay higher commission the lender will charge higher loan fees. So it is highly unlikely that getting apayday loan through a broker works out in favor of the borrower.In conclusion, a borrower should always calculate the total cost of loan in the form of interest and fees.Working with direct payday lenders rather than the brokers has a better chance of getting a lower costloan.When you use payday loan lenders to help take care of unexpected expenses it helps soften the blow toyour budget. Some of the unexpected costs may have been preventable if the warning signs had beennoticed.Vehicles are big budget busters. Just when the warranty expires is a time when you can expect things tobreak. Its like they were programmed to last just so long.Many of these problems can be expected and high break down costs be prevented when proper careand inspection is routinely done along the way.Spending money to prevent disasters is a good investment. There are always the accidents and mishapswhich could not have been prevented.Preventative care will help keep the majority of them away or minimize the damage on your budget.Check you oil and tires regularly and change them accordingly.Medical bills can pile up fast. We cant prevent certain things from happening, but the better we takecare of body and health will help minimize doctors visits and some accidents.We cant stop living day to day, and we dont want to keep our children out of the playground. Maintainregular visits for checkups and our children up to date on their vaccinations to prevent as much aspossible.How often do you go to the dentist? Get a yearly checkup in order to find problems in the beginningstages. A filling is a more cost effective way to take care of a tooth ache then waiting till it needs a rootcanal.There is lots of talk about preventative measure. Money is no different. When we create and manage asavings account in order to help with unexpected costs, then we limit the need for direct payday loanlenders in emergency situations.It is good to know that they will be there just in case you havent saved enough or have had too manydemands on your saved cash.
  9. 9. Anticipate that you will need extra cash every now and then. Sometimes it happens more often thanothers. It is a part of life and we all must live through it.Money becomes difficult to manage, especially for those who live paycheck to paycheck,but we can planfor inevitable costs which will come in some shape or form.The internet is full of agencies trying to sell their services for a commission, claiming that they can getyou the best deal on payday loans.In many cases, you might think that the companies advertising on the TV or net are direct paydaylenders, while they are agencies. Make sure that you do not fall for their trick and read the privacydocuments to get a better deal on your cash emergency loans.The first thing you want to do is to go to local website directories and search for direct payday lenders.These companies will have an office in your state and a contact telephone number; not only a webaddress.Find out more about them on the description page and check if they can provide you with the financeyou need within the timescales you want the money.To find out which payday loan lenders are the most reputable in your area and can provide you the bestservice, you can check out some finance forums.There are thousands of them; try to select some where people from your region are gathering.Askquestions about others experiences with payday lenders and gather information about the company.Once you have found a couple of potential payday loan companies with a recommendation, you mightwant to check out their reputation among customers.Just because some people praised them it does not mean that their services are suited for your needs.Visit popular review sites and check their score before you would pay them a visit or call them.It is possible that the company itself has gone against the rules and posted comments on the forumthemselves. It is better to be safe than sorry.
  10. 10. Once you land on a payday loan provider website, you need to check the privacy page to see if they selltheir own services or act as an agency. This will need to be detailed in the "third party links" section.It is an important step, because sometimes you end up getting dozens of calls a day after submitting anonline payday loan application, which is something nobody needs.Once you have made sure you are on the right website that belongs to the direct payday lenders, youare good to submit the application.These days, we are all looking to make our pay stretch further each month, but sadly there are oftentimes when there just isnt enough spare cash to cover everyHowever, as with all financial products you need to look closely and do your research before making anycommitments or you might find yourself dealing with an unlicensed lender.The market is overflowing with payday lenders and companies offering any number of short-term loansand in theory these loans can be of advantage when your monthly salary just wont stretch far enough.A payday loan works by lending you a small amount of money, usually around £100, within a quickturnaround so you can pay your bills within 24 hours.The application process is quick and simple, you just need to confirm that you are over 18, hold a UKbased bank account and have the means to repay the loan amount within the time frames agreed.However, alongside the many legitimate payday lenders you are likely to find a number of unlicensedlenders offering what seems like similar terms to other loan agreements.Like any product that involves a financial commitment, you need to check your chosen payday lender isauthorised and that your loan will be secure.Unlicensed lenders operate outside the law and set financial standards, meaning they can make theirloan terms rather ambiguous on first look and only after you have signed up may you realise that theterms of the loan offered are very bad.Payday loans are a great short-term financial fix and because of this you will find a higher interest ratethan on other loans. However, borrowing from an unlicensed lender could mean you will end up payingan even higher rate than with other payday lenders.As with any loan you must always aim to pay back the loan amount on time, but missing a payment withan unlicensed lender means you are likely to get harassed by your lender and incur extortionate costs,which can be very daunting.All of this can be avoided by doing your research before choosing a payday lender and finding the rightcompany for you and your situation.Look closely at every lender you are considering and make sure they are authorised before making anykind of financial commitment.

×