In the past few years, advertisements for payday loans are popping up everywhere, on store signs, in newspapers, on billboards, and especially on the Internet. Some payday loan companies advertise by direct mail, so you may even see ads arriving in your own mailbox.
Sometimes they’re called cash advances, payday advances, check loans, or even post-dated check loans, but all of those terms mean essentially the same thing, a loan to carry you over until your next payday. While you’ve seen the ads, you may not know what payday loans are, how they work, or how to go about obtaining one.
A payday loan is a short-term loan, generally for 14-30 days, that is paid back by writing a post-dated check, or agreeing to an electronic withdrawal, to be deducted from the borrower s bank account on their next payday. Borrowers may be eligible for loans of anywhere from $100 to $1,000, depending on the lender s policies and the borrower s income. Just like every other type of loan, there are advantages and disadvantages to this type of borrowing.
On the plus side, payday loans are easy to apply for, and easy to get. Borrowers are asked to …
Finish reading: Payday Loan Cash Advantages here
Most home equity line of credit (HELOC) loans are indexed to the bank prime loan rate. This means that when the prime rate changes, the rate on your HELOC loan will change too, typically within a few weeks time.
When prime increases 100 basis points (one full percent) the typical home equity line of credit borrower with a $30,000 balance, pays an additional $300 in yearly interest costs. If you make monthly payments according to a fixed schedule, the rise in rates also means less of each payment dollar goes towards reducing principal. In other words, it will take longer to pay off the loan balance. Interest rates seem likely to continue rising (at least in the short run), so it is worthwhile to look at some strategies available to HELOC borrowers to help control the damage to their wallet:
1. 0% Balance Transfer Offers – If you have good credit and are attentive to details, transferring some or all of your HELOC debt to a 0% credit card can be a viable strategy. You can ride the 0% offer until it expires knowing that you can always payoff the balance with a HELOC check (effectively transferring the balance back to the HELOC). A few downsides of this strategy are…
Finish reading: Six HELOC Strategies for a Rising Interest Rate Market here
Debt consolidation, equity loans, credit counseling, debt management plans, even Chapter 13 bankruptcy it doesn’t matter which of these debt programs you’re talking about. They all suffer from one fatal flaw, the number one problem that causes most people to fail at eliminating their debts through these techniques. Can you guess the problem?
It’s probably not what you’re thinking. It’s not the fees, interest rates, or the quality of the companies behind these debt solutions. No, the number one problem with most debt programs is that they…
Finish reading Debt Relief — Why Most Programs Have A 75% Failure Rate here
