Feeling the Crunch - Financial Crisis
- By Jerry Daniels
- Published 10/29/2008
- Loans
- Unrated
As we've seen crude oil and gas prices reach all-time high records, we are feeling the crunch in our budgets. There are also several basic food items that are seeing higher prices in the markets.
Most people have not had a chance to increase their wages to pay for the cost of goods nowadays. Some economists believe that the prices of these essential, basic items will decrease over time or that our wages will increase to make these items more affordable. This gives little relief to us now and many people are turning to short-term lending such as credit cards, personal loans, and cash advance loans to help meet their basic needs.
There are many lenders out there willing to provide services for consumers looking for short-term lending solutions. Before a person chooses a loan, they should carefully consider what their options are before they choose a loan that meets their needs.
If a person needs cash for less than a month, a cash advance is a good option for this type of situation. Payday loans are here to help people meet short-term, urgent obligations such as unexpected expenses, car repairs, or medical emergencies.
Each lender is different and each state has their own laws regarding fast cash loans. Lenders offer anywhere from $200 to $1,500. A person who avails a payday loan needs to understand that this type of loan is to be paid back usually within a two to four week period. Most lenders require an active checking account, proof of income and proof of residency.
To make this industry even easier and more convenient to work with, there are online lenders to help you get your money faster. Most lenders who advertise via the internet are very focused on giving consumers exceptional service.
Borrowers should seek lenders who offer consumer safeguards such as:
1. Licensing in each state/province where they offer loans. By dealing with locally licensed lenders, consumers can be assured that they are provided safeguards that other unregulated lenders are not willing to provide. If a lender is locally licensed it should display the state issued license on its website.
2. Adhere to best practices of state and national associations. Lenders who belong to state and national associations such as Community Financial Services Association (CFSA), pledge to go above and beyond what state statutes require and work with borrowers to ensure they can afford and repay their obligations. Lenders who are involved in these associations are community minded and will not participate in unfair or deceptive advertising practices.
3. Clearly display the cost associated with the loan. Before a person applies for any loan he or she should ensure the fees associated with that loan are clearly displayed. Cash advance providers are required by law to clearly display all of the fees associated with their loans using an annual percentage rate (APR).
Although cash advance loans average about two-weeks in length, the APR serves as a good comparison tool between loan products. Some credit card and short-term products offered by other financial institutions hide the true APR of the loan with "hidden fees" such as participation charges, late charges, enrollment costs, and other seemingly innocuous charges.
However, these add-on fees can rack up. For example, a $30 late charge on a $100 credit card balance can run a borrower 1600% APR. Consumers should ask their lender to include all of the fees associated with the loan in the APR so they can make an informed decision before borrowing.
While there is increasing demands on consumers' wallets, said consumers should let their voices be heard to their legislatures to protect their right to have access to credit. When choices are limited to getting money, borrowers may be forced to go through lengthy, complicated and more expensive options just to make ends meet. Borrowers should only avail loans through lenders.
Most people have not had a chance to increase their wages to pay for the cost of goods nowadays. Some economists believe that the prices of these essential, basic items will decrease over time or that our wages will increase to make these items more affordable. This gives little relief to us now and many people are turning to short-term lending such as credit cards, personal loans, and cash advance loans to help meet their basic needs.
There are many lenders out there willing to provide services for consumers looking for short-term lending solutions. Before a person chooses a loan, they should carefully consider what their options are before they choose a loan that meets their needs.
If a person needs cash for less than a month, a cash advance is a good option for this type of situation. Payday loans are here to help people meet short-term, urgent obligations such as unexpected expenses, car repairs, or medical emergencies.
Each lender is different and each state has their own laws regarding fast cash loans. Lenders offer anywhere from $200 to $1,500. A person who avails a payday loan needs to understand that this type of loan is to be paid back usually within a two to four week period. Most lenders require an active checking account, proof of income and proof of residency.
To make this industry even easier and more convenient to work with, there are online lenders to help you get your money faster. Most lenders who advertise via the internet are very focused on giving consumers exceptional service.
Borrowers should seek lenders who offer consumer safeguards such as:
1. Licensing in each state/province where they offer loans. By dealing with locally licensed lenders, consumers can be assured that they are provided safeguards that other unregulated lenders are not willing to provide. If a lender is locally licensed it should display the state issued license on its website.
2. Adhere to best practices of state and national associations. Lenders who belong to state and national associations such as Community Financial Services Association (CFSA), pledge to go above and beyond what state statutes require and work with borrowers to ensure they can afford and repay their obligations. Lenders who are involved in these associations are community minded and will not participate in unfair or deceptive advertising practices.
3. Clearly display the cost associated with the loan. Before a person applies for any loan he or she should ensure the fees associated with that loan are clearly displayed. Cash advance providers are required by law to clearly display all of the fees associated with their loans using an annual percentage rate (APR).
Although cash advance loans average about two-weeks in length, the APR serves as a good comparison tool between loan products. Some credit card and short-term products offered by other financial institutions hide the true APR of the loan with "hidden fees" such as participation charges, late charges, enrollment costs, and other seemingly innocuous charges.
However, these add-on fees can rack up. For example, a $30 late charge on a $100 credit card balance can run a borrower 1600% APR. Consumers should ask their lender to include all of the fees associated with the loan in the APR so they can make an informed decision before borrowing.
While there is increasing demands on consumers' wallets, said consumers should let their voices be heard to their legislatures to protect their right to have access to credit. When choices are limited to getting money, borrowers may be forced to go through lengthy, complicated and more expensive options just to make ends meet. Borrowers should only avail loans through lenders.
Jerry Daniels
Jerry Daniels is a very trusted resource in the financial industry and has written many articles relating to consumer services and Personal Loans. He has been a major supporter of the consumer advocate since the late 70's. Contact Info: Jerry Daniels jerrydaniels08@gmail.com http://www.PersonalLoansZone.com
View all articles by Jerry Daniels