Finding the Right Tax Agent for Your Tax Needs

Posted by Rana & filed under Tax & Bankruptcy Law Information.

Each year, many Americans wrestle with the issue of finding the right tax agent, one who specializes and is experienced in the tax debt areas they need help with. Before spending their hard-earned money, taxpayers should consider the following suggestions in order to consult the tax agent who best suits their situation and needs.

The title ‘tax agent’ encompasses a number of financial designations, including the following:

Certified public accountant (CPA): This tax agent specializes in the preparation of tax returns, financial statements, and business books. A CPA can represent individuals in an IRS audit. Financial planner (FP) and certified financial planner (CFP): This category of tax agent focuses on the assessment of investments, individual needs and planning to assist taxpayers in achieving their financial objectives. Enrolled agent (EA): An EA can represent taxpayers in an audit before the IRS. Tax attorney: This tax agent is an expert on legal issues and litigation. Unlicensed tax preparer: Although this kind of tax agent does not have a designation, he is still qualified to prepare tax returns.

A tax agent should possess strong organizational, time management, and analytical skills. More importantly, he should be trustworthy and maintain the confidentiality of individuals and businesses.

To find the right tax agent, taxpayers should ask family, friends, business owners, financial advisors, and attorneys for referrals. It is always helpful to ask someone with a similar tax situation. Investigating whether any complaints have been filed with the Better Business Bureau is also important.

In their search for a competent and trustworthy tax agent, taxpayers will find it useful to ask the following questions:

The tax issues that the tax agent specializes in (ex: tax debt relief) The licenses or designations held by the tax agent (ex: whether he or she is a member of a reputable industry organization such as the National Association of Tax Professionals) The length of time the tax agent has been in the tax business and his experience in handling your type of tax issues The fees charged by the tax agent The individuals who will perform the work (outsourced or prepared by the tax agent himself) The time it will take to complete the work The privacy policy that the tax agent maintains The participation by the tax agent in continuing education to stay current References

Taxpayers who value speed and convenience can find a tax agent by heading to one of the nationwide retail tax franchises, such as Liberty Tax Service, H&R Block or Jackson Hewitt, which offer reasonably-priced tax services.

On the other hand, those seeking a personalized service should consult local independent tax firms. The tax agent in this type of firm often works by appointment only.

A tax agent in a retail franchise or an independent firm usually charges about the same rate for tax debt help or any other services. The choice of which to opt for depends on the taxpayer’s priorities—convenience, location, and expertise.

Taxpayers can find a tax agent by visiting www.taxprofessionals.com. Alternatively, they can contact the National Association of Tax Professionals (NATP), an organization committed to excellence in the tax field. To learn more about this association, taxpayers can visit www.natptax.com.

In conclusion, taxpayers looking for the right tax agent should shop around and choose carefully. A tax agent should be knowledgeable, helpful, courteous, and dedicated to the client’s dossier. After all, the taxpayer’s money is on the line.

Tax Deduction and Tax Relief: Cutting Some Slack for Taxpayers

Posted by Rana & filed under Tax & Bankruptcy Law Information.

Let’s face it, taxes can be quite taxing. With the help of tax deduction, however, a considerable weight can be taken off taxpayers’ pocketbooks. Since the IRS collects only on an individual’s taxable income, taxpayers can cut their tax bills by lowering their taxable income through the mechanism of a tax deduction. What follows is a discussion of tax deduction basics as well as tax debt relief and tax debt settlement options.

What is a tax deduction?

A tax deduction is the amount subtracted from the taxable income, thus resulting in a lower tax liability. The larger the tax deduction, the smaller the tax liability. A tax deduction comes in two forms- standard and itemized. Taxpayers utilize the larger of the two deductions to reduce their taxable income.

What is a standard deduction?

A standard deduction is the fixed amount that taxpayers may deduct from their adjusted gross income (AGI) to compute taxable income. With this method, taxpayers need not record each potential tax-deductible expense throughout the year. The amount of the standard deduction depends on the taxpayer’s filing status and the number of dependents he or she has. Most taxpayers use this type of tax deduction, which can be claimed on one of three individual tax returns- 1040, 1040A or 1040EZ.

For 2007, individuals filing a single tax return took a standard tax deduction of $5,350. Married persons filing a joint return, or a qualifying widow or widower with a dependent child, took a standard tax deduction of $10,700. Married persons filing a separate return took a standard deduction of $5,350, and individuals filing as head of household received a standard deduction of $7,850.

Who does not qualify for a standard deduction?

An taxpayer who is married and filing a separate return, and whose spouse itemizes deductions An individual filing a tax return for less than a 12-month period, and An individual who was a non-resident during the tax year, or was both a non-resident and a resident alien during the tax year.

What is an itemized deduction?

Filers who do not qualify for this type of tax deduction will have to itemize. A taxpayer makes an itemized deduction if the amount of his allowable deductions is greater than his standard deduction. The taxpayer must complete the IRS form 1040 and Schedule A. Itemized deductions begin phasing out at higher incomes. For this kind of tax deduction, tracking costs by collecting receipts and recording the expenses is recommended.

Some of the categories where itemized deductions apply are:

Home mortgage interest Real estate taxes State and local taxes Personal property taxes (i.e. car registration fees) Investment-related expenses Medical and dental expenses Tax preparation fees Contribution to charitable organizations Miscellaneous expenses (job-related expenses such as travel, lodging and meals)

What is tax debt settlement?

Tax debt settlement is a method of addressing problem debts without having to file for bankruptcy. Creditors agree to accept a percentage of the amount owed by a taxpayer (usually around 50% or less) to settle the account, and the remaining balance is forgiven. IRS tax debt settlement is available to individuals who find themselves indebted to the IRS.

What tax debt relief methods are available to debtors?

Debtors can avail themselves of the following five strategies for IRS tax debt relief:

Installment agreement Partial payment installment agreement Offer in compromise (i.e., making a lump sum or short term payment to pay of the IRS at a reduced dollar amount) Not currently collectible, whereby the IRS voluntarily agrees not to collect on a tax debt for a year or so, and Filing for bankruptcy (i.e. discharging tax debts by way of a Chapter 7 or Chapter 13 bankruptcy petition)

In conclusion, when it comes to taxes, there may be no free lunch but there are discounts. A tax deduction, be it standard or itemized, is the mechanism by which taxpayers can reduce their tax bill. As for taxpayers who owe money to the IRS, they need not despair, for tax debt relief measures and tax debt settlement are at their disposal.

Debt Consolidation is Not a Quick Fix

Posted by Rana & filed under General Debt & Loan Consolidation Information.

Spending more money than you make has become the American way. Interest rates are lower than they’ve been in decades, tempting some consumers to borrow more to ease current credit anguish.

Debt consolidation companies often prey on those who are scared of debt. The objective should be to consolidate various higher-interest balances into one manageable and less-costly package.

Beware: sometimes consolidation increases total payments. Quick fixes are fictitious tales sold to consumers who are desperate.

“We’re not actually getting rid of debt with a consolidation loan, we’re restructuring it in a more manageable way,” instructs University of Wisconsin Extension financial specialist Michael Gutter. “Oftentimes, consolidation loans can end up costing money; fees, closing costs. And if you’re spreading the debt over a longer period, a greater finance charge in the long run.”

The problem with debt consolidation is it can feed the tendencies that put you in this predicament in the first place. In some ways, it’s like giving drugs to a drug addict. All this does is heighten the addiction and extend the length of their withdrawals.

Additionally, if you are looking towards debt consolidation for a solution, odds are that you won’t qualify for the low interest rates “As Seen on TV.” Those go to people who are responsible and have good credit.

Still, if your New Years resolution was to be disciplined in spending and payments, debt consolidation may be worth the risks.

Debt Consolidation Loans = Easier Management

Convenience and “saving time” should not be underestimated; time saves money. Instead of paying 15 creditors who are charging different rates at different times of the month, you take on one big loan and pay off all those accounts. This results in a simple payment on that loan once a month.

Again, this probably won’t result in direct savings. If you are already in debt the interest rates charged will be high. Shop around to find the service that will offer the best rates. Once found, you now have the cheapest consolidation service to compare your current payments with.

Using a loan calculator, sum the total of fees and interest on all your existing accounts. Compare those numbers with consolidation options to gauge what method will save the most money.

Finally, double check to make sure the chosen lender is reputable. There are many services that are out to make a quick buck and are scams. Through research and careful evaluation you will avoid these traps.

Financial recovery is not attainable through a quick fix. Finding ways to better manage debt and spending are sure fire ways towards financial recovery.

Refinance Your Mortgage For the Right Reasons and at the Right Time

Posted by Rana & filed under Home & Mortgage Refinance Information.

Among the list of assets a person can own, a home is one of the best.  Generally, the property value of a home will increase as the years pass. And during the course of home ownership, the homeowner is investing their hard-earned money into their own financial holdings, rather than in a landlord’s financial holdings. The reasons and benefits of owning a home are many, so most homeowners who experience financial problems will sacrifice many other things and activities, before they even consider giving up on keeping their home.

When personal and financial circumstances change, some homeowners may begin looking into the possibility of a mortgage refinance loan.  There are many reasons a person might need mortgage refinancing, but solving financial problems and home improvement are two of the most common reasons.  Fortunately, a mortgage refinance loan is easy to apply for and the requirements to meet are minimal.

Mortgage refinancing means that the initial loan used to purchase the home is being paid off by the proceeds from a new loan.  It might sound nonsensical to replace one loan with another; however, there are many reasons that mortgage refinancing could be to a homeowner’s benefit.

One reason a homeowner might choose mortgage refinancing is to save money on their monthly payment.  When a person refinances, it may be possible to secure a lower interest rate and lower payments.  This could result in the homeowner having additional funds to spend each month.  These funds could be used to make improvements to the property or to cover the expensive university costs for a child. 

Of course, saving money on interest every month equals saving even more money over the course of the next few years.  Therefore, anytime a debt can be refinanced at a lower interest rate, it is a good idea to do so. 

Another possible reason for mortgage refinancing is to change a variable interest rate into a fixed one.  For example, there are mortgage loans that charge a very low interest rate.  This may seem like a great deal at first, but if the current mortgage payment happens to be less than the interest the loan accrues, the balance of the loan will consistently increase.  The result is that the homeowner is not making progress in paying off their mortgage; for the homeowner, this is kind of like running in place. Someone in this situation might want to look into mortgage refinancing with a fixed interest rate and set payments to ensure that they will one day be mortgage-free.

In order for a homeowner to get mortgage refinancing, they must first decide on a mortgage lender. Since there are numerous lenders to choose from, it is a good idea to do a little research and find the one who offers the best rate and/or loan package. There are different rules and fees associated with the many home mortgage refinance loans in the marketplace.  Anyone considering mortgage refinancing should compare the various types of loans to determine which one will prove to be most beneficial in their particular situation. And one should not forget to consider all fees and charges connected to a loan, as part of the overall loan package.  The application for mortgage refinancing is a fairly simple procedure and can be done in person or online.  Many institutions have set up online versions of their applications to make the approval process quicker and more convenient for the borrower.  The application requires general information from the homeowner such as, name, address, age, etc.  The lender will also need to know the loan amount being requested, the property value, and the estimated payoff on the current mortgage.   With this information, the lender should be able to decide if mortgage refinancing is the best option.

If the loan looks possible, the lender will do a credit check.  Good credit is the most important requirement in being approved for any loan including mortgage refinancing.  Generally, if a person already owns a home, their credit will be pretty good.  However, sometimes the reason a homeowner wants the mortgage loan refinance in the first place, is because they are having a hard time paying their bills.  Mortgage refinancing may allow them to better manage their finances.  For this reason, many lenders can justify mortgage refinancing for someone who may be viewed as having bad credit.

In today’s economy, there is a lot of movement with interest rates.  Sometimes the changes are hard to keep up with.  However, keeping an eye on mortgage rates can be very beneficial to a homeowner.  While it is not advantageous to refinance a mortgage every time interest rates drop a half a point, it is a good idea to watch for significant decreases.  Knowing if and when mortgage refinancing benefits a homeowner can save a great deal of money in the long run.  

Each individual homeowner must decide for him or herself if home mortgage refinancing is the right thing to do in their own situation. Many mortgage refinancing lenders offer a mortgage calculator on their website, so don’t be afraid to investigate your options. Interest rates are still low, but they are on their way up. If someone believes that mortgage refinancing could be beneficial to his or her financial situation, the time to move on that decision is soon. If a mortgage-refinancing loan can be beneficial to a homeowner now, the truth is that it is hard-to-say whether that benefit will still be there one year from now.

Please Consider All The Costs Of A Home Mortgage Refinance Loan

Posted by Rana & filed under Home & Mortgage Refinance Information.

When monthly expenditures get out of hand, many people turn to refinancing their mortgage as a way to free up more of their monthly income.  When considering this option, it is important that homeowners are aware of the various ways they can refinance.  It is also a good idea to bear in mind the long-term cost and current mortgage refinance rates and fees, before deciding if home loan refinancing will make financial sense.

A homeowner, who is looking for a mortgage refinance, should first find out the mortgage refinance rate that may be available to them.  They can do this in several different ways.  One way is to contact their current lender to see what home refinance rate they are currently offering.  The next option is to check rates with banks in their area and with online lenders.  Comparison-shopping is usually the most important step consumers can take to find the best mortgage refinance rates available to them.

It is possible that the homeowner’s current lender will not offer them a lower rate.  After all, this lender has already secured the borrower as a customer at the higher rate.  Providing them with a cheaper mortgage refinance rate means they will make less income on the same money.  On the other hand, a different lender has the incentive to offer a low-interest mortgage refinance rate in order to secure new business.  Competition among lenders today can lead to significant savings for borrowers.

Even with this knowledge, comparing the costs between different lenders could still intimidate the average borrower.  To help counter this problem, most lenders now have websites that can estimate the mortgage refinance rate a borrower could secure with their company.  A number of websites also have mortgage refinance calculators that will estimate the long-term and short-term costs of entering into a mortgage contract with their company.  This calculator will be based on the homeowner’s principal, interest, tax, and insurance (PITI).  In short, a PITI is a combination of all the charges included in the monthly mortgage payment.

To make the search even easier, there are also third party websites that compare mortgage rates that are being offered by a number of different lenders.  These websites can be very valuable for those borrowers who do not have the time or patience to visit a dozen lender websites. 

When making final decisions about refinancing options, it is imperative to compare the current mortgage with the estimated costs of the refinanced mortgage.  Many refinanced mortgages will offer a lower home mortgage refinance rate, but the duration of the contract will be for a longer period of time than the existing mortgage.  The lower mortgage refinance rate and lower monthly payments can be initially attractive; however, if the loan term is extended, the borrower might end up paying more for the refinanced mortgage than they would for the initial mortgage agreement.

In addition, there are usually fees associated with refinancing a home loan.  Some lenders will charge an origination fee, processing fee and closing fee, which will be added to the principal balance of the new loan.  Securing the best mortgage refinance rate may not be beneficial to a homeowner if these additional fees are excessive.

The best way to determine if the refinanced mortgage offer is better than your current mortgage is to determine the break-even point.  This is the point at which the mortgage agreement ceases to be a money-saving deal.  For example, let’s say a borrower has 6 years remaining on their current mortgage.  With the new mortgage refinance rate, their new loan term will be 10 years.  The borrower must then decide if having a lower rate for a longer amount of time is better than a higher interest rate for a shorter amount of time.  Where does the break-even point occur, or does it?

Refinancing a high interest mortgage loan may seem like a good way to manage increasing monthly debt.  In some cases, it may be very beneficial for a homeowner to do this.  However, securing the best mortgage refinance rate should not be the only determining factor.  Long-term costs or other associated fees should also be part of the equation.  As always, an informed decision may take longer to reach, but it will make more sense in the long run.

Is Mortgage Refinancing Right for You?

Posted by Rana & filed under Home & Mortgage Refinance Information.

Ever wondered if mortgage refinancing would be a beneficial step for you to take? Well, here’s an attempt to simplify the process of mortgage refinancing to help you understand whether or not it is the right choice for you.

So exactly what is Mortgage Refinancing?Mortgage refinancing in its simplest form occurs when someone takes out a second mortgage on their home to pay off the first mortgage on that same home. Mortgage refinancing, if done at the right time, can be very beneficial due to savings realized from lower mortgage rates and reduced monthly payments. Mortgage refinancing, however, is not necessarily the right solution for all individuals and households. This is because there are several choices involved in the application process that can either negatively or positively affect your overall savings. Therefore, it is crucial that you understand the process to determine whether or not mortgage refinancing is the right choice for you.

To find out whether or not mortgage refinancing will result in more profit than loss, you first need to calculate the break-even point on your new loan, using a mortgage calculator is the easiest and more effective method. The break-even point is the point in your mortgage repayment period at which you start realizing savings on your monthly loan payments. The break-even point helps determine whether or not mortgage refinancing is worth it for you. One important factor that needs to be taken into consideration is the length of time you plan to live in that particular house because it usually takes some time before savings on your refinanced loan start flowing in. The easiest way to calculate the break-even point on your new mortgage is to first compute the amount that your monthly payment decreases from your old loan to your new loan. Then you need to add up all the costs involved in the refinancing process, such as prepayment penalties and closing costs. Finally, you need to divide the total savings into the total costs to get the number of months that it will take to reach the break-even point in your refinanced loan.

Here’s a quick example: Let’s say that refinancing your mortgage causes your monthly payment to reduce from $1,500 to $1,200 and the total costs associated with refinancing add up to $6,000. You simply divide the $6,000 in costs by the $300 in savings and the answer reveals that it will take 20 months for you to begin earning savings on your refinanced mortgage. Let’s say the family in this example is planning to live at that residence for approximately 5 years. In this case, it will make sense to refinance because they will start earning savings on their monthly payments after 1 year and 8 months, or 20 months, of living at that residence. However, if the family only plans to stay at that residence for 1 year, then mortgage refinancing is not that right choice for them because they will not realize any savings in the next year.

Another key factor that needs to be examined when calculating mortgage refinance gains versus losses is the annual percentage rate, or APR interest rate, on the old mortgage compared to the APR on the new mortgage. Many people seem to think that you can get a lower monthly payment simply by refinancing to a loan with a lower interest rate. This belief is far from the truth due to the fact that there are other costs and fees involved in the refinancing process that need to be taken into consideration. APR is a better and more accurate basis of comparison to evaluate the difference between two separate mortgage loans. The APR on your refinanced mortgage takes into account other important expenses in addition to the base interest rate, such as whether you have a fixed or adjustable rate, the length of the loan period, discount points, and all other charges including, origination fees, application fees, appraisal fees, insurance costs, and so on. Using APR to compare your current mortgage to a refinanced mortgage helps accurately determine whether or not mortgage refinancing is the right choice for you. Mortgage refinancing, if done at the right time, can result in a lower interest rate on your mortgage which consequently results in a lower monthly payment. As mentioned above, although you may get a lower interest rate on your refinanced loan, it doesn’t mean that you will instantly start realizing savings. The savings are sometimes lost in the costs associated with getting a new loan and paying off an old loan before the end of its term. The break-even point and annual percentage rate (APR) are two key factors that need to be used when evaluating whether or not mortgage refinancing is a suitable option for you. The break-even point helps determine if mortgage refinancing will provide you with savings based on how long you plan to stay at that particular house, and APR helps to compare the true costs associated with your old mortgage and new mortgage refinance loan. So by now you should have a good idea whether or not mortgage refinancing will be a beneficial step for you take in terms of lowered costs.

Why and How to Avoid The Payday Loan Cycle

Posted by Rana & filed under Payday Loan & Personal Loan Information.

A person’s credit score can have a vital impact on their future in a multitude of ways.  A person with a high credit rating will find it easier to purchase a home, buy a new car, or secure a much-needed loan.  The reverse is true for those with bad credit ratings.  One of the easiest ways to maintain a good credit rating is to make sure that all creditors receive payment promptly; this includes money owed to utility companies, landlords, banks, and other lenders including payday loan lenders.

The utilization of a payday loan can be a wise financial choice for a borrower in need of unsecured funds quickly.  These personal loans, once approved, pay the borrower within one business day.  Repayment to the lender is expected on the borrower’s next payday, usually between seven and fourteen days. 

A payday loan is easier to get than other forms of credit.  Most creditors perform a credit check before approving a loan.  A person with bad credit may have a hard time qualifying for any loan, let alone a bank loan, but since no credit check is done for a payday loan, poor credit isn’t a factor.  A payday loan is meant to be a fast, cheap way to fulfill short-term financial needs.  For this reason, lenders avoid time-consuming credit checks.    

Payday cash advance loans are easy and convenient, but should only be used in select cases.  These loans should rarely be used to pay other monthly bills; doing so could easily get the borrower stuck in a detrimental payday loan cycle.  A payday loan cycle occurs when a person uses a short-term loan to pay a certain bill.  When they get their next paycheck, they have to use most of it to pay back the payday loan.  In the meantime, they now have other bills due they can’t afford to pay.  They end up taking out another payday loan to pay those bills, and so the cycle continues.  This is a very good example of “robbing Peter to pay Paul” and it simply gets the borrower in too deep to get back out on their own.

If the loan fee on a payday loan is calculated under the guise of Annual Percentage Rate (APR), the cost of these loans is very steep. But, payday loan lenders do not make their income based on an APR. Instead, they charge a small loan fee to be paid at the time of repayment that is calculated on the basis that the term of the loan will not extend beyond two weeks. This loan fee is how the payday loan lenders make the servicing of a loan profitable to them. If they calculated their loan fees based only on the current APR rate, then their profit would not be enough to make the loan action profitable to the lender.

If a borrower needs $100 for two weeks, there would be a $15 charge on this loan.  In this example, the payday loan service charge is relatively very inexpensive, which could be a very good deal for the borrower in certain situations.      

However, complications with payday loans can occur if they are not paid back on time.  Payday loans do not usually have a specific charge for a late payment fee.  Instead, a late payment will be rolled over into a new loan carrying the same $15 loan fee for two weeks.  Using the above example of a $100 loan, the borrower who pays their loan back on time will owe $15 more than they borrowed.  On the other hand, if the initial $115 is not repaid on time, the outstanding balance will continue to increase until the debt is fully repaid.  If the borrower misses three consecutive due dates, he could potentially owe the lender $160 instead of the original loan repayment cost of $115.  It is easy to see how paying this debt back late can quickly add up to a much more difficult financial situation. 

Even though payday cash advance loans are cheap and fast, they should not be taken lightly.  These loans must be used only when absolutely necessary and should always be paid back on time.  If handled properly, payday loans could even become the starting point for turning poor credit into a decent looking credit report.  

If you decide to use payday loans to help solve short-term financial problems or for rebuilding credit, please use your payday loan options wisely. If you truly need the money for only two weeks, pay day loans are a good option available to you. However, if you need that money for more than two weeks, entering into a payday loan cycle is a road to financial ruin. If you know that you will not be able to pay back your payday loan on time, don’t take out the loan. Honestly, if you need the money for more than two weeks, please understand that the payday loan was not designed for someone in your situation and it would not be wise to engage one in your situation.

Understanding the Differences Between Payday Loan Companies and Lending Practices

Posted by Rana & filed under Payday Loan & Personal Loan Information.

Over the past few years, the popularity of payday loans has increased.  Many Americans have either used these personal loans themselves or at least know someone who has.  Payday cash advance loans are low-cost, easy to qualify for, and can be done either online, by fax, or through a neighborhood lender. 

Payday loans are typically done on a short-term basis; the length of time varies per lender.  Generally, the money borrowed is due on the borrower’s next payday, which can be anywhere from a week to 14 days. 

Because payday loans are comparatively short-term, most lenders charge a loan fee instead of Annual Percentage Rate (APR).  The APR is an interest rate that signifies the yearly cost of credit.  Since a payday cash advance loan is actually designed to be repaid in full within two weeks of the loan date, charging APR on that loan would leave the loan company with a very small amount of interest. As a result, payday loan companies charge a small service fee for their loans. This service fee is usually calculated on a sliding scale, based on the amount of the actual loan.

If one was to calculate the cost of a payday loan in terms of an APR, then APR’s for payday loans are much higher than the interest rates charged on credit cards or on average loans from a bank.  However, these other forms of credit are intended for long-term use — the payday loan is not.  Since payday loans are to be repaid in such a short period of time, the fee charged on them should be viewed as an acceptable service charge.

The average lender will charge $15-20 on a two-week payday loan.  At that rate, the borrower will owe $15-20 in interest on a $100 loan.  The finance charge is determined before the borrower accepts the money, and is typically shown on the contract between the lender and the borrower.  Because the loan is short-term, the fee ends up being a low cost one, especially considering the APR cost of the loan.

Each payday loan lender operates under their own guidelines; so it is important to compare services before deciding on a lender.  Following are a few differences to consider.

One of the differences between payday loan companies is the way the lender chooses to collect their money.  Many storefront lenders require their applicants to fill out a postdated check for the amount of the loan plus the estimated interest.  The lender will then cash this check on the agreed upon date. 

Other lenders forego the use of personal checks.  Instead, they use a system where the funds are paid to the borrower through direct deposit and the repayment is collected through the same type of money transfer.  This form is often more convenient for the lender, as well as for the borrower.  There is less hassle involved, as the borrower does not have another form to fill out; additionally, the lender feels more secure in the knowledge that they will receive the repayment funds in a timely manner.    

Another difference between lenders is seen during the application process.  In most situations, a credit check is done in order to determine approval for a loan.  This can be a concern for borrowers with poor credit.  Credit checks are a way for lenders to gauge the prospective borrower’s likelihood to pay back the loan.  If the applicant has bad credit, they may not receive the loan they are seeking. 

Luckily, the majority of payday loan companies have a “no credit check” policy.  This might seem confusing or even illogical to the average consumer; however, there are a couple of reasons that payday loans operate in this manner.  The main reason credit checks aren’t done goes back to the nature of payday loans.  They are fast, usually short-term solutions to a temporary problem.  Not doing credit checks allows the borrower get their loan very quickly.

Some payday loan companies utilize a teletrack system instead of running credit checks.  This is a way for lenders to confirm the personal information listed in the borrower’s application.  It can also reveal any outstanding short-term personal loans that the borrower might have.  Using teletrack is a quick way for lenders to verify the legitimacy of a potential borrower. 

However, there are some payday loan lenders who don’t use teletrack or run credit checks.  This is the fastest and least intrusive procedure for the borrower, but the riskiest for the lender. When a lender chooses to loan money on an unverified borrower, the payday loan company may end up loaning money to someone with bad credit who will not repay the loan, and the lender will have no recourse in being paid back.

The final way in which payday lenders vary is in the way they receive information from the consumer.  If an applicant utilizes a payday loan service through the Internet or on the phone, they might send their personal information via fax.  However, many payday loan lenders now use a faxless system, meaning they only receive information by telephone or email.   Still others operate mainly on a face-to-face basis.

It is not unusual these days to be in a situation where some extra cash is needed.  In these instances, payday loans may provide a quick, convenient, cost-effective solution.  Almost anyone can qualify and applying is fast and easy.  There are a few subtle differences in each company’s procedures though.  So, take some time now to find a company who can best serve your needs. Hopefully, you will not need to use a payday service, but if you do, you will already have the right information to select the best lender to serve your immediate financial needs.

Get Approved for a Payday Loan in Minutes!

Posted by Rana & filed under Payday Loan & Personal Loan Information.

The Application Process & Requirements

Interested in learning about the payday loan application process?  There’s actually not much to it.  The requirements and procedures involved in the payday application process are very simple and clear-cut compared to others type of consumer loans.  Payday cash advance lenders generally ask a few basic questions and require a small list of conditions to be met before an applicant can be approved for a payday advance loan.  After the lender authorizes your payday application, the money is usually wired or deposited directly into your checking account on the same day or within 24 hours of approval.  Rapid delivery of cash is definitely one benefit of this type of loan.  Although payday cash advance lenders may have slightly different criteria and procedures, lenders generally ask for the same documents and steps to be taken to be approved for a quick payday loan. 

For starters, applicants need to provide lenders with documents that ascertain one’s name, current address, home phone number, and place of employment when applying for a payday loan.  Most lenders require potential borrowers to be 18 years of age or older, have had a steady job for the last 60 to 90 days, and be a resident or citizen of the United States.  Additionally, lenders usually require borrowers to have a checking account and have a monthly income within the range of $1000 to $1500.  In terms of documentation, applicants usually just need to provide a recent paycheck slip, a recent bank statement, and a federal or state issued identification card to be verified for a payday loan.  Most lenders do not require credit checks to be done during the application process; therefore having bad credit will not prevent you from being approved.  Once again, these conditions may differ slightly depending on the lender you choose to work with and the state you reside in, but lenders typically do not make the process much more complex than this.    Nowadays, payday cash advance lenders have taken convenience to another level by using online automation to allow borrowers to apply for online payday loans.  This makes the application process much easier for borrowers and your privacy is still guaranteed through high-tech encryption technology used on the payday loan website.  You can tell if your browser is secure by looking at the URL address on the application form website to make sure it begins with https:// and not http://.  Another convenience feature offered by many payday lenders is the use of no fax payday loans that do not require applicants to fax in personal documents. With no fax or faxless payday loans, lenders simply access your information on the internet to approve you for a payday loan.  This means less paperwork and less hassle for you!

Although payday loans should only be used on very rare and urgent occasions, there are a few benefits provided to return customers.  Customers that use payday loans on a regular basis are often given discounted fees on future loans, presuming that they have fulfilled all previous payments and are in good standing with the lender.  Borrowers can basically build credit with a specific lender making future application procedures much faster and future fees much lower.  Payday lenders are typically willing to give first-time borrowers a loan for about $100 to $300 at a time.  However, as a customer establishes good standing with a lender, the lender is usually willing to increase the amount of the loan. 

Payday lender fees cause payday loans to be one of the most expensive methods of borrowing.  A $100 payday loan can cost as much as $30 in lender fees, which is why we recommend looking into other sources of funding before resorting to payday loans.  Costly lender fees also make it harder for borrowers to pay off the loan at the end of the loan period.  If a borrower defaults on the loan, additional fees are added on to the overall loan amount.  This adds insult to injury causing further financial hardship for the payday loan borrower to endure.  Some lenders do allow borrowers to rollover or extend their payday loan period but this is not always the best solution as it also involves additional fees.  Payday loan rollovers should only be an option for borrowers who are certain they will have the financial resources to cover all costs at the end of the loan period. 

Surviving Unexpected Financial Problems In Today’s Credit Market

Posted by Rana & filed under General Debt & Loan Consolidation Information.

As the new millennium progresses, it seems that the cost of everything is on the rise.  As a result, more people are utilizing credit cards to pay for miscellaneous items.  Using credit cards allows borrowers to pay their debts in increments instead of trying to tackle larger purchases with cash. However, for those who only need to borrow a small amount for a short period of time, payday advance loans may provide a better solution.

Payday cash advance loans can be a cheap and fast way to solve an unexpected financial problem.  There is no application fee, and once the lender has approved the loan, the money is deposited into the borrower’s checking account that same day.  However, there may be facets of the payday loan process that average borrowers are unaware.  It is always advisable to have a clear understanding of any loan contract before agreeing to its terms.

Most payday loan companies rely solely on finance charges for their source of income. A contract from any genuine payday lender will state their charges, in total dollar amount as well as in the form of an Annual Percentage Rate (APR).

A payday loan rate is not technically of the low-interest variety; however, if the payday loan is repaid promptly, it can still be a cheap answer to a temporary monetary problem.  Instead of looking at this fee in terms of the APR, it may be helpful to see the total fee amount you will actually have to pay in dollar form.

For example, suppose a borrower needs $100 to settle an immediate financial debt.  The payday loan lender makes all loans on a bi-weekly basis; therefore, borrowers take out loans for a two-week period.  That $100 loan will be charged a loan fee for the loan’s term of 14 days.   The total cost of this two-week loan is $15.  This means that the borrower will repay the lender a total of $115.  When considered in these terms of how this immediate infusion of cash could help the borrower navigate an immediate cash shortfall, the payday loan actually offers a low-cost fee. 

Paying the loan fee on a payday loan may be preferable to paying the late charges a borrower could incur should they pay their bills late.  For example, if a consumer borrows $100 via a payday loan to pay a credit card bill, he will most likely end up paying $15 for the service.  On the other hand, should this borrower skip their monthly credit card payment, he would be charged $25 for the late payment fee and he might see his credit card’s interest rate increased.  This fee is much higher than what the borrower would have had to pay for the payday loan.  Additionally, a late payment on a credit card could have a negative impact on the borrower’s credit rating.  In this scenario, if you compare the cost of the loan to the costs of not getting the payday loan, then the payday loan is a very useful financial tool.

However, it is important to understand that the cost associated with a payday advance loan is based on a two-week loan.  This means that if the borrower is late in repayment of the debt, the loan and its attached fee will be refinanced at the current fee structure. 

Again, consider the above example of a $100 loan.  The payday loan rate charged to a borrower who repays their debt on time is $15.  However, if this amount is not paid by the maturity date, the debt will “roll over” into a new loan.  If this $100 loan were rolled over three times, the fees charged on this loan would have increased to $60.  To pay $160 for a $100 loan doesn’t make much sense. 

As a rule, it is never a good financial decision to pay any bill past its due date.  Believe it or not, many lenders have said that they make more money off of late payment fees than they do servicing the actual loans.  Payday advance loans are not the answer to every financial difficulty, but they are a fast, easy, and cheap way to help a person out of a temporary monetary shortfall.