Mastering Your Debts, Part 2

debt, loans near meThe key to mastering your debts in the New Year involves two things: paying down what you can and lowering what you pay on your debts. Together, these two things can help you get out of debt. Here’s how to make your debt go away using these two principles according to

1) Evaluate your debt. Take a look at the total amount you owe, how much you are paying in interest and fees on your debts, and how much of your paycheck goes towards your debts each month. This can be an eye-opener. Be especially vigilant about credit cards, unsecured loans, and payday cash advances – these unsecured debts have higher interest rates and may cost you more.

2) Create a budget and a plan for paying down your debt. How much can you afford to put towards your debt each month? Do the math: with that amount, how long will it take you to pay off all your loans? If the answer is “too long” you need a better plan. Come up with ways to bring in more cash (see our series about maximizing your income) and put your extra earnings towards your debt.

3) Tackle the highest interest rates first. Credit cards, payday loans, and signature loans have higher interest rates. It makes no sense to pay off your mortgage faster if you have these debts. Look at the highest interest rate you have and put all your extra cash into paying down that debt. Then move on to the next highest interest rate and so on.

4) Lower your interest rates. You don’t have to pay the full price of your debts. In many cases, you might be able to negotiate for better terms or a better rate. Read our guide on how to lower your credit card interest rates, for example. Talk to other lenders about slashing rates and fees – many lenders are willing to do this rather than risk losing you to a competitor. If this is not an option (because your credit is not perfect), consider consolidating your debts so that you pay less interest. Paying less interest means that more of your cash can go towards paying down the actual loan amount, and this can help you get out of debt much faster.

5) Remember your emergency fund. Even if you want to pay off your debts very quickly, you still need to pay yourself. Put aside money in your savings each month.

6) Avoid new debt. You knew that, though, didn’t you?

If you have a lot of debt but can afford to make some progress on it, you can likely pay off your personal loans near you and other debt. If you are having trouble making it financially from month to month, though, and are falling behind you may need more help. If you are relying on payday loans or are getting collection agency calls, you have likely missed some of the signs that your debt was getting out of control. There are still a few things you can do:

1) Focus on making more money and increasing your income so that you can invest the extra cash into your debt load.

2) Seek professional help. Your bank may have advisors who can help you set a budget and evaluate your options. There are also non-profit credit repair companies that may be able to help you. These companies can help you negotiate with lenders or can help you get a consolidation loan. Just be aware that these companies are not all the same. Some charge hefty fees and some are not as helpful as advertised. Research carefully, read all the fine print, and make sure that you understand what services you are getting. Do not sign up with a company if they will be doing things you could do for yourself.

3) Learn about bankruptcy. If you are really in debt and your ability to make money is affected by illness or some other problem, bankruptcy is a chance to start over. It can be a way to get a fresh start if you truly cannot pay your debt, but it will affect your credit score for some time, so think carefully.

4) Read our credit repair guide for more great tips.

A big debt can be scary but there is a solution for just about everyone out there. Be persistent, know your options and you, too, can get out of debt.…

Mastering Your Debts, Part 1

Mastering Your DebtsDebt is a fact of life, and believe it or not, it can be good. For many people, debt in the form of student loans paves the way for a better education and a good career. Debt allows us to own a home. Without personal loans, we would have to save up the hundreds of thousands of dollars for a home!

While debt allows us to enjoy a good lifestyle and lets us afford important things (such as medical care or a home) too much debt is a bad thing. Too much debt can leave you scrambling to pay your bills and can cost you a lot of money. It can sink your credit score and make you worry.

There are also different types of debt. Student loans and secured loans such as mortgages tend to have a high value of return (you get something valuable for these loans) and tend to have low interest rates. More worrying are credit cards, unsecured personal loans, payday loans, and other forms of lending that have high interest rates. You want to keep these loans to a minimum.…

Federal Regulator Takes Payday Loan Fraud Head On

In an effort to further protect consumers against fraudulent payday loan advance businesses, the Federal Trade Commission has started to crack down on dishonest operations.

These business are allegedly charging undisclosed and inflated fees to consumers who use their products. In addition, in certain cases some lenders have also been using illegal business practices by threatening borrowers with arrest and lawsuits if they fail or refuse to pay these unexpected fees.

FTC Cracking Down

In one specific case, the FTC brought up charges against a payday lender affiliated with a Native American tribe that felt it was immune from legal action. While this is true on a state level, the FTC operates on a federal level and was able to bring the lender up on federal charges. This is the second time in less than a year that a payday lender has been busted for trying to utilize a similar loophole.

While these lawsuits are still being pushed down the legal pipeline, the FTC has had past success in meeting fraudulent payday loan activity head on. In a separate case, the agency charged racing driver and investor Scott Tucker for allegedly charging similar inflated fees.

It’s believed that Tucker’s company illegally dipped into borrowers’ bank accounts multiple times after completing their payday transaction. Each time this occurred, not only did they take cash straight out of accounts, they also charged a new, and inflated, financing fee every time, without disclosing the true cost of the loan to borrowers. According to the FTC, the defendant would then threaten borrowers with legal action and imprisonment for failing to pay and that they would be sued. It’s believed this scheme affected more than 7,500 individuals.

Important to Review All Documents

These examples of fraudulent payday lending schemes are a prime example of why it’s important to examine all documents you are required to sign before taking out a cash loan. While a majority of payday lenders run legitimate operation intended to help you get out of a financial pinch, like any industry there are a few bad eggs. If you have read through the clauses enclosed in you payday loan request and still have some questions about the process, you can contact a loan professional at MoneyNowUSA for more information.…

True or False: Payday Loans are Reported on Your Credit Report ?

Many may wonder, while some may never have asked the question, “Will payday loans show up on my credit report?” Do you know the truth? If you look at your credit report, you’ll notice a list of your debts and payment history. A typical credit report would have your credit card accounts and car or home loans if you have them. If you borrow a payday loan, will it also show up?

The Truth About Payday Loans and Your Credit Report

The purpose of payday loans is to help consumers who are in a financial emergency and need assistance to cover an expense until their next paycheck. Most consumers who apply for payday loans use them to cover rent, high utility bills or an unexpected expense.

In general, a payday loan will not automatically show up on your credit report. As long as you use the payday loan as intended and repay it in full, it will not appear on your credit report.

However, if you fail to repay your payday loan, the lender will either turn it over to a debt collector report the bad debt to one or more of the credit bureaus. Under these circumstances, the payday loan will appear as an unpaid debt on your credit report, which will lower your credit score.

Industry reports indicate that as many as 44% of payday loans result in loan default. Consumers who fall behind on their payday loan can expect to face additional rollover fees and more interest payments.
Under Lender Discretion

For the most part, it’s up to the lender whether or not they will report the bad debt. Smaller lenders may not choose to bother because of the processing time it would take, while other larger nationwide lenders are more likely to report payday loan delinquency.

If you take out a payday loan and pay it back by the time it’s due, the lender won’t report the transaction to the credit bureaus. The reason for this is because these types of loans are not granted based solely on the borrower’s credit history. Also, there is nothing to report if the loan is paid off.…