Everywhere you look these days there seems to be yet another cautionary tale about the use of payday loans, with many experts warning that using this kind of finance is highly damaging to our financial wellbeing, in the main because of the extremely high interest rates payable, as well as the charges that apply in the event you are unable to repay your loan on time.
Getting a payday loan is so simple – all you need to do is logon on to any search engine type, in “payday loans” and you will have what appears to be an limitless choice available. And with the promise of funds being in your account in a matter of minutes it’s easy to see why they are so tempting to so many.
But does this ease of application and the high interest rates make payday loans dangerous?
To a great extent this depends on the reasons you are applying for a payday loan in the first place and, of course, your personal cicumstances. Payday lenders will argue that if you are in full time employment and simply need the loan for a short time – a maximum of 30 days – then payday loans are a useful aid to budgeting. However, the problem is that many people are ending up deferring repayment of their loans to a later date, meaning that they are no longer the short term financial solution they were intended to be. Over a more lengthy period, interest and charges on payday loans are punitive and are causing widespread distress.
It is essential then that if you are considering using a payday loan, you make every effort to pay it back on time. Used that way they can help smooth out the highs and lows in your income and expenditure over the month. Used as a long term loan, they are potentially ruinous.
If you feel you may not be able to pay the loan back quickly, then you really should discount payday loans as a potential source of finance. There are other options out there, including trying to arrange an overdraft or using your credit card if you have one. Both credit cards and overdrafts come with high interest rates attached to them, but in neither case is the interest rate anywhere near that payable on a payday loan.
And if nether of these options are available to you, you could consider approaching your local credit union for assistance or even pawning some of your valuables. Pledges in a pawnshop usually need to be redeemed within 6 months, so that gives you a lot more time to get your finances back on track compared with a payday facility. Again, you will need to pay interest on any amount borrowed from a pawnbroker, but not at the rates charged by payday lenders.
In the modern world it is virtually impossible to get by without access to credit at some point or another. Bills have that nasty habit of becoming due at the most inconvenient of times, usually just a week or two before your pay check is due, leaving you needing to rely on some form of additional finance to get by.
Of all types of credit probably the most common and easiest to use is the credit card. However easy they are to use, you need to manage your spending on them or else you could soon find yourself in difficulties.
Credit card fraud is also an increasungly common problem and it is essential that you protect yourself against the activities of fraudsters who may have designs on your card. Here are a few suggestions on how to enjoy using your cards in the most painless fashion:
It’s essential to make regular payments on time, because if you miss a payment or are late making one, this may show up as an adverse mark in your credit report. The best way to ensure payments are made as and when they are due is to set up an automatic payment. You can schedule this to pay off the minimum amount, or else you can have it pay off a set amount each month. And if you want to avoid paying interet altogether, you could even set it up to pay off the balance in full each month, assuming you anticipate having the funds to do this.
Another consideration when using credit cards is privacy and security. If you are paying for an item in a shop, or a meal in a restaurant, make sure your card does not leave your sight. Insist on the transaction being processed in front of you, failing which you may find yourself failing prey to the actions of identity thieves or even having your card cloned. Likewise, when using your card to buy items online, enrol in a third party secrirty service,such as Verifired By Via for added comfort and on no account use your card to buy anthing when you are using a publically accessible computer.
If you experience any short term cash difficulties it makes sense to contact your credit card company, rather than risk missing a payment and having that recorded on your credit file. In many cases, it should be possible to agree a reduced payment, albeit on a temporary basis, until things improve.
By taking heed of the above suggestions you should be able to continue using your credit card in the fashion in which it was intended to be used – namely as a helpful and inexpensive budgeting tool.
Some people imagine that having a property portfolio and operating as a commercial landlord is an easy way of making a living, but in truth there are so many tasks which demand your attention that it can be quite easy to get bogged down in the minutiae, with the result that you overlook the things that are really important. And when things get overlooked when it comes to property, it can end up being very costly.
So, to make sure you don’t fall into this trap here are a few tips to ensure you keep your portfolio in tip-top condition without it costing you the earth and damaging your business into the bargain
Keep on top of pests
Pests such as rodents and insect infestations can have a dramatic effect on the desirablity of your property, so it is worthwhile from time to time having your flats or homes inspected by a qualified expert who can recommend the appropriate course of action to ensure your property remains pristine
It better to take preventative measures in this way to make sure you are always in a position to let your properties out, rather than find that a tenant or tenants quit because of poor maintenance.
Take advantage of technology
Do you have a tendency to do things the old fashioned way? Perhaps you like to keep handwritten notes on your portfolio. If so, you are really missing a trick. Property management software can free up so much of your time by simplifying routine tasks, which in turn means you will have more time to concentrate on developing and improving your business.
Repair any damage promptly
Keeping on top of the upkeep of your property is a vital part of good property management. Apart from regular inspections for pest infestation as mentioned above, you or your agent (more on this below!) should also carry out periodic inspections to check for any structural damage such as rain water ingress etc. By being proactive you not only stop any damage before it has had the chance to get too bad – and more expensive – but you also demonstrate to your tenants that you take your obligations as a landlords seriously. Tenants like to think they are being treated fairly and well, and if they have this impression they are more likely to extend their contract, giving you that sought-after long term commitment.
Consider appointing a management agent
This may not be something you consider strictly necessary if you only have small portfolio, but even then it can be an advantage. It puts a third party between you and your tenants which can often be a useful thing when negotiations are ongoing. Also, a professional property manager should know what is required for the smooth management of your portfolio, no matter the size. It’s all about freeing up more of your valuable time, which you can then use in the most productive manner to grow your property empire! So, rather than looking at a property manager as an expense, perhaps it’s better to regard the appointment of a manager as an investment in the future of your firm.
One of the worst places you can be is deep in debt . Collectors constantly knocking at your door, nasty letters in your mailbox, the sleepless nights, and the constant worry, all add to your general stress levels.
It doesn’t have to be this way though . The key to solving your debt problems is to be determined and to show a degree of self discipline
Below are some tips that you can use to get out of debt with the least resistance possible .
Get what you are owed
Getting hold of a lump sum would probably make a pretty big difference to the way you feel about things, wouldn’t it? Wouldn’t it be great if you could give your finances a bit of a boost with a nice lump sum of a few hundred or even thousand pounds or dollars? And, if you put your mind to it, it might not be all that difficult .
One example could be to see if you can refinance your car loan which would leave you with a nice little lump sum towards your outstanding indebtedness .
Assess Your Finances Honestly
Go through your monthly budget and make a list of all your expenses . The next part is the hard part because then you need to get down to the task of cutting out anything you don’t really need
It’s surprising to see what you save by such a simple exercise and any sums that you can cut from your monthly outgoings means they can be put by to help pay down your debt balance.
Get a consolidation loan
Consolidating your debts is a very good idea if you owe money to multiple lenders . The advantages are twofold: your monthly outgoings will be reduced and you will only have to deal with one creditor, meaning its less likely that you will miss a payment with all that entails for your credit report
The best place to find a consolidation loan is online. Just spend a little time doing your due diligence on the various alternatives that are available Then, contact them one by one and explain your situation . Doing things this way you will almost certainly have an affordable loan within a day or two .
Don’t take on any new debt
The next step may seem pretty obvious – avoid any new forms of debt The worst thing you can do is to start taking on new debt, because if you do, then your situation is never going to improve.
Resist the urge to use credit cards by cutting them up and chucking them in the trash .
One of the many well-publicised effects of the credit crisis that followed the collapse of Lehman Brothers in 2008 has been the increased difficulty in obtaining mortgage finance. The days of 100 per cent mortgages are well and truly over, and banks and building societies have generally tightened their criteria for lending quite considerably, meaning that many potential first time buyers are unable to get on to the housing ladder in the first place. The lack of first time buyers has also affected so-called “second-steppers”, people who already own their own home but are looking to move to a larger property as their financial or family circumstances change.
The net result of all this uncertainty in the housing and mortgage markets has meant that many more people than before are choosing to rent property, rather than buying. The perceived wisdom in the UK at least is that it’s better to buy property than to rent, but this may slowly be changing. People are beginning to realise that renting can offer a greater degree of flexibility, as well as other benefits, such as not having to pay for property repairs and maintenance, or for other expenses such as stamp duty, payable when you buy property over £125,000.00 in value.
With the increase in the number of people looking to rent, one investment opportunity which has also seen steadily improving returns is the buy-to-let sector. The trend towards renting seems set to continue, meaning that for those investors with capital available or who are able to secure funding, buy to let offers decent income yields with the prospect of capital growth over the longer term.
If you are a potential investor thinking of entering this market, you should ensure you take appropriate advice to get the best mortgage for buy to let available. Rates can differ quite dramatically and can have a significant effect on the level of return you can expect to achieve. If in doubt it’s worth seeking the advice of a financial adviser, or other suitably qualified professional, preferably one who is experienced in this field.
There is no doubt that payday loans, instant cash advances or quick loans – call them what you will – are a controversial subject in the eyes of many people. While there are some who regard them as a legitimate tool in planing your monthly finances, many more feel they are the unacceptable face of financial services, largely due to the extremely high interest rates charged by payday lenders, not to mention the severe penalties and charges which apply if the borrower cannot pay the loan back on time.
The truth probably lies somewhere between these two extremes. Pay day loans may have their place, but with any financial decision, whether it’s taking on a car loan, a credit card or asking for an overdraft, you need to know the facts at the outset so that you can make a truly informed decision before you enter into any binding deal.
Lots of people like the simplicity and speed of application of payday loans, especially when you think how they compare with the somewhat outdated procedure of making an appointment with your bank manager – often days or even weeks in advance – at which you need to complete a lengthy application form, then wait even longer before you find out if your application has been accepted.
Compare this with pay day loans which are now almost exclusively dealt with online and where you can expect not only to get a decision in a few hours, but if accepted, to have the funds available for use within the same short time frame. And then there are no restrictions on what you can use the money for unlike more traditional borrowings.
The big negative with these loans is the interest chargeable, often running in excess of 1500% per annum. Interest rates at that level are unsustainable if you are borrowing in the long term, but if you use payday loans in the way they are intended – to cover a short term cash shortfall – then the amount of interest actually payable is much less punitive. Critics of these loans argue that in many instances borrowers are not able to pay them back timeously, meaning they are saddled with damagingly high rates of interest long-term, which can lead to real financial hardship. Critics also argue that the whole payday loans marketplace is insufficienly regulated – though this is likely to be strengthened in early course – especially, when you compare the levels of regulaion with the mainstream banking industry. Having said that, no amount of regulation will help if those who operate the system are basically not to be trusted,as we have seen with the PPI scandal, not to mention the allegedly fraudulent activitoes of some bankers in the LIBOR rate-fixing debacle.
At the end of the day, if you are financially disciplined and use pay day loans or quick cash advances simply as a stop-gap, then they may well be worth considering. If you use them simply because they are the only place you can quickly access the cash you need, then you are probably looking at them in the wrong way.