Generally speaking payday loans are the ugly side of loaning business. But they are in some cases smart solutions for small budget issues. But throughout recent history, and in preset day there exists an ugly side of those payday loans, and majority of people know that side as lending sharks or loan sharks. In this article I will try to remind everyone about the existence of those loan sharks as well as some of their roots.
Loan sharks are people who offer payday loans that have huge interest rates which are illegal. Loan sharks are also known to use blackmail or threats of violence and sometimes even violence in order to enforce repayment from those people that refuse to repay that money or are far behind repayment date.
Origins of money sharks can be found in 1920s salary buying, juice operation in late 1940s and early 1950-ies and 1960s heyday which lasts until present time in some cases. These are all roots found in mafia of that time, but there are non-mafia related roots that are still present, but about them we will discuss later.
History of Payday Loans
Payday loans existed even before 1920s but strict law was created to ensure the extinction of this kind of business. But people found a way, and it was names salary buying. As they explained they were not giving loans, but buying wages for the future. And loan sharks prospered due to holes in the law, but that came to an end with a new law in late 1930 which closed those holes. This stopped more extreme loan sharks, but those that were ready to easy on the interest rate still managed to maintain business.
Between 1930s and 1950s payday lending became a thing of the underworld. Only mobs that were organized enough kept this business going. And they didn’t have large clientele. At the beginning only office clerks and factory workers were served by these groups, but later married men were also introduced to the business. Main reason for aiming at married men is due to the fact that they were more reliable clientele than other people, they could be coerced into paying their loans back.
Changes from 1960s
1960s brought change into payday lending business of these mobs. They moved away from factory workers and other similar clients and refocused their business on small and medium businesses. These businesses had assets that could be seized and sold in case of debtors who were unwilling to pay their loans or they didn’t have enough cash to repay them. At its peak, payday lending was second most profitable illegal business, just after illegal gambling. Media attacked these mobsters with stories of beaten or killed customers, but in reality the number of those cases was really small, compared to number of customers that were regular in paying their debts.
Areas where mob presence was low was populated by lenders that operated by themselves, without any connections to mafia. They were more inclined to violence in order to get their money and interest back.
P repayment of the loan means to repay the entire loan before the scheduled date for repayment. If, during the loan repayment, you reach a certain sums of money with which you can dispose of, and you do not plan to deposit or invest the same for any other purpose. To free yourself of debt you can prematurely repay part or all of the amount owed on the loan. The conditions for this already depend on the specific product and business policy of the bank. In this way, it can also save you having in mind that such payments reduce debt, shorten the payback period, which significantly affect the total amount of debts owed to the bank.
When early repayment must count on the additional cost imposed on banks in such cases and which amounts to 5 percent of the principal amount of the refund. Fees charged for this kind of loan repayment are applied in case of a total or partial repayment of debt. Of course, if the debt is repaid from own funds or refinancing by the bank where the credit was taken. The fee is usually higher in cases where the loan is refinanced by means of other banks.
In the contract that a customer concludes with the bank is precisely stated that the borrower can repay early to take a loan. This ability provides for long-term loans. Some banks also specify that the above can be applied only after a certain period. Usually that period takes to 5 years. Certainly it should be emphasized that it is always possible and deal with the bank in order to make best serviced the debt. Because it is in the interest of banks to avoid the problem about paying the debts of their clients.
Reduction of Debt
One of the most important factors that affect the total amount of debt in addition to the interest rate and repayment period on the basis of which it can be concluded that shortening the repayment period reduces the amount of debt, and thus can save a certain amount.
It is highly recommended because can shorten the repayment period or reduce the amount of monthly loan installments to repay. The above mentioned shall give particular attention in case of using long-term loans for which most of the debt in the later period of repayment does just the interest.
What Affects the Change of Interest Rates?
A change in interest rates affects primarily change of course, the reference of interest rate, consumer price index, inflation and the country’s credit rating. Based on the above, especially in the case of using loans with variable interest rates, it is essential to choose the right moment for repayment of all or a large part of the debt.
Based on comments from banks and their previous experience, it can be concluded that a relatively small number of loans are repaid prematurely. The reason for this can be a disadvantage in the form of compensation for early repayment of the loan or that people who borrow in this way generally have at their disposal a large sum of money to resolve existing debt.
Being a bankrupt is not something one would dream about as a child however sometimes it really is the only way out of a debt hole. However, before you reach for the ultimate solution to your indebtedness there are a few things you need to look at first:
1) The IVA 2) Debt Forgiveness 3) Debt Restructuring
These three options can really help you eliminate your debt without filing for bankruptcy.
I think we’ve done a pretty good job of explaining what guarantor loans are so now it makes sense to talk about a few guarantor loans lenders. One the best exponents of guarantor loans are FLM Quick Loans. They have fused guarantor loans with payday loans enabling them to charge a much lower amount of interest than the normal payday lenders. Of course this is achieved through adding a guarantor into the loan agreement and reducing the risk to the lender.
FLM Quick Loans Requirements
The requirements are actually slightly more relaxed than most guarantor loans but basically you must be over 18 and
You must be 18 years of age
You must be a UK resident
You cannot be currently bankrupt or on an IVA
You must have a valid debit or credit card
You must have a valid email address and mobile phone number
You must able to provide a suitable guarantor
The guarantor does NOT need to be a homeowner but they do need to earn over £800 per month, and have fair credit.
The big thing about FLM Quick loans is this:
Borrow £100 for 31 days:
– Total Charge for Credit is £9.74 – Total Amount Repayable is £109.74 – Interest Rate is 0.314% per day – Representative APR is 199%
No payday lender comes anywhere near this cost. With them you are looking at an APR between 1000% and 3000%. They are just no competition which is why FLM Quick Loans have been growing at an incredible pace over the last year.
Now piece of information about a guarantor loan lender would be complete without talking about the charges you may have to suffer should you miss payments as so on. The good news is it’s pretty simple to understand what happens:
There is no early settlement fee from FLM Quick Loans, which means you really do only pay the interest on what you have borrowed for that period in time.
And here are the basic fees for late payment: 3 days late on your payment – £20.00 4 days late on your payment – £7.00 11 days late on your payment – £7.00 40 days late on your payment – £20.00
Guarantor loans lenders
There are only a few guarantor loans lenders in the UK and by and large they a very similar set of requirements but please only use this list as a guide rather than the definite list for specific companies.
Borrower must be over 18. Borrower must not be on an IVA or a bankrupt. Borrower must have a bank account with a debit card facility. Guarantor must be over 18. Guarantor must have good credit rating and not be on an IVA or bankrupt. Some guarantor loans will require the guarantor is employed and a home owner.
Most if not all loans come with some form of credit check. What matters to you if you have a less than perfect credit score is what the information from the credit check is actually used for. In the case of guarantor loans and payday guarantor loans credit checks are made, however for the borrower they are only made to check if they have been registered on an IVA or have been registered bankrupt.
If you do not wish to be credit checked the chances are you will not be able to get a loan outside of possibly a doorstep loan. If you do want a guarantor loan which would be cheaper then talk to the guarantor loan company about their credit check procedure and what data they use it for, perhaps they can set your mind at ease.
Making purchases with credit cards can provide you with an added layer of monetary protection. For instance, some credit cards will offer you an extended warranty when you purchase the entire amount of the item with their respective plastic. The type of extension on the warranty will vary from issuer to issuer, but some will double the length of the warranty that accompanies the product under discussion.
Key to the extended credit card warranty is in filling out the warranty registration card that comes with the product you purchase. So, if your product breaks outside of the standard warranty period, which may very well happen, then the credit card issuer will provide you with a credit to your account for the full purchase price of the good. That is quite a bonus to using a credit card. It is very important to read the literature that you card comes with to determine exactly how your particular card handles the warranty extension. Areas to keep a close eye on include, what documentation of the warranty is required, what percentage of the purchase price needs to be funded by credit, and are there any types of purchases that are explicitly excluded from the extended warranty.
This extended warranty is obviously great for items that seem to break just after the manufacturer warranty has expired. Some items that come to mind are digital cameras whose buttons fall off, printer that mysteriously have drying ink problems, and maybe evening washing machines that fall victim to loose change. Don’t forget the most used item in your life: the laptop. Think about how many items in your life have been rendered useless in just the year after you purchased them.
In addition to warranty extensions, credit cards can also come to the rescue if your purchased item is stolen or broken. These coverages are usually implicit benefits upon a credit card company issuing you their card. Some of the major credit card companies that offer these benefits are Visa, American Express, and Mastercard. As with extended warranties, there are time restrictions on coverage, but as mentioned above, most problems occur within the first few days and weeks of purchasing a new item.
For the fickle consumer, purchases made with a credit card offer yet another added benefit. Say you buy something and a month later you think why did I buy this thing or the product just doesn’t work the way you had hoped. Well, with some credit card companies you can kill buyer’s remorse with their advantageous consumer satisfaction coverages. Trying to return an item to a retailer because it simply didn’t meet your expectations.
However, this shouldn’t be a problem if your credit card company offers an avenue for you to credit your account if you simply don’t like what you bought. Yes, these options do exist , you just need to check out some of the larger card issuers to find them. Credit cards can be good if you just know how to use some of their benefits.
There are plenty of credit cards for college students to choose from. If you are a parent and your son or daughter is off to college, there are several tips that you can follow in order to find the best student credit cards in 2016 for him or her. Just make sure you explain all the necessary things to him/her in order to prevent possible misunderstandings.
1.Lookfor credit cards that offer reasonably low limits.
The first thing is to look for the most appropriate card – the best kind of student credit card that you can give to your child in 2016 is one that has low limits. Giving him or her a card with a high limit is a huge mistake—your son or daughter could max out on the card easily. Explain to him how he should properly use the credit card. Set a rule that it should only be used for important things such as school supplies, groceries, or emergencies. Explain why they should not buy games for Playstation or PC, so they understand the essence of the card.
2. Look for Credit Cards That Have Low Interest Rates
Another tip for finding the best student credit cards for 2013 is to look for those that have low interest. Most cards designed for student use offer zero percent APR for the first 6 months. This is a great promotion, so make sure that you inform your teenager to purchase all of the important things that he or she needs for school during this period.
3. Look for Credit Cards That Offer a Rewards Program
Almost all credit card companies offer some sort of rewards program. Since these programs vary, the key is to look for one that your son or your daughter will be able to benefit from such as point based programs that can later be turned into gift checks or certificates. The greater and the more useful the rewards will be, the better for him or her.
4. Look for Credit Cards That Offer an Online Option for Account Management
Another useful tip for finding the best student credit card for 2016 is to look for providers that offer an online option for account management. This is ideal for students who do not have the time to visit the bank just to keep abreast of their transactions. Online banking will also be a lot more convenient, especially if your son or daughter has a very busy schedule at school.
5. Look for Credit Cards That Have a Policy for Lost or Stolen Cards
Last, but not the least, look for those that implement a policy for lost or stolen cards. This policy is very important and useful, as it will protect your college son or daughter in the event that he or she will lose his or her wallet. Make sure that you go through the entire policy of the credit card company in order to determine whether or not the provider is implementing this kind of policy.
Sometimes situations arise in which you need to borrow money, and fast. Short term loans provide an easy way for you to get what you want, at desirable rates. These expenses may occur so suddenly that you may not have time to gather enough finances in order to meet your monetary needs. However, once you are able to obtain short term loans, it becomes even more important that you ensure the means for their repayment.
Repay Now or Leave for Later
Short term loans are a great way to ensure that you receive the required money immediately. However, the absence of collateral may result in higher interest rates being charged on such loans. No matter, what the nature of your business may be, it is always wise to pay off loans as quickly as possible. The same is the case for short term loans.
It is better to pay them off sooner rather than later as you will have to pay interest the longer you are indebted. It is better not to put too much stress on your finances when the need for immediate cash comes up. Therefore, it is better to always have a contingency plan. The question then arises, how should you settle short term loans quickly, and without putting extra strain on your finances?
Repaying Short Term Loans
Short term loans can be taken for different time periods, ranging from 3 months to 12 months. However, it is better to pay them off within 6 months, if possible. If you overextend your loan, you will have to pay extra fees. It is best to avoid falling into this vicious and never ending trap. Why do we say that? Well, you don’t want to end up paying more than the amount you actually borrowed, do you?
When you have the chance to settle the loan earlier, then it is better to do it. Do not procrastinate and leave it for later, otherwise it will become an overbearing burden. You can always ask your loan provider to lower the interest rates so that you can make the repayments with ease.
Sometimes it is better to make extra payments, just so you can settle the loan earlier. The reason this is done is so that when you have the cash, you put it to use. Remember that you are settling the loan early so that you do not have to pay extra on your loan.
Short term loans give you an added advantage of obtaining the money you require at a moment’s notice. However, it is very important that you ensure you have a backup plan for repaying the money you borrow. While they are very easy to obtain and even easier to repay, they can, at times, become burdensome because of their high interest rates. So make sure to repay them quickly, and settle them off. This way you handle the matter efficiently, and improve your credit score record as well.