Payday loans have become very popular in the last decade or so. When you need quick cash, a payday loan can get you the cash you need to hold you over until you get paid from work. Payday loans are very convenient. However, it is very important that you pay them back immediately on your next pay day. Otherwise they can becoame a finacial nightmare of a loan.
When you take out a payday loan there is a fee involved. Usually it is around £15 for every £100 you borrow.If a payday loan provider lend you £500, you would be expected to pay back £575 at the end of 14 days. If you are unable to pay the money back at the end of 14 days, they usually allowed you to extend the loan|If you can’t pay it back you can request an extension which will cost you another fee. Let me show you how quickly things can add up when it comes to payday loan
Now we have already said you have to pay back £575 for the £500 loan you took out. Here is example of what happens when you don’t pay on time and have to roll it over for another 14 days things can get very expensive. In order for you to push payment back another 14 days you must pay the £75 fee. But your payment for the next 14 days will still be £575 because you still have to pay the £15 for every hundred you borrowed.
So now you have £150 in fees that you must pay. If you let the loan roll over 3 or 4 times you could end up paying close to £1000 back for a loan that should have originally only cost you £575.This is one good reason whyyou have to be very careful when you take out payday loans. They should only be used if you know you are going to be in a position to pay them back short term.
Otherwise you could end up in a worse situation than what you are already in. So make sure you are 100% sure you can pay back the entire loan onmonth end. You should also not make taking out this type of loan a habit.Over the long term they can cause you one big head ache.
However, if you do find it necessary to take out a payday loan, make sure you do your research. Fees will be high but if you shop around a little you might be able to find a little lower rate. Also make sure you watch out for scams. There are a lot of payday loan companies online. Try searching for payday loan in manchester or payday loan in London or payday loan in boston depending on your location to find your nearest one.
As the bank of England base rate remained unchanged again since hitting .5% in March of 2009, more and more people are baffled why the rates for all types of loans and finance have in fact been higher over the last couple of years than they have been for quite some time. There are a number of reasons for this, and the following article will hopefully give you an insight into what they are.
Too few lenders
As a result of the credit crunch and the problems caused by lump sum Payment Protection Insurance (PPI), there are now reduced numbers of lenders available. The mis-selling of PPI has caused an enormous problem for the UK loan industry, as a high percentage of of lenders were let’s say too vigorous in their zest for selling this insurance cover. They did not explain the product they were selling and in most cases led the applicant to believe that the PPI was required. Also for the homeowner loans industry most lenders sold their PPI insurance as a lump sum payment that covered the applicant for the first 5 years of their loan. Because this premium was usually added to the amount borrowed and therefore the applicant was paying interest on the premium for the duration of the loan (up to 25 years). The government made changes to the law concerning the sale of payment protection insurance which left the lenders exposed to court action, not just on new sales of this insurance but also on previous sales. This opened the flood gates and in a majority of cases the lenders were being forced to repay the premium and any interest that had been incurred on the premium. As a result of this a great many lenders were forced into liquidation.
Uncertain economy
As a result of the state of the economy the few loan companies that are still in business are worried that they will not get their money back. This uncertainty has prompted them to change tack and re-evaluate their lending policy and also their their rate cards in order to negate their exposure. This double edged philosophy reduced the numbers of people they will lend to, and the ones that they do lend to are being forced to pay more expensive rates.
Will we see low rate loans return to the market?
It is at last looking like the tide has turned, with some new players preparing to enter into the market, and the new low rate already available from “Link Loans”. As more lenders get involved in fighting for your business that is likely to do a couple of things, according to where the new loan companies want to position themselves. Firstly it could possibly result in a rate war where the main benefactors will be the applicants as they see more competitive rates. Another likelihood is that the loan companies may have to become more flexible with their criteria, in order to get hold of their share of new business. This will help to make it easier for those of us that have experienced financial problems in the past to secure the loans with bad credit we need to help get our finances back on track.
Businesses are often looking for a loan. Be it the working capital, purchase of equipment, inventory expansion, renovations or perhaps an acquisition, a business will require funding to finance the project. Bank loans are helpful but not easy to obtain. Small businesses in particular have a hard time getting approved for bank loans because of the tough criteria and extended timelines. The downturn has also created a credit crunch that has worsened the situation further.
Some of the available small business loans are lines of credit, term loans, equipment leasing, secured or unsecured working capital loans, franchise startup loans and SBA loans. All these loans need comprehensive documentation including review of credit history, income projections, collateral as security, a good management and a great growth plan. In spite of doing all their homework, businesses may have to approach many banks before they obtain a loan since the approval rates are not very bright.
There is one other funding choice that could perhaps be appropriate for your business if you hate the documentation and the time it requires to find a conventional loan or if you just cannot wait around for weeks to get it approved. It is called business cash advance or merchant cash advance (MCA). It is a much more attractive option for small businesses with immediate financing needs. Many private companies, banks, and credit card processing companies offer such financing. The interest rate on an MCA is higher than a bank loan, but the difference has shrunk in the past few years. The documentation required is quite minimal, and credit score… well, if it’s good, great. If not then it will not ruin your odds of obtaining an advance though it may influence the amount of cash advance sanctioned. The approval cycle is quite short – from a few hours to only 3 days. And best is that the cash gets transferred into your business account in just a less than a week. That’s just what makes MCA so popular – funding is available when needed the most.
The one necessary requirement for the approval of an MCA application is a history of decent amount of credit card sales over the past nine months (minimum average of $3000-$5000) and at least one year of having been in business. The MCA or merchant capital provider buys a percentage of your future credit card sales receipts for the advanced amount. The repayment is handled at the credit card processor’s end without requiring involvement of the business or the cash advance provider. This relieves the business of having to keep track of payment dates or the payments. Another great trait of an MCA is that the monthly payment varies based on monthly credit card sales and is fixed as a percentage of the same. Business owner is relieved of the pressure of sending in a predetermined monthly payment since it can vary based on monthly sales.
Since merchant cash advance is a purchase of future revenue, its providers are not regulated under financial loan laws. No rules or regulations even govern the amount of interest MCA lenders can charge a business. It is a good idea to work only with reputed providers to steer clear of rip offs. Peruse the contract with care to make certain that there are no hidden costs or confusing terms and conditions.
The merchant cash advance industry is slowly maturing and many larger players are making efforts to regulate it to some degree. As a result, MCA is quickly becoming a mainstream source of finance for businesses of all sizes.
October 26, 2010 admin
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Shares of Regions Financial Corp. tumbled on Tuesday after the bank posted a wider-than-expected loss on sales of troubled real estate assets and an increase in charge-offs of bad loans.
Shares of the Birmingham-based regional bank fell 57 cents, or about 8.1 percent, to $6.46 in morning trading.
For the July-September period, Regions Financial reported a loss of $209 million, or 17 cents per share, narrower than the loss of $437 million, or 37 cents per share, in the same quarter a year ago.
For the latest quarter, analysts surveyed by Thomson Reuters had forecast a loss of 9 cents per share, on average.
Regions Financial has been hit hard by the real estate market slump across its 16-state region, covering the South, the Midwest and Texas. President and CEO Grayson Hall said economic recovery in most of the bank’s markets “remains slow and uneven.”
Regions Financial sold about $350 million of troubled properties in a bulk sale during the quarter, resulting in $108 million in charge-offs of loans written off as not being repaid. The sale also led to $30 million in losses record as non-interest expenses.
Including the bulk sale, Regions sold or transferred to “held for sale” status about $1 billion in assets during the quarter.
Those moves helped trigger the quarter’s $759 million in total net charge-offs, of 3.52 percent of average loans. That was up from a charge-off rate of 2.86 percent in last year’s third quarter.
However, the bank’s provision for loan losses fell 28 percent to $760 million from more than $1 billion in last year’s third quarter.
Net interest income — the difference between what a bank makes from lending money and how much it costs to borrow money — rose nearly 3 percent to $868 million from $845 million.
Non-interest income, derived from fees and other charges, slipped nearly 3 percent to $750 million from $772 million.
