Bad Debt and Payday Loans

bad debt

If you have had some bad debt problems in the past, which you are now successfully dealing with, you may be working within a fairly tight budget.

If you do not have much scope to cater for the unexpected, payday loans may help you to make it through to payday if you should encounter a financial emergency.

Keeping to a strict budget is not easy at the best of times and even the best financial plans can be derailed by a larger than expected bill or your car or washing machine breaking down. This may be particularly true in the days running up to payday.

The trouble is that if you have had debt problems in the past, you may find that traditional lenders will be wary of advancing even small sums of money.

So you may have problems getting them to agree to a small loan or even a short-term overdraft.

Payday loans may offer a lifeline in these circumstances.

This video explains it further:

This type of lending typically involves relatively small amounts of cash with sums of between £100 and £250 being fairly typical. The money is lent for short periods of a number of days or weeks.

In overall lending terms, these small amounts and short time periods may present less risk to providers, so they may be prepared to lend to you even if you have had debt problems in the past.

To apply for payday loans:

  • you need to be employed with a regular income;
  • you have to be over 18 and a UK resident – though you typically do not have to be a homeowner to benefit from this type of lending;
  • some payday loan providers operate online, so having a bank account into which they can transfer the loan is necessary, as is a direct deposit on that account to allow the repayment to happen;

Once you apply, a credit check may be carried out. Not all applications may be accepted, as some debt situations may be just too risky.

If your application is accepted though, you may find that your loan can be transferred to your account in as little as a couple of hours, provided your bank can accept these types of funds transfers.

You can then deal with your cash flow situation.

When your payday arrives, a debit transaction on your account repays the loan together with the agreed interest and charges.

When used responsibly, payday loans can provide just enough money to help you deal with your financial emergencies, without offering opportunities for slipping into long-term debt.…

How To Get A Fast Emergency Loan If You Have Bad Credit

emergency loans bad credit

Have you got really bad credit? Loans, I am sure you have found, are very hard to come by. However, if you are a working American, you should be eligible to get bad credit emergency loans.

The actuality is that even if you are reconstructing your credit it should take an especially long time before any bank or credit union would consider lending you a cent.

Ever tossed and turned and felt fear grip your belly in a vise due to what might occur if you actually required money quickly but could not come up with it? If you need money before payday, then bad credit payday loans might be the only way to get your required funds to get you back on your feet again. These loans occasionally go by the name of cash advances. Others refer to them as payday loans or emergency loans.

The bottom line is if you meet some minimum qualifications you’ll be able to borrow up to $500 and there’ll be no credit check in some cases.

You can get multiple quotes and find legitimate bad credit emergency loan lenders in your state by checking out the following link.

Payday loan companies are in the business of giving emergency loans to people with poor credit. To get your request approved you would have to make an income, be over eighteen years of age, be a citizen of the country you are applying in, and have a banking account.

Neither your credit score nor the reason why you need to borrow the money matters. It does not matter if you are past due on your bills or if you have filed for bankruptcy – you’ll still likely be in a position to get your loan.

But, as I discussed before, there’s a price to pay. And the disadvantage is that the rate is pretty high. Cash advance corporations regularly charge 10-30 percent interest.

To explain, if you borrow $100 at 20% interest you will have to repay $120 from your next paycheck. If you find you can’t pay it back all, many payday banks will enable you to increase your loan for another payday or two.

And charge you more interest. It can get to be an especially hard situation to get out of.

That is the reason why most people only get emergency loans when they feel they don’t have any other choices and some emergency has come up that they should deal with.

It’s good to understand these loans are available if you want one. To be truly prepared, though, many folks in this money situation take a little time to investigate the interest rates at a number of companies before they need the money.

This way they will be ready to find the lowest rates for when they would need it.…

5 Tips for Resubmitting a Rejected Mortgage Application

rejected mortgage application

Buying a home can be one of the most emotionally exhausting purchases one will ever make in their lifetime. Home buying is a process that begins with the look, which then quickly moves to the romantic imagining of oneself in this home.

You imagine what color you’d paint the walls, you’d imagine how you’d outfit your garden; so the fact that the longer part of the home buying process, the bidding on a home and application for a mortgage can be time-consuming, clerical, and unromantic is the yin to the home buyers yang.

In truth you shouldn’t even look for a home until you are pre-qualified for a mortgage; it will save on the heartache later down the road if you are denied.

Here are five tips of things to do to be successful eventually, when you are, at first, rejected for a mortgage application.

1. Look at Your Home Price

Maybe one of the first things you should do when you’re rejected for a mortgage application is looking at the home you’re trying to buy.

If you’re making nine dollars an hour working part-time at Victoria’s Secret and your husband’s a student; you’re probably not going to get the best house, in the best neighborhood, on your pittance of income alone.

Consider looking elsewhere for a home in an up-and-coming, less expensive neighborhood.

2. Look at Your Credit Score

This is a no-brainer, but if you’re looking at a rejected mortgage application, maybe you need to look again at your credit score.

If there are glaring errors or other factual inaccuracies on your credit score, clean those up, get verification that they’ve been eliminated, and get back on the case of the mortgage company.

3. Look at Your Income

Again, if you’re talking about a home that is going to make you all but bankrupt just to keep up with the mortgage payments, then you might want to reimagine your home buying experience.

The general rule is that your mortgage should never account for more than 25% of your total income; that’s the money you’re taking in every week. So if you make $37,000 a year (net pay) that means that your mortgage should only be $771 or less a month.

Unrealistic expectations for a rising tide of home values and rising income is a lot of what took the housing market under in recent years.

4. Look at Your Unreported Secondary Sources of Income

If you only make $37,000 combined income on the books with you and your spouse, then that’s fine.

But if your mortgage amount on the house you want is more than that $771 dollars, you may need to figure the other ‘off-the-books’ sources of income you have.

If that includes working weddings for cash, your tax-free annuity settlement, or your scores of articles you write for Associated Content, that’s something you need to consider.

There are different ways of handling that income so you should speak to your real estate person about your specific situation.

5. Look at Other Sales in Your Immediate Area

If you are looking to move into a specific neighborhood and you’ve been told that you’ll need to pay at least $400,000 to live there, but you don’t qualify for that much mortgage, look towards other recent sales in the neighborhood; you may be surprised!

If other folks are snapping up homes for far less and you think you’d be able to qualify for mortgages of similar amounts, apply for that much and see if you can’t find the house to match.

Buying a home is an exhausting experience. If you get rejected on your first mortgage application, consider the five tips above and you could find yourself living the charmed life in the home of your dreams in no time!…

Using Mortgage Loan Modifications to Save Your Home

loan modification

A popular online topic is a mortgage loan modification. With the recession and unemployment highs, Americans are struggling more than ever to find ways of paying their bills.

RealtyTrac reported that this past week the number of US households facing foreclosure rose 32%. With numbers like this, many Americans are seeking help with the modification of their home loans.

Although there are qualified programs available, some homeowners are choosing to negotiate a modification with lenders themselves. Here are some tips for going about the negotiations.

Homeowners need to know their current financial position. They need to understand what their expenses are, what their income is and how much discretionary funding is available.

The lender will ask these questions and want to know what financial state they are being asked to work with. Owners who need guidance can contact the Consumer Credit Counseling office for a free financial analysis.

Next, homeowners should contact their lender with qualified information on what their part will be in the modification. If a homeowner has an extra $250 to contribute to monthly payments to get back on track, the lender may be willing to work with them. Remember that lenders want their money. That is their goal and they will work with customers if there is a viable plan to work with.

Lenders will require that homeowners have some plan of action. It’s best to have an answer ready for the lender and be able to justify the reasoning.

If a homeowner’s financial problems are temporary, they should tell that to the lender. It is possible to postpone payments, tack them onto the end of the loan and get the homeowner back on track.

The key here though is saved up funds as the next postponed payment date is coming. Consumers should use cut-backs, short term loans or tap into a nest egg to make sure they are well equipped to handle mortgage loan modification.

Homeowners with adjustable-rate mortgages are in particularly difficult situations when the rate goes up. Higher payments can make serious financial issues arise.

If a homeowner has an adjustable rate, call the lender and request a modification to a fixed rate. They should be ready, however, to present a plan as to how this is going to happen, however.

This is where they should be willing to get a second job, or better paying job, to show the mortgage company that they will be able to make the payments in the future.

In the end, the mortgage loan modification process may be the most viable option for saving a home. Lenders are willing to work with homeowners fairly, but there needs to be adequate communication and justification throughout the process.

All homeowners need to come to the negotiating table prepared with documentation including expenses, income, debt, and the proposed solution to the issue.

Being ready makes lenders more willing to listen and work with the customer. Mortgage companies want their money; they don’t necessarily want the property. And in today’s recessive economy lenders are more willing than ever to try to come to a solution for homeowners and help them save their homes.…

How to Calculate Mortgage Servicing Rights and CPR

mortgage

Mortgage servicing rights involve a lender’s rights to continue to collect mortgage payments and furnish monthly statements and mortgage services to the borrower after the lender has sold the original mortgage.

Mortgage servicing rights are retained by a bank for a predetermined fee, which is included in the borrower’s monthly payment amount.

Servicing rights are considered to be income for the lender and are typically outlined in the mortgage documents as a percentage of the loan’s outstanding principal balance.

According to All Business, an individual would calculate the mortgage servicing rights by first determining what type of mortgage loan is in question. Take the appropriate percentage and multiply it by the original loan amount as follows:

0.25 percent of the principal balance on conventional, fixed-rate loans;

For example on a 30 year fixed principal loan base of $108,900 obtained at a 7% interest rate, the mortgage servicing rights would be calculated as $108,900 multiplied by 0.25, resulting in a total of $27,225.

0.44 percent of the principal balance for loans aged less than one year that are backed by the FHA, Veterans Administration or Farmers Home Association; mortgages that have an originating principal balance of $50,000 or less also fall into this category;

For example, an FHA backed loan of $150,000 would result in mortgage servicing rights of $66,000. This figure is determined by multiplying the principal balance of $150,000 by the 0.44 percentage figure.

0.375 percent for other residential mortgages secured on one to four-unit properties.

For example, a sub-prime loan of $200,000 taken out on a three-bedroom house would result in mortgage servicing rights of $75,000.

CPR refers to an annual expected rate of principal prepayment that applies to a conglomerate of mortgages and securities that are backed by mortgage loans, according to MortgageQnA.

The CPR is used to predict the percentage of mortgage loans within the conglomerate that is expected to be paid in full within the current year.

Determine the CPR by the SMM or Single Monthly Mortality.

According to All Business, the SMM is defined as the percentage of mortgage principal balances that have actually been prepaid in addition to the regularly scheduled principal amount that is part of the loan’s amortization schedule.

In other words, it is the amount of the originating loan’s balance that is prepaid ahead of schedule or before the loan matures since most mortgages allow for prepayment or pay off at any time without incurring a penalty.

For investors of mortgage-backed securities, the SMM is the “prepayment risk.”

Calculate the CPR by using the formula of 1-(1-SMM) to the 12th power. According to MortgageQnA, the CPR could be interpreted as 12 times SMM or the pool’s expected prepayment rate.

For example, if your conventional mortgage falls into a pool with an SMM of 25 percent, the CPR would be determined as follows: SMM or 25 percent times 12, which would yield a CPR of 3 percent.

Simply stated, if a conglomerate of mortgage loans is determined to have a CPR of six percent, then six percent of the remaining principal balances in the conglomerate can be expected to be repaid within the year of calculation.…

How to Get Out of Debt Without Filing for Bankruptcy

bankruptcy

A lot of us these days are realizing more and more just how much debt we have.

The sources of these debts can be from student loans, mortgages, credit cards or vehicles. Sometimes the amount you owe can be downright overwhelming.

Most of us don’t know where to turn and often make mistakes that we think are solutions. Such situations are bankruptcy.

Bankruptcy might seem like the easy way out. You hire a lawyer, give them all your bills and financial information, you make an appearance in court and voila!

No more debt! Actually it is a lot more complicated and there are different chapters in filing bankruptcy. Even after you are declared debt-free and the creditors stop hounding you, it doesn’t end there.

Bankruptcy stays on your credit report for years and does a lot more damage and harm than good. Did you know that you do not have to file bankruptcy in order to get out of debt?

The first thing you need to do is to stop spending and getting further into debt. Stop paying for things with your credit cards, stop taking out loans to pay for things and do not borrow from anyone anymore.

You need to make a lifestyle change and force yourself to stop making the same mistakes. Tell yourself no to that new leather jacket, cd or car. Remember, your spending habits are what got you in this situation in the first place.

Then figure out just how far in debt you are. A lot of us don’t know the exact amount, which often shows that your situation is worse or that you are in denial.

Go through all your bills, this includes hospital and doctors’ bills, credit card statements, auto loans, etc. Once you have all of this together make a list of the amounts you owe, from smallest to largest.

The best way to do this is with a spreadsheet. You can get free spreadsheet software from Open Office or Libre Office.

Take a look at the smallest amount of debt owed. How can you pay for it? Is there something you can cut back on? Most likely there is.

Instead of buying coffee every morning on the way to work, brew your own at home and take the difference in price and apply it towards paying off your first debt.

By making small changes, you might be able to pay off that first debt within a few weeks to a month. After you have paid off one, cross it off your list and move on to the next one.

Once you pay off the first one, you will become even more motivated in paying off the second one. Take the amount you were saving from your first debt and apply it towards the second, along with more.

The best way to do this is to try selling things you no longer need. You can do this by having a yard sale, placing an ad in the paper or online through Craigslist or eBay. This will really knock out some of your debt. The little things really do count and add up fast!

Taking responsibility for your debt and paying it off without filing bankruptcy is very rewarding. It will teach you how to handle your finances in the future and not make the same mistakes.

It might take a few years and will be very tough at times, but you just need to remind yourself that there is a light at the end of the tunnel.

Keep a picture on your fridge or your desk that is your inspiration for getting out of debt, this will keep you motivated through the hard parts.

Before you know it, you’ll be sleeping and feeling better and have lots to look forward to once you are debt-free.

The biggest pay off is knowing you did it yourself and not taking the easy way out!…

How Student Loans Can Leave You in a Lifetime of Debt

student loans debts

Warning to all college students: If you take a student loan now, it may be with you for longer than you intend.

The goal of attending your favorite school seems like it is a mere loan away, but do your homework: According to millions of college graduates, your dream could become a nightmare.

It’s hard to turn down immediate money when you’re entering the university system. However, if you don’t educate yourself properly, you could end up in a debt cycle that might possibly haunt you for 20 years — or longer.

Between 1986 and 1989, Devin (not her real name) took student loans totaling $20,000. She graduated in 1989 with a Masters Degree in Music and embarked on a career as a music teacher in a local central Florida middle school.

Despite an SOS call to Sallie Mae and the misguided advice that she should default and let the loan return to its source, ISAC, Devin’s loan has now ballooned to $57,000.

Her wages have been garnished and nothing — not even death — will get her out of paying this hefty, and annually accruing, bill.

Here are details of how Devin’s debt grew: She paid an upfront $1,000 in Loan Guarantee and Origination fees, what you must pay in case of default; $1,000 in late fees; $16,000 interest; and $14,000 in recapitalized interest charges, which enfolded into original total accrued and $4,500 in “other fees.”

At present, Devin has paid the original amount, but there is no way she will ever pay back this loan. Here’s why: The interest on the loan is increasing faster than the payments can be made.

According to a CNBC report “Price of Admission: America’s College Debt Crisis,” the Department of Education says the number of defaulted student loans has doubled since 2005. Loan companies may garnish wages, take Social Security and nothing can free the graduate of the loan-repeat nothing.

The report profiles a couple who, sadly, lost their son and were told that, since they co-signed the college loan, they were responsible for remitting the more than $80,000 bill.

It is true that back in the 1980s, student loans were available to any student in need of financial help. However, the pendulum has swung back and now students, like Devin, don’t stand a chance against the system.

Pell Grants, usually reserved for students with low to moderate-income, have been cut for those attending school in the summer. As for the financial fate of students enrolled this fall, only time will tell.

Normally if you owe money, you can get it forgiven through bankruptcy. Not the case with student loans. Each loan has a 9 percent interest rate for each unpaid year. That is before penalties. These rates would make a loan shark jealous.

While Devin digs herself out of the enormous debt she’s incurred, the student loan pendulum continues its arc. The question is: How long will the current economic climate support the rising student loan crisis?

The outlook is grim, to say the least. College debt will rise to over $1 trillion in 2012. If Devin were to pay the debt off, it would take 45 years and cost a grand total of $180,000.

“Most people have a house mortgage,” she quipped. “I have a mortgage on my brain!”…