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 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!”…