Installment Loans Info Center

Informing The Public About Installment Loans

What if you can’t pay back a payday installment loan you got from your lender? You would probably be worried about collection calls and the high fees associated with the default payment. But don’t worry so much because there are several ways to avoid this. Here are some of the tips you might want to consider if the time comes that you can’t pay back your payday installment loan.

Most payday installment loan lenders are members of CFSA or the Community Financial Services Association of America. This is a national organization that is dedicated to protect consumers through laws and regulations that preserve their credit options and encourage responsible practices in the payday loan industry. If your lender belongs to this organization, you can be assured that even if you can’t pay back your payday installment loan on time, your lender won’t be bugging you with collection calls and will give you an extended payment plan.

If your lender is a member of the CFSA, they are obliged to adhere with the Best Practices promoted by the organization. The mandated Best Practices ensures responsible conduct of lenders, upholds the protection of the rights of borrowers and shows the fees.  The lender will also provide options for an extended payment plan. All lenders that become members of CFSA pledge their commitment to responsible lending and are required to put their CFSA Member Seal (a little blue oval that says “CFSA”) in the window of each store or on their website and they should display the CFSA Best Practices on their business cards.

A borrower who can’t pay back his payday installment loan has the option to apply for an Extended Payment Plan or EPP. As indicated on the CFSA’s Best Practices, lenders should grant a borrower additional weeks for repayment, usually four paydays, if the borrower can’t pay back his payday installment loan. Under an EPP, a borrower is allowed to pay his default loan balance in four equal payments with periodic repayment dates. As long as the borrower is enrolled on this service and the EPP obligations are met, he won’t be bothered by collection activities. This service is offered to borrowers at no additional charge.
In order to get a CFSA Extended Payment Plan, a borrower who can’t pay back his payday installment loan must ask his lenders on the last business day before the due date of his loan. He will sign an amendment to the original loan agreement and will have a new repayment schedule. There may be no charge to enter into an EPP, but if a borrower fails to abide with an EPP, a lender may charge an EPP fee and other additional fees as authorized by law. EPP is granted only once in a year.

So if you are planning to get a payday installment loan, or if you have already taken one and can’t pay it back, make sure that your lender is a member of the CFSA.

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Probably you have heard of fraudulent activities involved in the online application of payday installment loans. You might be worried about the security of your data. So how can you be assured of the security of your data?

The answer to the question will depend on the lender of the payday installment loan you deal with. Fortunately, most lenders of payday installment loans take seriously the security of your data during your online application because the credibility of their business depends on it. If not, the lending company and its management could be subject to civil and even criminal liability.
If you want to ensure the security of your data during your online application for a payday installment loan, here are some suggestions from the experts:

1.   Before filling out the online application form, make a quick and careful review on the Privacy Policy included on your lenders website. Make sure that you understand the contents clearly and look for information that is of interest to you.

2.   Look for a customer service representative that can address your questions. It may be through a form, e-mail or live chat. Ask questions concerning the information you want to inquire about and evaluate the completeness of their answers.

3.   If there is no customer service representative available, you may go over to the websites Frequently Asked Questions (FAQ) section or you may click on About Us. Their security features are also discussed in this heading.

4.   You can also check how the payday installment loan company ensures the security of your data by the way they handle their customer accounts. A password-protected feature must be included so you can only access your account once it’s created. You should be able to modify your login account details as often as necessary.

5.   You can also ensure the security of your data during your online application for a payday installment loan by checking the security details on the application page. Most online lenders integrate security features into their websites. This includes a little yellow padlock icon down in the bottom right hand side of your screen plus the addition of the letter “s” after the http portion of the URL in the Internet address line at the top of the screen. These security symbols mean that your browser will encrypt the information before transmitting it to the lenders website.

6.   Finally, in order to ensure the security of your data during your online application for a payday installment loan check the business itself. Check if the location they have written on the website exists. Research and select lending companies that have already established a reputable track record. You may also check with the Better Business Bureau and local or state regulatory agencies to find out more about the lending company you have chosen before doing business with them.

There is no better way of protecting your rights than by knowing how to secure your data with every online application.

 

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If your education expenses aren’t covered by federal loans, scholarships or grants, you might consider looking for available loans for students. In these tough economic times, students themselves are now responsible for their own education. They are very aware about student life and capable of assuming responsibilities. They know that their parents cannot supply all their education expense needs. To get a better college education in a difficult financial situation, most students take advantage of opportunities of student installment loans.

Student installment loans are helpful when coping with high education expenses. In college most education expenses include high tuition fees, purchasing of different types of lecture books and other study materials, research expenses, dormitory fees, transportation expenditures, not to mention food. Without other sources of financial aid, students cannot easily cope with the pressures of financial needs and school needs.

Student installment loans are designed to help students pursue their education and carry their education expenses. With this type of loan for students, worry about a cash dilemma and repayment arrangements is eliminated because they come with easier terms and convenient repayment options. This type of loan for students is regarded as one of the best short-term financial aid options that effectively ease most financial burdens.

Student installment loans are issued at a prefixed time period with a specific amount to be repaid. Because the repayments for this type of loan for students are fixed at the time of loan approval, the student borrower can prepare the amount he needs for repaying the loan. Also, you can get the loan with easy repayment options. Unlike traditional personal loans, this type of loan for students is repaid in installments and the amount repaid monthly doesn’t change until the loan is paid off. In fact, if you want to extend the repayment of your student installment loan, you can do so by asking your lender and filing a new request.

The best part of most student installment loans is the comparatively low rate of interest charged. Also, these loans for students are available online and no credit check is performed. The minimum requirements include being 18 years old or above and a legal resident of the country. So every time there’s a need to pay for an urgent education expense, you can conveniently apply for these available loans for students 24 hours a day and 7 days a week. Since there is no credit check performed, even if you are struggling with a bad credit, there is a great possibility that you can be approved for this loan. You just need to look for and choose among the numerous lenders available online and select the one that suits your needs.

College education expenses will never be a hindrance for students today. With the help of student installment loans, every student can go on with his campus life smoothly.

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During tough cash needs, people look for options to get through with their financial difficulties. However, most banks are lending less and the qualifications make it harder for people to qualify. So, many people turn to payday cash advance installment lenders for short term loans. But sometimes these loans come with high interest rates that make them not easy to repay.

Because of this scenario, many people look for options that will provide for their instant cash needs.  Loans that are easy to repay and doe not deplete their entire paycheck. This is why payday installment loans are a good option for credit. Payday installment loans help you with your cash needs when you need it the most. If you have been turned down by traditional banks and have been disappointed by how payday loans work, then a payday installment loan could be a good option.

Here are several reasons why Payday Installment Loans are a good option:

1.   Most payday installment loans have a high approval rate, as well as a shorter period for loan approval.  Most traditional banks take a longer time to be approved, especially when you have less than a desirable credit history.

2.   Payday installment loans offer easy to repay options with enough time to repay the loan. Although payday loans offer a quick solution for cash needs, the repayment schedule is usually short-term and additional surcharges and late penalties are added. With a payday installment loan, you have a fixed amount to be paid in a predetermined period of time.

3.   When not paid on time, credit cards can increase your debt and may be detrimental to your credit rating.  This certainly won’t help further your financial dilemma. Unlike credit cards and other short-term loans, these payday installment loans offer lower APRs (annual percentage rates) and lower EARs (effective annual rates). In addition, payday installment loans are easy to repay with their convenient and flexible options.

4.   Compared to other types of short-term loans, with a payday installment loan you have a flexible time to repay your loan. Payday installment loans allow you an extended payback period that provides you enough time to manage your budget. You can even have the option to set your own payment plan. You can have the option to pay in smaller amounts over a longer period of time, or you can also repay the loan quickly.

5.   Just like other short-term loans, payday installment loans also offer fast approval, even for customers with bad credit or no credit. You can provide for your immediate cash needs on the same day you that you have applied.

6.   With a payday installment loan, it doesn’t take much in order to be approved. You will only need a few documents to comply and then you get your cash needs instantly. Typically, you will need the following:

Current checking account for at least 6 months
Proof of income with a net monthly income of $1000
Proof of residency
Current phone bill (some lenders may not require this)
Valid driver’s license/State ID (some lenders may not require this)

So why suffer from your financial dilemma if payday installment loans are there for you? Ask from an online lender today and get your cash needs right away!

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Most people who live with a fixed income oftentimes face financial and credit problems. Unexpected expenses happen. Emergencies that need instant cash can arise. The worst part is the times when the need is very crucial and so urgent that you can’t wait for the next payday to come, even if it is only a couple of weeks away. For this situation, a cash advance installment loan can be the most suitable solution to resolve the problem.

There are many short-term loans available in the financial market, but most of the repayment plans they offer are quite burdensome for many borrowers. In addition, problems soon arise after getting these loans because most of the repayment plans often include repaying the debt after two weeks or within a month.

Therefore, borrowers had a hard time repaying the debt. Before they can actually cope with their financial difficulty, they need to repay the loan amount. They barely have enough time to survive from their financial emergency. Added to their dilemma, is the fact that they have to repay in a single payment the whole principal amount with the interest. Borrowers have to pay for additional fees and high interest rates if repayment is not made on time.

To overcome these problems, lenders have introduced cash advance installment loans with easy repayment plans.  The repayment plans of cash advance installment loans are advantageous and stress-free for the borrowers. Why? Because of three reasons:

 

1.  Cash Advance Installment Loans have a fixed schedule.

As its name implies, cash advance installment loans can be repaid in periodic payments or in installments that are remitted to the lender on a fixed schedule. Factors considered in establishing a repayment plan, which will be divided in periodic payments, include the principle amount, the duration of the repayment plan and the interest rate agreed upon by both parties before the loan is completed.

This kind of repayment plan or pre-arranged plan of repayment is often considered desirable and convenient for borrowers because it provides regularity in budgeting and calculating their monthly expenses. In addition, borrowers are always presented with this proposed repayment plan and a pre-determined amount before finalizing the loan agreement. So, it creates an opportunity for borrowers to shop elsewhere if the repayment plan is not desirable or to burdensome to repay.  Although the frequency of the payments can be altered by the lender before the loan is closed, most of the payments are remitted and repaid on a monthly basis.

2.  Most Cash Advance Installment Loans repay the interest rate first.

Depending on the lenders policies and practices, cash advance installment loans can be repaid in several different ways. Some lenders propose a certain percentage of each payment to be applied in the principle balance and another percentage to be applied in the interest. The most common repayment plan offered by lenders is that the bulk of the interest be paid in the first several payments, and then the principle amount be paid after the interest payments are fully paid. This kind of arrangement is known as the amortization table, and is presented to the borrower before closing the deal.

3.  Cash advance installment loan is repaid in a fixed amount.

The most beneficial repayment plan offered by cash advance installment loans is having a fixed amount to be repaid. The amount can’t be modified for the whole course of the loan, and rarely varies despite changes in the financial market.

 

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For the benefit of those borrowers of installment loans, there is a new set of rules regarding credit scores that took effect in 2011. The Dodd Frank Financial Reform Act changed federal laws regarding credit scores. Starting last July 21, 2011, lenders who deny a borrower  an installment loan or any payday loan, is required to show the borrower his credit score for free.

The new rule is part of the amendment made to the Dodd Frank Wall Street Reform and Consumer Protection Act that passed two years ago. The act was introduced by Sen. Mark Udall who said, “Your credit score can skew the terms of your car loan or even prevent you from being approved for a home mortgage. With such important financial decisions hanging in the balance, you ought to be able to see the score that is being used against you.”

This act requires lenders and creditors to provide additional information that influenced their credit decision and  helps borrowers to know how their creditworthiness is gauged. A lender must disclose to the borrower how their credit scores were arrived at, what the range is in getting the possible credit scores, what model is used, date the credit score was created, and name of the entity or person who provided the credit score.

It is a fact that borrowers with bad credit scores are usually given higher interest rates and less-favorable loan terms compared to those with a good credit standing. The amendments on the existing federal laws pertaining to loans and credit scores will add to the level of protection for American borrowers and will help borrowers make wise choices about their finances.

Several negative issues came out pertaining to this Act. The FICO (Fair Isaac and Company), developer of the software used by U.S. lenders in generating credit scores, views the new provision as resulting in disclosures of more than 500 million credit scores each year. This will be a lot of work for lenders. Some consumer advocates also fear that the new amendment on the existing federal laws may not be strong enough to protect the rights and welfare of borrowers. The rules may not be clear enough for borrowers to get all the information they need.

Although the new set of rules on credit scores are provided to uphold the rights of borrowers, they still need to know how to exercise these rights responsibly. Aside from knowing that getting the information on your credit score is free, it is your right to have it. It may have once been a mysterious and proprietary secret used exclusively by the credit bureaus and lenders, now credit scores can be used by borrowers in managing their finances.

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According to the Consumer Federation of America, a borrower can get an average amount of payday installment loan between $100 and $1,000. So, if you need an amount more than this, or if your state loan regulations cap payday installment loan limits at an amount less than this, you might consider getting more than one loan at the same time. The big question, however, is whether you are allowed to.

A borrower can get more than one payday installment loan depending on what state he resides in and the state loan regulations. However, most state loan regulations and even lenders will not allow a borrower to have more than two payday installment loans at the same time. There are several reasons for this.

The most important reason why getting more than one payday installment loan at the same time is not allowed by most state loan regulations is because they want to protect both the payday lender and the borrower. Issues on default payments and increasing the amount of debt to be paid will arise and explained fully. Let’s consider this scenario. When a borrower takes out a payday installment loan, he is bound to set a schedule to repay the loan. If having more than one or two loans at the same time puts the borrower in stress or would make it more difficult for him to repay, the two loans will usually not be approved.

In addition, allowing a borrower to take out more than one payday installment loan may not be good for lender because it will produce a considerably higher risk for defaulting. This is why most lenders make use of a method to check how many payday installment loans a borrower has taken out. This is for the mutual protection between the lender and the borrower. On the brighter side, not allowing a borrower to get more than one payday installment loan will keep the borrower from getting sunk in more debt.

Different states have different state loan regulations. States found along the west coast of United States have various regulations on the number of payday installment loans a borrower can have at the same time.

  • As of 2010, the state of Arizona prohibits payday installment loans, while Utah and Oregon have no state loan regulations on the number of loans and amount a borrower can have.
  • The state of Montana allows two, while California and Hawaii allow only one.
  • In Colorado, a borrower can’t get a combined total of more than $500 on outstanding payday installment loans, and each loan must be a minimum of 30 days apart.
  • In New Mexico, the combined total of payday installment loans you can get should not be more than 25% of your gross income.
  • The state of Idaho limits to $1,000 and Washington to $700 in the amount of the loan.
  • Wyoming, Nevada and Alaska have no specific state loan regulations on multiple payday installment loans.

State loan regulations and requirements in Midwestern states are more specific.

  • As of 2010, the states of Illinois, Iowa, Nebraska, Kansas and Oklahoma permit a borrower to have 2 outstanding payday installment loans at the same time. The state of Indiana allows multiple loans but only one loan per lender.
  • In the state of Ohio, you can only have one payday installment loan at a time with a maximum of 4 per year.
  • Michigan, Arkansas, and Wisconsin allow unlimited payday installment loans, but only one per lender.
  • Missouri, Minnesota and North Dakota have no specific state loan regulations on multiple payday installment loans.

Most of the states in the Eastern United States prohibit payday installment loans except in New Hampshire and Rhode Island. New Hampshire allows only one payday installment loan at a time. Rhode Island allows you to have three but their combined total amount should not be more than $500.

Most southern states allow a borrower to have only one payday installment loan at the same time.

  • In Alabama and Texas, a borrower can take out an unlimited number of payday installment loans but should not be more than $500 when the total amount is combined.
  • Tennessee allows you to take out up to 3 payday installment loans at one time, but only two loans at the same lender.
  • People in Kentucky are most favored because they are allowed to have two loans, each not more than $500 at the same time.
  • However, payday installment loans are prohibited in West Virginia, North Carolina and Georgia.

It is important to know first your state loan regulations before applying for a payday installment loan so you will be aware of how many times can you get a cash advance payday loan and the laws behind each.

 

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Believe it or not, payday installment loans make up a vital part on your credit score. Even if you do not want to apply for a payday installment loan now, you might need it in the future. Oftentimes, the lack of a previous cash advance payday installment loan may reduce your chances for an approval because you may not be able to establish a FICO score.

The FICO score reflects the borrowers credit history and reports this in a number which is commonly used to reflect credit worthiness. This is because the FICO score gives different weight to various types of loans and debt activity. A FICO (acronym for Fair, Isaac Company) credit score represents your credit history and tells a lender the risk he will take in lending money. The score ranges from 300 to 850, usually with 850 being the perfect FICO credit score.

Since credit scores are the summation of most credit histories, many lenders use these as a deciding factor for what type of loan to approve for a borrower. Credit scores usually affect several very important aspects of the loan. Here are some of the important aspects of credit scores:

  • Length and Type of Loan – Lenders depend on credit scores for the basic terms for the loan, including the length and type.
  • Interest Rate – This is one of the most important aspects of the loan that is commonly affected by credit scores. Lenders of payday installment loans will charge lower interest rates and monthly payments to those with good credit scores.

However, without previous loans, such as cash advance payday installment loans, you can hardly build your credit score. Without a payday installment loan on your record, you may not be able to have a good variety of credit. This usually accounts for 10% in the FICO formula. This may not mean that you must apply for a payday installment loan to obtain good credit scores. It only implies that getting loans is one way of establishing credit scores. Aside from getting a variety of lines of credit, you must never forget the most important thing, always pay on time and manage your loans or credit responsibly. Having too many loans will also be not good for you.

In addition, you might lose a few points on your FICO credit score because of not getting a payday installment loan. This could make loans more expensive since most lenders set interest rates based on what tier your credit score falls. As of 2011, the most common tier is between 760 and 850. If your credit score is below this range, except to have a few more percentage points added to your interest rate.

Although applying for a payday installment loan is helpful in building your credit scores in some cases it may not be a wise choice. Any debt can be harmful to your financial state. But just as loans affect credit scores, these credit scores will also affect your loans. So, handle both of them responsibly.

 

 

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When you apply for an installment loan, a lender will provide you with a loan contract. The lender uses a loan contract as a formal document regarding the agreement he and a borrower will have during the course of an installment loan. Loan contracts may include negative and positive covenants, guaranties, applicable interest rates and fees, and the amount and mode of repayment of the installment loan. Upon signing the loan contract, a borrower consents to borrow money on the terms offered by the lender.

An installment loan contract is prepared according to the requirements of the Truth in Lending Act in order to inform the borrower of the cost of their loan. Some states may have additional or differing provisions on loan contracts. Since there are some lenders who may be practicing predatory activities, it is important to research the background of your lender. It will also be a big help before signing a loan contract for an installment loan to let a reputable lawyer review it.

A loan contract, in compliance to the Truth in Lending Act, must have the following General Contract Provisions:

  • True and clear identification of both the borrower and lender (including the names and addresses)
  • Finance charges or the cost of the credit over the course of the loan
  • Annual percentage rate (APR)
  • Schedule of repayments and the amount to be repaid monthly
  • Total amount paid that includes the principal, total interest, other charges and fees
  • The right of the borrower to cancel the loan contract but within three days of signing
  • Agreements on missed or default payments. This will also include the provisions on repossession (in case there’s collateral).

Mode of Repayment

Installment loans use amortization. This means that a lender will structure the borrowers payments in such manner that the borrower will be paying off the principal and interest by the time he makes the final payment. Usually, the loan contract will include the details of the monthly payment due date.

The loan contract will also include the details for grace periods, typically, ten days after the due date. This will enable the borrower to come up with his payment on time in case the actual due date falls on the weekend.

Interest

Usually, installment loans have fixed interest rates that will remain the same for the entire course of the loan. The interest rates are reflected as annual percentage rates (APRs) in order for the borrower to see how much the loan will cost on an annual basis.

The loan contract will also include the details of the index that influences a change in interest rates. There are also details about payment floors and caps that form part of the agreement. Lenders also indicate on the loan contract the dates if interest rates change during the duration of the loan.

Other Details

Some lenders may offer borrowers credit insurance as part of their installment loan package. This credit insurance is paid on a monthly basis.  The insurer will cover your loan payments in case you lose your job or suffer from an unexpected financial event. The details of the cost of the insurance and its coverage are included in your loan contract.

When applying for an installment loan, understanding the provisions under the loan contract is important. Before signing up, borrowers must know what they are about to enter into.

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Lending of money is regulated by the Truth in Lending Act. Because of the controversies surrounding the payday industry, U.S. legislators believe that consumers deserve to know the cost of borrowing money from lenders. The Truth in Lending Act forms part of the Consumer Credit Protection Act passed by congress in 1967 and enacted on May 29, 1968.

Basically, the Truth in Lending Act is promulgated to protect borrowers from unfavorable lending practices that often lead to borrowing beyond ones means. It also protects borrowers in their dealings with lenders and other creditors. Through this act, lending and financing companies are mandated to disclose to their consumers all relevant information, including interest rates and fees, before processing loan applications.

The Truth in Lending Act applies to all credit transactions that are financed by private lenders or companies that deal in monetary loans, such as installment loans. The money loaned usually has a finance charge and payment schedule. Consumers that are constantly borrowing money are the beneficiaries of the act, including the credit extended to families, individuals or farms. However, business or commercial interests that apply for credit cannot take advantage of the provisions in the Truth in Lending Act.

Due to the numerous complaints regarding predatory and malicious activities of some lenders, the Truth in Lending Act was created. It protects the consumers from unfair or misleading lenders who do not readily provide all of the details about their credit transactions. Through this Act, any credit institution is obliged to provide the annual percentage rate (APR), credit terms and methods for dispute resolution for any transaction.

Lenders must disclose the cost of lending to customers by including a clear explanation on the finance charges, the total amount of the loan, and the due dates for the repayment of the loan. The role of the borrowing consumer is to study the terms provided by lenders to make appropriate decisions before pursuing the loan or credit.

If a lender or any lending institution violates the Act, they will be responsible for any damages incurred to the borrowing consumer. In additional, any of the borrowers attorney’s fees and costs will be the responsibility of the lender or the lending institution. The Truth in Lending Act takes precedence over all state laws regarding credit and lending.

Though each state may have its own variations on the Truth in Lending Act, the most important feature remains the same, that is, to protect consumers in their dealings with lenders and creditors and to ensure that they are aware of the terms and costs of borrowing and credit. This can only be done by strictly implementing the proper disclosure of all key information to protect both the consumer and the lender in any loan and credit transaction.

 

 

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