Installment Loans Info Center

Informing The Public About Installment Loans

Long ago, the traditional way Americans borrowed money was through personal loans and credit cards. Things like mortgages and student loans, small business loans and credit cards, are financial agreements that every American citizen has most likely used, or will use, at some time in their life. These forms of credit are by no means something to avoid when there is a cash shortage of cash.

The problem with these credit options is that you need to undergo a long loan process, especially when you are applying for a bank loan. Credit reports are ordered, phone calls are made and backgrounds checked, leaving a high possibility that an applicant won’t be accepted. With all the value put on good credit these days, it’s difficult for those without it to be approved for a decent loan.

With so many Americans struggling financially, short-term loan options (such as payday installment loans) are growing in popularity. In fact, there are payday installment loan lending stores and online lenders that specialize in payday lending and can help you get through tough times quickly and easily. Payday installment loan lenders provide means for consumers who are having a hard time making ends meet.

Since most payday installment loan lenders don’t require a high credit score, or even a good one, many consumers of traditional loans have shifted to payday lenders. This is because most payday installment loan lenders don’t check credit reports at all. Usually, all they want to see is a stable source of income and a bank account with direct deposit for those applicants desiring to borrow.

Sometimes just a little bit of help and a few hundred dollars makes all the difference in the world. With the payday installment loan industry migrating to the online community, some consumers are concerned about the safety of borrowing through the internet. There are phishing scams out there that prey on people trying to get short-term loans, stealing anything from their personal information to their bank account numbers. Despite all these risks, many consumers still borrow from lenders online because they are a great source to help with emergency financial situations.

It is true that on the Internet, it’s hard to know who to trust. Luckily, along with the online trend, there are organizations dedicated to helping potential borrowers with this process safely. Before their customers are directed to any of the participating lenders’ websites, each payday installment loan lender has agreed to take the necessary steps to ensure that all consumer information is kept safe and secure.

Payday installment loans, whether acquired from an actual payday loan ‘store’ or through the internet, are an integral part of the American financial system. Through payday installment loans, cash-strapped individuals are given means to get out of their financial stress. Payday installment loans make it possible for consumers to borrow money when they otherwise wouldn’t be able to. In fact, payday installment loans are invaluable tools for many struggling Americans who are just trying to survive in these difficult times in the economy.

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The government has warned consumers to be vigilant against abusive debt collection practices. This is in response to the increasing complaints from consumers about abusive debt collection practices of some payday installment loan lenders. Many consumers are victims of abusive debt collection practices, especially when dealing with illegal and non-licensed payday lenders. Most complains reported by consumers include threats, harassment, revealing debt to third parties, trying to get consumers fired from their jobs or even filing of a civil suit in small claim courts.

This is why consumers are advised to deal only with reputable and legal payday installment loan lenders that are properly licensed in order to avoid abusive debt collection practices. These lenders value their reputation and take care of their clients and consumers.

To inform consumers, the Consumer Federation of America (CFA) provided a list of the different forms of abusive debt collection practices exercised by unscrupulous payday installment loan lenders. Consumers should be aware of these practices to protect themselves from abusive lenders.

Abusive Debt Collections by Phone

This is usually done by payday installment loan lenders in order to harass you until you pay your debt. Here’s how it’s done:

·    Calling repeatedly or continuously, about a hundred calls per day

·    Calling before 8 a.m. or after 9 p.m.

·    Calling your office, place of work or even your relatives

·    Shouting and using abusive language, racial slurs, threats or deception.

Abusive Debt Collections in Person

If your payday installment loan lenders harass or embarrass you in front of your peers until you pay your debt, this is a form of abusive debt collection practice. They may also do any of the following:

·    visit you at your home

·    leave conspicuous “door hangers” if you are not there

·    visit you at your place of work

Abusive debt collection in person may include shouting and using abusive language, racial slur, threats, deception or even reveal your debt to your family, coworkers and neighbors.

Posing Threats

The most common threats of abusive payday installment loan lenders include any of the following in order to scare you into paying your debt:

·    civil suit or criminal prosecution

·    garnish wages or seize properties

·    cause you to loss your job

·    have you jailed

·    damage or ruin your credit rating

By virtue of the Fair Debt Collection Practices Act (FDCPA), these threats are unlawful and strictly prohibited, unless the party making the threats has both the authority and intent to take the threatened action. However, the FDCPA applies only to debt collectors or collection agencies. Payday installment loan lenders are not bound by the FDCPA because they do not meet the definition of “debt collector” under federal law. But you can still report any threats by these lenders to the BBB (Better Business Bureau) or to your State Attorney General.

Deceiving Debt Collections

In some cases, abusive debt collection practices deceive consumers of payday installment loans into repay debts. These are manifested through the following:

·    claiming to be an attorney or government employee

·    claiming to be a law enforcer and threatens you with arrest or jail

·    sending documents that look like legal papers but are not

·    sending legal documents not related to the collection of debts

There are other forms of deception, so the best way to protect yourself is to fully understand the state laws where you live.

To prevent being a victim of abusive debt collection practices, deal only with reputable and licensed payday installment loan lenders. Compare lenders carefully and check with state regulatory agencies about licensed payday installment loan companies.

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If you’re caught short of cash, you might consider getting a loan. With so many credit and financing agencies available today, which among them is the best?

In this article, we will compare the two most popular options in getting a loan – a payday installment loan and a traditional bank loan. A payday installment loan is a short term unsecured loan offered by loan lenders that are repaid on the next payday. These loans have no collateral and no credit checks.

Traditional bank loans require collateral, some valuable assets and some savings in the bank. Traditional banking typically involves a brick-and-mortar location as well as access to ATMs and online accounts. Online banks, by comparison, are nontraditional in that they only do banking on the Internet and do not have physical branches.

Benefits of Traditional Bank Loans

1.    FDIC Protection

One of the biggest advantages in putting your money into traditional banks is FDIC protection. The Federal Deposit Insurance Corporation is a government entity that insures deposits in bank accounts up to $250,000, as of March 2011. This means that if the bank goes into default, the government will reimburse you up to $250,000. If you want to have more than $250,000, get more protection by working with multiple traditional banks.

2.    Financial Services

Using a bank can also provide you with access to other financial services. For instance, you can get access to personal loans, debit and credit cards and online bill pay. When you put money in your checking or savings account, you will earn interest on your deposit. You can also have access to the bank’s network of branches and ATMs.

Differences of Traditional Bank Loans and Payday Loans

1.    Qualification Criteria

Traditional bank loans and credit union loans tend to be rather difficult to qualify for if you have anything less than a flawless financial history. Most banks check how you’ve paid on your other accounts in the past to determine your creditworthiness. If you have missed a few payments or paid late on occasion, your chances of qualifying may be low.

On the other hand, payday installment loans tend to have more flexible qualification criteria, although this may vary by lender. With most payday installment loans, the lender will be more concerned with your current income level and employment status than your credit history. Many borrowers are accepted by payday lenders over traditional bank lenders because of these somewhat relaxed standards.

2.    Size and Loan Term

Unlike traditional bank loans, payday installment loans are intended to help the borrower pay for fairly small expenses, which is why they tend to be smaller. Traditional bank loans can also come in small denominations, but they tend to be larger. The typical payday installment loan is about $500; however, the size of your loan will depend on the lender’s terms and your monthly income. The terms of payday installment loans also tend to be shorter than those of bank loans. For example, a personal bank loan may have terms of six months to a year, while a payday installment loan typically has a term of about two weeks or a month.

3.    Finance Charges

The APR (annual percentage rate) of payday installment loans is usually larger than that of traditional bank loans. Though payday installment loans have some of the most expensive finance charges, this does not take into account the speed and convenience they offer. Traditional bank lenders are less willing to take risks loaning to risky borrowers, so they grant loans only to borrowers they are fairly certain will pay the loan back. Payday installment loan companies take much more of a risk, which is why their finance charges tend to be higher.

A payday installment loan and a traditional bank loan are different but both of them offer consumers important financial options that can help them pay bills and meet emergency needs. In the end, the financial well-being of the consumer is the reason why these lenders exist.

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Oftentimes, borrowers of payday installment loans find it difficult to repay them on time and avoid paying for additional fees. In case you are unable to repay on time, contact your lender immediately.

Usually, lenders hire a third-party collection agency to go after borrowers who are unable to repay their payday installment loan. These collection agencies often call you on your phone at home or at work until they get a repayment for the payday installment loan you owe. They will never stop calling and this may cause some problems. Your work will suffer because of this harassment, or worse, you may end up losing your job for taking personal calls.

There are a few lenders that will threaten borrowers who are unable to repay their payday installment loans using “bad check laws“. But, state laws have been enacted that specifically prohibit or restrict the use of bad check laws to prosecute borrowers who are unable to pay on their loans. However, lenders can file a civil case against you.

There are some instances when a borrower who is unable to pay on their payday installment loan may face criminal charges and can go to jail. When a borrower commits fraud or fails to make good on a debt settlement. An example of this is the so-called “hot check” or writing checks that cannot be cleared. The law against “hot checks” can only be applied to individuals who have knowingly and maliciously written a bad check.  A borrower can be put in jail if he fails to comply with an order from a judge who is hearing a civil case against him. He will be charged with contempt of court and be sentenced to jail for a few months.

In order to avoid consequences related to non-repayment of a payday installment loan, here are some hassle-free tips to follow:

1.    Determine how much you need to allocate from your salary as repayment for your payday installment loan. If you can’t afford the repayment, you may need to opt for a smaller loan amount or get a longer repayment term for your payday installment loan.

2.    It is important that you are on time with your repayments to avoid being charged with additional fees. Paying on time will reflect your credit rating and your ability to take out a loan with the same lender or other lenders.

3.    If in any case you are unable to pay your payday installment loan in full and on time, call your lender immediately and inform them of your situation. The earlier you do this, the more your provider will trust you. Calling at the last minute will only show how irresponsible you are and how careless you are about your payday installment loan. This results in no negotiation or other alternative loan repayment options. Taking out of a payday installment loan needs financial planning, diligence, trust and responsibility.

4.    Create a reminder for the repayment. Applying for a payday installment loan is a personal choice to keep your spending and expenses under control in order to avoid additional financial stress.

A hassle-free repayment for a payday installment loan is a good start for a debt-free life. You may be in debt for now, but paying responsibly and on time will help you build financial trust and a good relationship with your lender. This in turn will give you good credit scores that may a big leap towards financial freedom.

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Getting an online payday installment loan is by far the most convenient, most cost-effective and the most efficient way to borrow short-term funds for emergencies. Aside from offering an online application, many lenders of payday installment loans are now offering faxless loan applications.

In a report of the Consumer Federation of America, most Americans are likely to avail faxless services on payday installment loan applications and are paying an average of $520 a year in fees for these short-term loans. A separate study conducted by Pew Charitable Trusts’ Safe Small-Dollar Loans Research Project, has found that an estimated 12 million Americans who submit online applications for faxless online payday installment loans have an average of eight loans per year at $375 each. This shows that many are patronizing the faxless services because of their convenience.

Typically, in the course of 2 weeks (when the payday installment loan becomes due), an average of $15 is charged by the online lender per $100 borrowed, with a calculated 391% annual percentage rate. Despite the expensive cost of a faxless payday installment loan, many still patronize this lending option because they do not require a credit check, documents need not to be faxed and they can get the cash they need immediately.

One of the most common problems associated with this short-term borrowing is indebtedness. Many of those who have submitted their online applications and been approved in minutes but struggled for months to repay their loans. So, it is important that any borrower who wishes to apply for a faxless payday installment loan be responsible for repayment. Here are the basic tips on how to cost-effectively get a faxless payday installment loan:

1. Careful Selection of a Loan Product and an Online Lender

When setting the borrowing process in motion, you need to provide some very basic information about yourself and the type of loan that you seek. Most online lenders will ask you about your contact information and employment information, as well as a brief description of the type and amount of the faxless payday installment loan that you need.

2. The Borrowing Process

Once your online application is approved for a faxless payday installment loan, you will be presented with an electronic agreement about the details and the terms of your loan. You will also be called by an authorized representative from your online lender to verify the details of your online application in order to move forward with this process. So, make sure to review the terms of your loan before providing your consent via electronic signature or through verbal consent over the telephone, depending on how the provider reaches to you. The completion of the borrowing step is when a direct instruction is given on how you can withdraw the electronic transfer from your bank account. Usually, this will take one business day, depending on the online lender you have dealt with.

3. Responsible Repayment of your Payday Installment Loan

When a payment is due on your payday installment loan, make sure that your account has sufficient funds because the repayment will be automatically withdrawn from your bank account. Should you need additional time to repay, contact your online lender and inquire about the repayment options for an extension of the loan for another pay cycle. However, keep in mind that there will be an additional charge. Make sure to avoid this option, as much as possible, to avoid falling in the cycle of debt.

Faxless payday installment loans are helpful in times of financial needs. However, you need to do a thorough research to get the best rates and the best online lender.

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Consumer alerts from the office of the Attorney General aim to inform consumers on unfair, misleading or deceptive business practices, and to provide information and guidance on other credit issues. One great concern addressed by the Attorney Generals today is regarding the issue on getting payday installment loans.

Also known as payday loans, cash advances, or check advances are described by law as a “deferred presentment service transaction.”  Most payday installment loan transactions are small, short-term arrangements where the consumer gives the payday lender a check to cover the payday loan amount borrowed including service fees. In return, the payday lender provides the consumer with immediate cash.  Typically, payment is required from the consumer’s next paycheck. To qualify, the consumer will only need personal identification, a checking account and proof of steady income from a job or governmental benefits.

Because payday installment loans have a short repayment period, many consumers fail to make the payments. Instead of short-term financial relief, the consumer experiences perpetual indebtedness. This is why the Attorney General is informing the public on the proper use of payday installment loans and the rights of consumers.

When a consumer applies for a payday installment loan, he is asked to sign a written agreement, which includes an itemization of the fees to be paid and the annual percentage rate.  The limits on the service fees for payday installment loans are based on the amount of the loan.  The payday lender may charge up to 15% on the first $100, 14% on the second $100, 13% on the third $100, 12% on the fourth $100, and 11% on the fifth and sixth $100. However, the fees charged depend on the state where the payday installment loan is offered.

A consumer needs to know his rights when applying for a payday installment loan. The written loan agreement must include the following:

1.    Payday installment loans are not intended to meet long-term financial needs.

2.    State laws prohibit lenders from entering into a transaction if you already have a service agreement in effect with the lender or have more than one agreement in effect with any other lender who provides this service.

3.    Lenders must immediately give consumers a copy of the signed agreement.

4.    State law entitles consumers the right to cancel loan agreements and receive a refund of the fees.  To do this, consumers must notify the lender and return the money they received by the time the office closes or on the next business day.

5.    State law prohibits lenders from renewing the payday installment loan agreement for a fee.

6.    State law prohibits lenders from using any criminal process to collect payments from consumers.

7.    State law entitles consumers the right to file a complaint against lenders if they believe that the lender has violated the law.  Consumers can call the Department of Insurance and Financial Services toll-free at 1-877-999-6442.

8.    Any consumer who believes a payday lender has violated the law should contact the payday lender in writing detailing the nature of the violation and providing all the evidence to substantiate the complaint.

The payday lender has three days after the complaint is filed to respond and if they did violate the law, they must return the check received from the consumer and any service fees paid. If the payday lender does not believe they have violated the law, they must notify the Commissioner of the Department of Insurance and Financial Services (DIFS) and the consumer of their conclusion. DIFS will investigate complaints promptly.

It is necessary that consumers of payday installment loans know their rights. This will not only save consumers from predatory lenders, but will also help them become responsible borrowers.

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Payday installment loans are popular nowadays because of the convenient financial service they provide.  No one can argue with the fact that they are specifically designed to be quick cash resources. These loans are designed for simple emergency use and not a long-term solution to credit problems.

Learning the right way to apply for payday installment loans can be a big help in case you find yourself with an emergency that needs a one time solution. There are a lot of companies offering payday installment loans, so it is essential that you apply with a trusted lender. To do this, you need to educate yourself about payday installment loans in general before you start the application process. It is important that you understand all the terms before you apply for payday installment loans so that you get the most out of your loan.

Before you apply for a payday installment loan, you need to determine whether this loan is right for you. It is recommended that you consider how you’re planning to use it, how urgent your need is, and what your other options are. Payday installment loans are short-term loans, so you should only use them after you’ve considered the facts and decided that this is your best option.

A survey to find out why payday installment loan customers use these loans, it showed that 75% of them use these loans to cover unexpected expenses or pay bills. The most popular reasons were to get a repair for their car, pay for medical care and expenses or to cover a monthly bill. Payday installment loans provide quick cash, so if you’re a little short, these loans are a great to save money by avoiding bounced check fees and late fees.

An advantage of a payday lender is that you are assured you are not dealing with a scam and your personal information is secured.Also direct lenders offer the best rates and terms on payday installment loans. Here are some guidelines on how to choose a lender of payday installment loans:

1.    Research for the best direct lenders of payday installment loans. You can find payday installment loan lenders in several places within an urban area or through multiple websites on the Internet. They may look the same, but carefully compare their rates and terms of the loan agreement.

2.    Most direct lenders of payday installment loans will not require a credit check, but do expect you to repay the loan on your next payday. In some instances, you may be able to make payments over the next 3 paydays. You will be required to sign a loan contract that provides these terms. Make sure that you have read and understood the fine print on the contract. If not, don’t hesitate to ask.

3.    Find out if the lender where you will apply for a payday installment loan will be contacting the credit bureaus prior to granting the loan. Tell them if you want to keep this information off your report.

4.    All lenders of payday installment loans require direct deposit of your salary into your bank account. This way, they have leverage that gives them protection to get repaid when the loan is due.

5.    Ensure that payday installment loans are legal in your state if you intend to apply for one through the Internet. Some states have outlawed their use.

6.    You may also check for customer satisfaction comments on the Internet for the direct lender you have chosen. This is to ensure that you avoid predatory lenders and scam that may take advantage of their customers.

Payday installment loans are preferable for small emergencies or when you are caught off guard between paydays. For millions of people, payday installment loans have served as a fast and convenient means to cover unexpected expenses and emergencies.

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With the current situation our economy is facing, small businesses are struggling.  According to a business start-up source, small business failure rates for the first part of 2013 are at 85%.  This may sound discouraging, especially for those who intend to start a business on their own.

Unfortunately, even those entrepreneurs with the best intensions and education to back them, fall prey to hard economic times.  They may make business decisions that ultimately harm their company and/or their credit scores. Thus, these entrepreneurs turn to small business loans in order to stay afloat.

Entrepreneurs can turn to payday installment loan lenders. These lenders offer funding and financing for small businesses. If you have damaged credit and are on the verge of closing the doors of your business, payday installment loan lenders have business loans that are right for you and that fit your unique situation. Taking out a loan from a payday installment loan lender compared to a large bank has many benefits that will meet the urgent cash needs of your business.

Flexibility

Unlike traditional bank loans, taking out a business loan from a payday installment loan lender offers amazing flexibility that you won’t find with a larger credit institution that has strict and often impossible guidelines to follow. You can use the funds in any way you need it without a bank looking over your shoulder and dictating rules.  Furthermore, you have control over the loan because credit lines can be used at your discretion and timing.

Quick

In business, time is valuable. There are lots of purchases needed and bills to be paid. Unforeseen inconveniences can take place that can ultimately ruin a business unless the matter is immediately resolved. Every hour that passes that you fail to purchase the things needed for your business, you are losing money and customers. When you apply for a business loan with a bank, it can take a week or more to be approved. But with payday installment loans, you can be approved for a business loan and have the funds within 24-48 hours.

No Credit Check

Unlike most traditional lenders and banks, you need to have a good credit standing in order to be approved. This is why those with bad credit and poor credit scores turn to payday installment loan lenders because this is not a problem. When you take out a business loan with lenders of payday installment loan, no credit check is performed. So even with a bad credit and poor credit rating, you can be sure that you will be approved for the business loan.

Applying for business loans with a payday lender is a smart way to go about saving your business. There is no time wasted and you don’t have to put up collateral. You don’t need to put your valuables at risk in order to be approved of a business loan. Most of all, you can be approved despite having bad credit.

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Payday installment loans are short-term loans provided to help cash-strapped individuals. These loans are also known as emergency loans or instant cash loans that can provide quick cash with fast loan approval.

However, since payday installment loans are short-term loans, they must be paid back on the next payday, usually after two weeks. The problem with most borrowers of these loans is that they aren’t be able to fully pay back the loan when it is due, thus resulting in a default. These defaults often lead to borrowers paying for penalties and late fees.

Will Dobbie and Paige Marta Skiba of the RAND Corporation Economics Seminar in their presentation, analyzed the databases of two payday installment lenders, randomly selected, and found that the average delinquency rate of borrowers on their first loan was 10% for lender A and 23% for lender B, on the second loan. It’s common for borrowers to take out multiple loans; however, and when this happens the chances that they will default rises. The average default rate on all loans was 39% for lender A and 61% for lender B.

Many borrowers increase their chances of repaying by taking out smaller loans. Dobbie and Skiba reported that similar borrowers who $100 had a the rate of default between 7 and 8.4 percent. The researchers hypothesize that because of the high interest rates and unstable financial situation of borrowers, the chances of defaulting increases with loan size.

Payday installment loans are typically small in size, but if a borrower defaults, he can end up paying more in interest and penalties than the principal amount. To avoid this scenario, borrowers can take several steps to make sure they do not default on their payday installment loan(s).

1.    Provide your payday installment loan lender with a bank account number. Many lenders require borrowers to give checking or savings account numbers so the lender can deposit money into the account and then, when the loan comes due, withdraw from it. Even if the lender does not require this, it is a good idea to provide one as a backup plan in case you cannot repay the loan.

2.    Get overdraft protection for your checking account. After giving the payday lender a bank account number make sure the account is secured with overdraft protection. This means that if in case there is not enough money in the account to cover a charge, money from another account is automatically made available to cover the difference.

3.    Have a backup plan. Although you may have a primary means by which you intend to pay off your payday installment loan, having a backup plan is essential in case something goes wrong. Your back up plan may include a short-term loan from friends or family or even taking out a second payday installment loan from another lender.

4.    If you have other sources of income, pay as much as you can before the due date comes. Most payday installment loan companies allow borrowers to pay back the loan before the due date. In order to make sure that nothing goes wrong, pay back the loan as early as possible. If possible, pay in person rather than by mail to be certain the payment is received by the lender.

5.    Contest any assessed penalties. If a payday installment loan company attempts to assess fees or penalties that you did not agree to, this is violating the law and the lender is obligated to return the money to you. You may also consult an attorney about taking legal action against the company.

You can avoid penalties from increasing when in default with your payday installment loan payments by making sure that before applying for a loan, you assess your finances carefully to see if you can afford the payments. This is important to avoid problems arising in the future.

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