Payday Loan Lowdown

Money, money and money. Everyone needs that. Whenever you run out of money, you feel the definite need of some extra cash. If there is a reliable way of getting some fast cash, then it is a payday loan. Whenever there is a special occasion or you get an unprecedented high bill, you can get a payday loan to save yourself from further trouble.

Payday loans can be availed by anyone who is over 18 and has a stable job. Getting a payday loan is not a difficult task. However, the problem occurs when it comes to the point of making the best choice. It is always difficult to find the right lender when you have many options to choose from. While choosing a payday loan provider, don’t forget to consider the disadvantages along with the advantages. This is very important while making a final decision.

There are certain fees that must be paid while opting for a payday loan. The fees vary in most cases. You must do your homework before you take one. Don’t rush and make mistakes, which will give you no chance to regret later. The most important point to remember here is the longer you keep the money, the more fees you will have to pay.

You can get online consultations or take the opinion from your friends if they have already borrowed money. That will be a great help for you to make the right choice. Try to get as much information as you can about payday loan. Otherwise, you may be at risk.

Credit Unions are finally taking on from where payday loans left off. But they are definitely trying to make it easier for customers. In Virginia, credit unions like Langley Federal, which serves about 142,000 members - about half of them military - offers a low-cost loan designed to counter payday lending. Then there is 1st Advantage Federal Credit Union, which has a large membership contingent that’s connected to the Army, rolled out a similar product.

Representatives of the credit unions are confident that since these low-interest loans are now available, they will make payday loans unnecessary. And borrowers may find their options for quick, short-term, high-cost loans limited in the near future anyway. Payday lenders are coming under scrutiny from legislators nationally and in Virginia because of the fees they charge. Dailypress.com reports:

State Del. Harvey Morgan, R-Gloucester, has repeatedly expressed regret for penning legislation that opened the door for the lenders in the state in 2002, and he serves on a committee examining ways to force payday loan firms to curb their activities, such as by limiting the number of payday loans anyone could have at one time.

Read more: Consider alternatives to skirt payday-loan trap

Credit unions have been reporting a disturbing trend lately: Thousands of credit union customers were turning to payday outlets for small loans to be repaid with their next paychecks. To counter this problem, the Filene Research Institute is working with credit unions in Ohio, Maryland and Wisconsin to design alternative loans and will expand into 10 more states next year. Usatoday.com reports:

It is also encouraging credit unions to offer check cashing, international wire transfer and other services now offered by high-cost firms, along with credit counseling. "Payday lenders stepped in and built a niche very nicely, but very expensively," says Lois Kitsch of the Filene Research Institute. "Credit unions have a very difficult time … because they have a very real problem lending to get people from paycheck to paycheck."

Read more: Breaking the cycle of payday loan ‘trap’

Payday loans are a painful reality. It helps if you have one around but they can also cause your destruction if you are not careful. In other words, a payday loan is the proverbial double-edged sword. It is a fact of life in America today that we don’t have enough money to meet our needs. And while regular folks like you and me are affected, it becomes a problem with national dimensions when it involves our soldiers.

Since it has become such a problem among the armed forces, the federal government is looking at ways to protect soldiers from payday loans. So, is there a way in which we can get the benefits of a payday loan without the problems associated with it? There is one solution that has been around for quite some time now but has not received the attention it should: credit unions. Rdunews14.com reports:

Fort Bragg Federal and Pentagon Federal Credit Union offer ARK loans, which stands for Asset Recovery Kit. It’s a no-interest loan of up to $500, and there’s a one-time $6 fee. If someone takes out more than one loan, they have to go to credit counseling.

Read more: Credit unions offer payday loan alternative

You probably have your reasons for using payday loans — your paycheck is not enough to cover all your expenses, or you require some money for an immediate purpose and don’t have enough liquid cash…. The reasons are numerous but the result is usually the same. You take a payday loan for two weeks, are unable to pay off the money at the end of the term, extend the term for some more time and before you know it, your debt burden is threatening to bankrupt you. I have painted a scary but real picture of what you can expect if you take a payday loan. So, what other alternative do you have in case you need some ready cash? I have suggested below a few alternatives that could help you tide over your financial problems:

Company Advance: Some companies and employers grant paycheck advances to employees. Since the amount you are given is an advance against your salary and not a loan, you don’t have to worry about interest. This makes it a whole lot cheaper than payday loans.

Community Groups. You may not know this but there are quite a few faith-based groups and community organizations that provide emergency assistance. This is done either directly or through social services programs.

Credit Cards: Ever tried getting a cash advance on your credit card? If you haven’t done it yet, try out this method. These advances are offered at about 30 percent APR and are much cheaper than getting a payday loan. Then there are credit union loans, which are short-term loans. Since the topic of credit union loans deserves a little more space, we will return to the topic again.

Three cheers for Oregon Governor Kulongoski who recently announced a new consumer campaign — including a 1-800 hotline and web site — promoting payday loan alternatives and encouraging working Oregonians to avoid these high-interest loans. These new tools are expected to help people realize that there are better alternatives for consumers than payday loans charging up to 500 percent interest. Salem-news.com reports:

By calling 1-800-SAFENET or visiting www.211info.org, consumers can find information about payday loan products offered by Oregon credit unions with significantly lower interest rates and fees. The website and 1-800 number can match consumers with credit unions they are eligible to join that offer the payday loan alternatives.

Read more: Oregon Introduces Hotline And Website Promoting Payday Loan Alternative

If you have ever defaulted on the payment of your credit card debt, you will know that a typical payday loan is more expensive than a credit card late fee. And yet, people queue up to get money from businesses that are out to squeeze them dry of their last dollar. If you are ready to forego of payday loans and use viable alternatives, then look at this list.

One of the alternatives involves taking an advance from your employer. Ask your company. Your employer may grant paycheck advances to employees. And since this is an actual advance on your salary and not a loan, you can forget about interest rates. However, if you are faced with a serious debt problem, you could directly speak with your creditors. Quite a few creditors agree to negotiate partial payments if a payment plan is in place. And if you are in serious trouble, there are the credit counseling agencies that can help you work out a debt repayment plan with your creditors.

Payday loans form a vicious cycle of loan and debt and getting out of this cycle is extremely difficult. Most American families are today living paycheck to paycheck, and most don’t have much savings or even conventional credit like a credit card, etc. This makes it extremely difficult for such people to handle any unexpected expense. At a time like this, a payday loan seems like your best friend at a time like that.

However, when it is payback time, you realize that this was not the friend you thought it was. The main reason is that the money from the first loan is taken from your next paycheck. This means you have less income than you are used to. So, you are behind on your usual expenses and what do you do to make up for this shortfall? Get another loan or renew your current loan. Rocklintoday.com reports:

Don’t look for a consolidation loan or program before you first figure out how you can start to live on what you earn, and then begin to save money. Help is available for you and others who are trapped in this circle.

Read more: Save, budget to defeat payday-loan cycle

Let me warn you right off that this solution to avoiding payday loans will work only if you believe in it and agree to follow the rules judiciously. Most people just scoff at the idea and don’t even bother to try it out. So, if you really want to know the benefits of this method, then you just have to try it out. It’s called piggybanking. Simply put, it’s trying to save money using the age-old method that children employ to save. All you need to do is invest a little money in a good piggybank. Try buying one of those with a lock and key. That way, even if you are tempted to take the money, you will be able to desist from that urge. If you are still with me, then let’s take up the rules.

This system requires a little discipline of you. You have to maintain a bank, so you need ledgers and make entries in it regularly. You have to note how much money you have put into the bank, and in case you withdraw, write down the exact amount and also try to return the money at the earliest possible.

Payday loans are a difficult proposition with people in financial difficulties. You cannot do without them and yet, you’d rather be without their cutthroat rates. So how do you reconcile to this situation? If you live in Hampton Virginia, then you could probably check this option out. News has it that the $1 billion Langley Federal Credit Union, based in Hampton Virginia, recently developed a low-cost payday loan alternative. This alternative is supposed to have netted its members over $230,000 in savings, according to the Credit Union Times.

Called QuickCash, this alternative offers members emergency loans at a fraction of the cost of a traditional payday loan. So, if a two week loan of $500 from a traditional padyay lender costs you more than $75 to borrow, QuickCash, offers the same product at just 18%, or a little over $3.00 for the same loan. Langley FCU uses a common bond field of membership, offering this product to specific businesses, organizations and associations in the Hampton area.