Network Profit – Infiweb http://infiweb.org/ Wed, 21 Sep 2022 10:00:56 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://infiweb.org/wp-content/uploads/2021/06/icon-1-150x150.png Network Profit – Infiweb http://infiweb.org/ 32 32 How to get fast cash loans in Australia? https://infiweb.org/how-to-get-fast-cash-loans-in-australia/ Wed, 21 Sep 2022 10:00:56 +0000 https://infiweb.org/how-to-get-fast-cash-loans-in-australia/ Payday loans are designed to get you out of trouble when you’re short on cash. Quick cash is available in the form of “payday loans,” short-term financial solutions typically suited to the time between paychecks. This article takes a look at which sites offer the best short term loan in Australia fast. Let’s dive. 1. […]]]>

Payday loans are designed to get you out of trouble when you’re short on cash. Quick cash is available in the form of “payday loans,” short-term financial solutions typically suited to the time between paychecks. This article takes a look at which sites offer the best short term loan in Australia fast. Let’s dive.

1. Gday Loans

On the Gday Loans platform, people who want to borrow money need only complete one application to get loans from top lenders. This online service introduces potential borrowers to the best Australian lenders, who can provide them with a loan of their choice at an interest rate of 199.43%.

Online applicants often get feedback on their loan application within three minutes. If you ever need cash fast, don’t consider visiting gdayloans.com.au to apply for a payday loan with reasonable rates and terms.

Advantages

  • Online application and approval can be done quickly
  • Same day payment
  • People can borrow from $300 to $10,000

The inconvenients

  • To get a loan, you have to live in Australia

2. Pronto Paydays – Best for Same Day Loans

The company Pronto Paydays, which provides people in need of fast cash, gets payday loans fast and quickly, making it a great emergency loan option.

If you’re considering a payday loan, make sure you understand how the loan works. Payday loans are usually small amounts that you have to pay back when you get your next paycheque. You may have to pay additional fees and interest.

Advantages

  • They quickly share essential information
  • Acceleration of audit and compliance procedures
  • Analytics help people understand how things work.
  • No security deposit is required.
  • Loan amount is based on borrowers income

The inconvenients

  • Exaggerated interest rates
  • Less client protection and less transparency

3. Viva Payday Loans

Viva Payday Loans, a reputable online lending platform in Australia, offers lenders the best payday loans up to $5,000 with considerate repayment plans from 16 days to one year. You can still get one of their great loan offers even if you get help from Centrelink or have a low credit score.

For loans under $2,000, Viva Payday Loans have a 20% setup fee. Meanwhile, loans over $2,000 have a setup fee of $400, which means the APR will be between 20% and 199.43%. Viva Payday Loans also charges a 4% fee each month.

Their application process is simple, and after accepting your application, you will need to sign the agreement form so that the money can be sent to your account immediately.

Advantages

  • You don’t need collateral to get their loans
  • The application process is simple
  • You can still borrow even if your credit score is low

The inconvenients

  • They come with high interest rates

4. Fair Go Finance small loan

Fair Go is another good online lending service that has been around for a while and has gained the trust of many Australians. It connects people who want to borrow money with lenders who can give them loans ranging from $300 to $2,000 over 24 months. Their repayment plan is based on your ability to pay, and there are no penalties for paying before the agreed time.

Fair Go doesn’t discriminate against its customers, so you’ll always get a loan that’s right for you even if you have bad credit. But the loans will cost you dearly to repay, so you need to think carefully before taking out one.

Also, they charge a 20% setup fee that you have to pay, mostly for loans from $18 to $400, and you have to pay their 4% monthly fee.

Advantages

  • It offers a repayment term of more than two years
  • Loans of up to $2,000 are available
  • They offer unsecured loans

The inconvenients

  • They charge a 4% fee every month
  • They charge an application fee of 20% on the amount of the first loan

5. Equitable financing

This online loan matching service connects borrowers with top Australian lenders who offer loans ranging from $300 to $2,000 with terms ranging from one to 24 months. Unlike many fintech companies, Fair Go Finance allows customers to prepay their loans without fees or penalties.

The best part is that this platform allows people with bad credit to get loans, but they will not be eligible for the 4% setup fee waiver. For loans between $18 and $400, there is a 4% fee each month.

Advantages

  • Loan amounts vary between $300 and $2,000
  • The platform sets the payment schedule based on how often the customer gets paid
  • No collateral needed

The inconvenients

  • High interest rates and fees
  • The loan comes with high interest rates and monthly fees

Conclusion

It is inevitable that at some point in your life, you will run into financial difficulties and need quick help. Quick loans can be helpful, but only if you go through the right steps. The payday loan options mentioned above are the go-to alternatives when you’re short on cash.

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Cash Advance Apps vs Payday Loans: Which is Better? https://infiweb.org/cash-advance-apps-vs-payday-loans-which-is-better-2/ Mon, 19 Sep 2022 00:00:00 +0000 https://infiweb.org/cash-advance-apps-vs-payday-loans-which-is-better-2/ (NerdWallet) – If you were asked to imagine a payday lender, you might think of a storefront in a strip mall with green dollar signs and neon slogans like “everyday payday “. You probably wouldn’t imagine a mobile app that advertises on TikTok and sports a colorful logo. But cash advance apps like Earnin and […]]]>

(NerdWallet) – If you were asked to imagine a payday lender, you might think of a storefront in a strip mall with green dollar signs and neon slogans like “everyday payday “. You probably wouldn’t imagine a mobile app that advertises on TikTok and sports a colorful logo.

But cash advance apps like Earnin and Dave provide advances with the same borrowing and repayment structure as payday lenders, and consumer advocates say they carry similar risks. Both are quick, no-credit-check options for closing an income gap or easing the pressure of inflation.

Neither is an ideal first choice for borrowing money quickly, but knowing their differences can help you save money and avoid hurting your finances.

Cash advance apps work like payday loans

Like most payday loans, a cash advance or paycheck app lets you borrow money without a credit check. You are also required to repay the advance, plus any fees you have agreed, on your next payday.

One payment cycle is usually not enough for borrowers to repay a payday loan, so many people fall into the habit of getting another loan to pay off the previous one, says Alex Horowitz, senior director of The Pew Charitable Trusts.

App users may find themselves in a similar cycle. A 2021 study by the Financial Health Network found that more than 70% of app users get back-to-back advances. The study doesn’t say why users re-borrow, but Horowitz says the behavior is particularly similar to payday loans.

“Direct-to-consumer payday advances share DNA with payday loans,” he says. “They’re structured the same, they have repeat borrowings, and they’re scheduled based on the borrower’s payday, which gives the lender strong collectability.”

Apps can offer more flexibility

Payday lenders and payday advance apps collect repayment directly from your bank account. If your account balance is too low when funds are withdrawn, you could incur overdraft fees, says Yasmin Farahi, senior policy adviser at the Center for Responsible Lending.

An application may try to avoid overcharging your account. Mia Alexander, Vice President of Customer Success at Dave, says the app reviews users’ bank accounts before withdrawing the refund. If the refund puts the balance close to zero or negative, the app may not withdraw the funds, she says.

However, apps typically include language in their user agreements that while they try not to overcharge your account, they aren’t liable if they do.

In states where payday loans are allowed, a payday lender is unlikely to offer a free, unsolicited payment extension, as some apps say. Some states require payday lenders to offer extended payment plans at no cost to troubled borrowers, but a 2021 report from the Consumer Financial Protection Bureau says some lenders are misrepresenting plans or not disclosing them.

Unlike payday lenders, the apps don’t make collection calls. If a user revokes access to their bank account to avoid a refund, the app will not attempt to collect the funds. The user simply cannot get another advance until they repay the previous one.

Payday loans cost more

Payday loans tend to have high mandatory fees, unlike apps. Instead, they charge a small fee that users can accept throughout the borrowing process. These fees can add up, but they are usually lower than those charged by payday lenders.

For example, an app might charge a monthly subscription fee or a fee for instant access to funds. Most cash advance apps also ask for a tip for service.

The charges on a $375 payday loan are most often about $55 over a two-week period, Horowitz says. Since the cash advance application fee is mostly optional, you can easily keep the cost below $10.

Earnin user Sharay Jefferson says she’s used payday loans in the past, but switched to a cash advance app because it’s a cheaper way to cover bills and unexpected expenses.

“If you get a $200 payday loan, you might be paying something back three times over,” she says. “With Earnin, I’m going to have to pay that $200 back, plus whatever I decide to give them. It’s much cheaper. »

Technically, apps are not lenders

Regulators like the CFPB have not classified payday advance apps as lenders, despite their similarities to payday loans.

Earnin CEO and Founder Ram Palaniappan says the app is more like a payroll service or an ATM because it makes it easier to access your own funds. Earnin asks users to upload a timesheet showing they worked enough hours to earn the cash advance amount. Other apps scan a user’s bank account for income and expenses to determine if they qualify for an advance.

Farahi says applications should be treated like creditors, meaning they would follow the Truth in Lending Act, which requires creditors to disclose an annual percentage rate. An APR allows consumers to compare costs between financing options. For example, users can compare the APR of a cash advance app to that of a credit card and choose the most affordable.

“People still need to know what the real cost of credit is and to be able to assess it and really compare that cost with other options,” she says.

Applications should also comply with applicable state lending laws. Currently, 18 states and Washington, DC, have maximum interest rate caps that could limit application fees, she says.

Cash Advance App vs Payday Loan: Which is Better?

If you’re in dire need of cash, you may have better alternatives than payday loans and advanced apps, Farahi says.

Local charities and nonprofits can provide basic food and clothing needs. A family or friend could lend you money at no additional cost. If you have a few hours to spare, a side gig could generate as much money as a typical payday loan or cash advance application.

If you have the choice between an app and a payday loan, the app is probably the best option because:

  • It is less expensive.
  • It may not trigger overdraft charges.
  • If you don’t pay it back, the app won’t send you to collections.

A cash advance from an app is unlikely to leave you in a better financial position, Farahi says. But it may be a little less likely than a payday loan to make things worse for you.

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Cash Advance Apps vs Payday Loans: Which is Better? | https://infiweb.org/cash-advance-apps-vs-payday-loans-which-is-better/ Mon, 12 Sep 2022 23:44:10 +0000 https://infiweb.org/cash-advance-apps-vs-payday-loans-which-is-better/ If you’re asked to imagine a payday lender, you might think of a storefront in a strip mall with green dollar signs and neon slogans like “everyday payday.” You probably wouldn’t imagine a mobile app that advertises on TikTok and sports a colorful logo. But cash advance apps like Earnin and Dave provide advances with […]]]>

If you’re asked to imagine a payday lender, you might think of a storefront in a strip mall with green dollar signs and neon slogans like “everyday payday.” You probably wouldn’t imagine a mobile app that advertises on TikTok and sports a colorful logo.

But cash advance apps like Earnin and Dave provide advances with the same borrowing and repayment structure as payday lenders, and consumer advocates say they carry similar risks. Both are quick, no-credit-check options for closing an income gap or easing the pressure of inflation.

Neither is an ideal first choice for borrowing money quickly, but knowing their differences can help you save money and avoid hurting your finances.

Cash advance apps work like payday loans

Like most payday loans, a cash advance or paycheck app lets you borrow money without a credit check. You are also required to repay the advance, plus any fees you have agreed, on your next payday.

One payment cycle is usually not enough for borrowers to repay a payday loan, so many people fall into the habit of getting another loan to pay off the previous one, says Alex Horowitz, senior director of The Pew Charitable Trusts.

App users may find themselves in a similar cycle. A 2021 study by the Financial Health Network found that more than 70% of app users get back-to-back advances. The study doesn’t say why users re-borrow, but Horowitz says the behavior is particularly similar to payday loans.

“Direct-to-consumer payday advances share DNA with payday loans,” he says. “They’re structured the same, they have repeat borrowings, and they’re scheduled based on the borrower’s payday, which gives the lender strong collectability.”

Apps can offer more flexibility

Payday lenders and payday advance apps collect repayment directly from your bank account. If your account balance is too low when funds are withdrawn, you could incur overdraft fees, says Yasmin Farahi, senior policy adviser at the Center for Responsible Lending.

An application may try to avoid overcharging your account. Mia Alexander, Vice President of Customer Success at Dave, says the app reviews users’ bank accounts before withdrawing the refund. If the refund puts the balance close to zero or negative, the app may not withdraw the funds, she says.

However, apps typically include language in their user agreements that while they try not to overcharge your account, they aren’t liable if they do.

In states where payday loans are allowed, a payday lender is unlikely to offer a free, unsolicited payment extension, as some apps say. Some states require payday lenders to offer extended payment plans at no cost to troubled borrowers, but a 2021 report from the Consumer Financial Protection Bureau says some lenders are misrepresenting plans or not disclosing them.

Unlike payday lenders, the apps don’t make collection calls. If a user revokes access to their bank account to avoid a refund, the app will not attempt to collect the funds. The user simply cannot get another advance until they repay the previous one.

Payday loans cost more

Payday loans tend to have high mandatory fees, unlike apps. Instead, they charge a small fee that users can accept throughout the borrowing process. These fees can add up, but they are usually lower than those charged by payday lenders.

For example, an app might charge a monthly subscription fee or a fee for instant access to funds. Most cash advance apps also ask for a tip for service.

The charges on a $375 payday loan are most often about $55 over a two-week period, Horowitz says. Since the cash advance application fee is mostly optional, you can easily keep the cost below $10.

Earnin user Sharay Jefferson says she’s used payday loans in the past, but switched to a cash advance app because it’s a cheaper way to cover bills and unexpected expenses.

“If you get a $200 payday loan, you might be paying something back three times over,” she says. “With Earnin, I’m going to have to pay that $200 back, plus whatever I decide to give them. It’s much cheaper. »

Technically, apps are not lenders

Regulators like the CFPB have not classified payday advance apps as lenders, despite their similarities to payday loans.

Earnin CEO and Founder Ram Palaniappan says the app is more like a payroll service or an ATM because it makes it easier to access your own funds. Earnin asks users to upload a timesheet showing they worked enough hours to earn the cash advance amount. Other apps scan a user’s bank account for income and expenses to determine if they qualify for an advance.

Farahi says applications should be treated like creditors, meaning they would follow the Truth in Lending Act, which requires creditors to disclose an annual percentage rate. An APR allows consumers to compare costs between financing options. For example, users can compare the APR of a cash advance app to that of a credit card and choose the most affordable.

“People still need to know what the real cost of credit is and to be able to assess it and really compare that cost to other options,” she says.

Applications should also comply with applicable state lending laws. Currently, 18 states and Washington, DC, have maximum interest rate caps that could limit application fees, she says.

Cash Advance App vs Payday Loan: Which is Better?

If you’re in dire need of cash, you may have better alternatives than payday loans and advanced apps, Farahi says.

Local charities and nonprofits can provide basic food and clothing needs. A family or friend could lend you money at no additional cost. If you have a few hours to spare, a side gig could generate as much money as a typical payday loan or cash advance application.

If you have the choice between an app and a payday loan, the app is probably the best option because:

  • It is less expensive.
  • It may not trigger overdraft charges.
  • If you don’t pay it back, the app won’t send you to collections.

A cash advance from an app is unlikely to leave you in a better financial position, Farahi says. But it may be a little less likely than a payday loan to make things worse for you.

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These loans should be avoided..? Do you know why? https://infiweb.org/these-loans-should-be-avoided-do-you-know-why/ Sat, 10 Sep 2022 12:03:01 +0000 https://infiweb.org/these-loans-should-be-avoided-do-you-know-why/ These loans should be avoided..!? Do you know why? Many people think they shouldn’t take out loans. But at the end of the month, we will be forced to take out loans. This will be inevitable in middle-class families earning a monthly salary. However, experts say they can avoid taking out some loans. Why do […]]]>
These loans should be avoided..!? Do you know why?

Many people think they shouldn’t take out loans. But at the end of the month, we will be forced to take out loans. This will be inevitable in middle-class families earning a monthly salary. However, experts say they can avoid taking out some loans. Why do we say to avoid only certain loans? What is the reason for this? Let’s see.
Payday loan:
It is impossible to avoid borrowing during the current period, but it is very important to avoid payday loans. In particular, these loans are taken by small entrepreneurs, small traders and those who have shops in the daily market as individuals. You have to buy it in the morning and pay in the evening. Interest on these types of loans can be very high. It should therefore be avoided.
Car title loan:
A car title loan is usually a high interest loan. You can donate your vehicle and get it back within a month with interest first. Usually the interest on these loans is high. The vehicle may be sold if payment is not made within the time limit.
Advance on credit card:
In order not to use credit cards unnecessarily, some people take credit card advances. After that, interest may continue to accrue as interest. The interest rate is very high. If you don’t pay it on time, the penalty is very high.Casino loan:
Such loans are very rare in India. However, these loans are loans that should be avoided. These loans are used to promote sports in foreign countries.
Pawnbroker:
Many people can have this experience. Usually we get such loans by pawning our jewelry. Failure to pay this debt on time may result in your property being auctioned off. This includes restricted loans of a lower amount for more expensive real estate in rural areas.

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As Labor Day turns 120, payday advances https://infiweb.org/as-labor-day-turns-120-payday-advances/ Mon, 05 Sep 2022 08:00:19 +0000 https://infiweb.org/as-labor-day-turns-120-payday-advances/ Labor Day became a statutory holiday in September 1882. Over the next 120 years, the very notion of work and the very composition of the workforce have changed dramatically. So are the ways and means by which we get our earned wages into our collective pockets and bank accounts. A nation of farmers By the […]]]>

Labor Day became a statutory holiday in September 1882.

Over the next 120 years, the very notion of work and the very composition of the workforce have changed dramatically. So are the ways and means by which we get our earned wages into our collective pockets and bank accounts.

A nation of farmers

By the end of the 19th century, about half of the American population was involved in agriculture.

Fast forward to today, and professional and business services remain the largest employment sector with about 22 million people, or about 13% of the workforce, according to data from the Bureau of Labor Statistics. . In fact, non-agricultural jobs make up about 92% of the labor force.

Along the way, as noted in a Federal Reserve story, wages were paid in cash, or in what we might think is a little, well, inventive (the study mentions that laborers are paid, in some cases, in pounds of tobacco).

The two-week pay cycle? Well, that traces its genesis back to the last century, the 1940s – a stable and reliable process that allows state and federal governments to collect taxes.

Now, real-time payments are looming and the gig economy is firmly embedded in the fabric of society. As recently as last year, according to Pew Research estimates, about 16% of the U.S. workforce had at least some experience earning money through indentured labor. In an inflationary environment, the opportunity and attraction is there to accept additional and flexible work to increase one’s income.

Flexible payments

Payments should also be flexible. PYMNTS research found that pay-as-you-go, or at least more frequent, options are favored by gig workers. In a recent interview, Tracy Monson, chief product officer of payout platform Onbe, told PYMNTS that “compensation is the number one thing that attracts gig workers and builds loyalty.”

But 41% of freelancers wait a month between paychecks, and 70% say they want to get paid quickly and more often.

Businesses are beginning to recognize that they need to meet these expectations. Around 75% of businesses now see faster payments as an essential service to offer, and around 90% believe they will be able to offer faster or instant digital payments within three years, as we have underlined here.

Elsewhere, Ingo Money CEO Drew Edwards told PYMNTS that “if work is now on demand, the worker must also be paid on demand – it must be an on demand equation of the beginning to end”.

He noted: “Doing the job and going home and then waiting to be paid next Saturday is not the way these workers think. In the world of gigs, this offer means you won’t attract the driver, web designer, or freelancer. »

There are a number of companies – including digital startups – that have raised capital and come to market with their own Earned Wage Access (EWA) products and services. In one example, Tartan raised $4.5 million to expand its payroll offerings, with EWA and salary-related loans in the mix. Additionally, PayPal has implemented pay-as-you-go for its employee roster.

The allure of having immediate access to pay as you work has obvious appeal beyond the gig economy, of course, but the landscape may be changing. . In late June, the Consumer Financial Protection Bureau (CFPB) terminated financial services provider Payactiv’s sandbox approval order for its EWA products.

The CFPB said at the time that it “had received requests” for clarification regarding its advisory opinion on EWA products. The office said it “plans to issue new guidance soon to further clarify the application of the definition of ‘credit’ under the Truth in Lending Act and Regulation Z.”

So the ways we earn our daily bread will continue to evolve.

aml/kyc

NEW PYMNTS SURVEY FINDS 3 IN 4 CONSUMERS HAVING HIGH DEMAND FOR SUPER APPS
About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.

We are always looking for partnership opportunities with innovators and disruptors.

Learn more


https://www.pymnts.com/news/retail/2022/transformation-of-victorias-secret-hindered-by-slow-consumer-spending/partial/

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The Better Business Bureau releases new study on predatory payday loans https://infiweb.org/the-better-business-bureau-releases-new-study-on-predatory-payday-loans/ Thu, 01 Sep 2022 23:32:00 +0000 https://infiweb.org/the-better-business-bureau-releases-new-study-on-predatory-payday-loans/ OMAHA, Neb. (WOWT) – A new study warns against predatory payday loans. According to a new investigation by the Better Business Bureau, predatory payday loan companies and scammers steal your information by tricking you into believing they know more about state laws than you do, by failing to explain the exact terms of the loan. […]]]>

OMAHA, Neb. (WOWT) – A new study warns against predatory payday loans.

According to a new investigation by the Better Business Bureau, predatory payday loan companies and scammers steal your information by tricking you into believing they know more about state laws than you do, by failing to explain the exact terms of the loan.

“I kept getting these texts and phone calls early in the morning or late at night,” says a Nebraska woman who wishes to remain anonymous. “When I finally spoke to them on the phone, all they wanted was my social security number.”

The BBB says this is a major red flag. And unfortunately, it has become an all too common scenario.

To add to the confusion, payday loan laws are managed state by state among the 32 states in which they are available. The BBB says a complex web of regulations makes the industry’s impact difficult to track.

“The main problem is that these loans carry three-digit interest rates,” says BBB Vice President of Communications and Public Relations Josh Planos. “And they are compounded by interest which is sometimes compounded weekly or monthly rather than annually.”

Here in Nebraska, lenders are prohibited from charging fees greater than $15 per $100 loan. Additionally, loans are limited to $500.

“I actually had a friend who had her identity stolen and then there was some financial stuff there, so I just got lucky and didn’t do any of that,” she says.

More recently, 6 News received an email from another woman expressing concern about a sender.

“I got the mail like I do every day, and I saw this postcard and it worried me a bit because it said First National Bank of Omaha, we’re calling to talk about your mortgage “, says this woman from Omaha who also wishes to remain anonymous. “He needs an immediate response, it’s urgent.”

The BBB confirms that this is another potential scam and one of the many ways fraudsters request and in some cases obtain your information.

“It’s something that absolutely affects your neighbor, your community here in Nebraska. It’s something to watch out for,” Planos says.

The BBB advises you not to hesitate to report a scam if you fall into the trap. They say the more people who know, the more likely others are to avoid being victimized.

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Short-term loans vs. bank overdraft fees – InsideSources https://infiweb.org/short-term-loans-vs-bank-overdraft-fees-insidesources/ Tue, 30 Aug 2022 23:30:14 +0000 https://infiweb.org/short-term-loans-vs-bank-overdraft-fees-insidesources/ Which is more expensive for low-credit consumers – the daily cost of a short-term loan or bank overdraft fees? The answer might surprise you. Short-term loans continue to receive a bad rap in American political discourse and are routinely viewed as predatory by lawmakers who believe they unfairly target low-income Americans. These lawmakers, both federal […]]]>

Which is more expensive for low-credit consumers – the daily cost of a short-term loan or bank overdraft fees? The answer might surprise you.

Short-term loans continue to receive a bad rap in American political discourse and are routinely viewed as predatory by lawmakers who believe they unfairly target low-income Americans. These lawmakers, both federal and state, argue that short-term lenders take advantage of vulnerable Americans by offering high-interest loans they cannot afford to repay. Therefore, they conclude that strong consumer protections are needed to limit these unsavory business practices. Strangely, these same legislators often have little to say about bank overdraft fees and a much greater burden on consumers.

Over the past decade, 19 states have passed laws and regulations imposing interest rate caps on small loans. Pressure for action at the federal level has also increased. Last year, several senators proposed legislation establishing a 36% annual rate cap on short-term loans, effectively banning all loans with an interest rate above 36%.

Such a proposal, if passed, would prove devastating to short-term lenders who rely on the ability to adjust interest rates to insulate them from high-risk consumers. Research suggests that high interest rates are often necessary to recoup the cost of delinquent loans and generate even the smallest profits. The loss of this flexibility has repeatedly led companies to exit the market in states like Illinois, where a 36% price cap has been established.

A national cap on interest rates would be even more detrimental to consumers. Indeed, the 12 million Americans, or 5.5% of the population, who use short-term loans tend to be unbanked or underbanked. These Americans do not have access to credit at traditional financial institutions or have limited access to borrowing from other lenders. In both cases, these Americans rely on other forms of credit available to them only through short-term lenders.

Therefore, an arbitrary 36% annual percentage rate cap would have a negative effect on these Americans.

Unlike the strict regulations imposed on short-term lenders, many large banks face few restrictions on the practice of generating profits from overdraft fees. Overdraft fees, which the bank charges customers who withdraw more money from their accounts than they have, are an important source of revenue for banks. According to the Consumer Financial Protection Bureau, overdraft fees and insufficient fee income account for “nearly two-thirds of reported fee income.” In 2021, consumers paid over $8 billion in overdraft fees.

Unfortunately, according to the Federal Reserve, these revenues are frequently collected from Americans who are more likely to be “low-income adults, less-educated adults, and black and Hispanic adults.” In fact, a CFPB study found that “8% of customers bear nearly 75% of all overdraft fees,” meaning that Americans who can least afford to make such payments are responsible for a disproportionate share of overdrafts.

A brief comparison between a typical short-term loan and standard overdraft fees illustrates the absurdity of focusing on strict rate caps for payday lenders while banks continue to charge high overdraft fees.

For example, an annual percentage rate cap of 36% applied to a two-week loan on $200 equates to a consumption charge of only 0.6% per day for the loan. In contrast, a number of major banks charge an overdraft fee of $36, which translates to an effective one-day rate of 18%. To summarize, we see a short term loan with an annual percentage rate of 36% and bank overdraft fees with an annual percentage rate of 915%.

This example demonstrates the huge disparity in accumulated profits between a typical short-term loan and a standard overdraft fee. Yet lawmakers seem determined to apply disproportionate scrutiny to payday lenders and deny high-risk consumers access to short-term credit.

Indeed, according to a 2016 report by polling firm Tarrance Group, 96% of borrowers said “the personal loans they took out were helpful to them personally.” Additionally, a 2020 Morning Consult survey found that a strong majority of Americans think “the amount lenders should be able to charge for a $100 loan over two weeks” should exceed the 36% cap proposed by the Congress.

The reality is that payday lenders are providing unbanked and underbanked Americans with a valuable service, and lawmakers are threatening to take it away. Americans who would otherwise not be eligible to receive a line of credit, many of whom are low-income and of color, can do so with a small dollar loan. That small loan can be all that keeps a family from paying next month’s rent or being evicted.

Lawmakers should resist the urge to impose caps on payday loans, which will only punish the people the law in question was designed to help. Such a regressive law would almost certainly drive consumers to seek out alternative, much riskier forms of credit, such as those available from loan sharks and shady pawnbrokers.

Instead, lawmakers should focus on the big banks that continue to enrich themselves at the expense of their poorest customers. It is overdraft fees, not payday loans, that penalize low-income Americans for not having enough money in their bank accounts. And it’s overdraft fees that keep people away from banking.

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Inside the Rise of Expensive Pawnbrokers – and Affordable Alternatives https://infiweb.org/inside-the-rise-of-expensive-pawnbrokers-and-affordable-alternatives/ Sat, 27 Aug 2022 22:36:14 +0000 https://infiweb.org/inside-the-rise-of-expensive-pawnbrokers-and-affordable-alternatives/ IF money is tight, you may have considered pawning something valuable. It can be jewelry, a watch or a handbag. 1 We investigate pawnbrokers and provide advice on affordable alternatives The cost of living crisis has seen a boom in pawnbroking – where money is made available in exchange for something of value which, if […]]]>

IF money is tight, you may have considered pawning something valuable.

It can be jewelry, a watch or a handbag.

1

We investigate pawnbrokers and provide advice on affordable alternatives

The cost of living crisis has seen a boom in pawnbroking – where money is made available in exchange for something of value which, if repayment is not met, can be sold.

But experts warn that loans are expensive, and if you can’t repay the debt, you could lose something of sentimental value.

This week, Sun Money investigates these loans and provides advice on affordable alternatives.

EXPENSIVE RATES

YOU could end up paying back hundreds of pounds in interest. Three of the UK’s largest pawnbrokers, Cash Converters, Ramsdens and H&T, charge between 118.8% and 119.9% ​​annually.

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This means that if you take out a loan of £500 over six months, you will have to repay £299 in interest or £799 in total, at a rate of 119.9%.

The loans are much more expensive than those from the big banks, but cheaper than payday loans.

Many quote a monthly or daily interest rate, but they must also state the annual rate.

Often you can only borrow a percentage of an item. For example, if your ring was worth £200, you might only be able to borrow £100. Sometimes you have to repay the loan in one installment.

A spokesperson for H&T said: “We serve customers who are unable to raise funds in the traditional bank credit system, or who need a low value short-term loan to meet a need immediate funding.”

AFFORDABILITY FEARS

Pawnbrokers do not perform credit checks. This can be an advantage if you have bad credit, but it means there is no collateral to ensure you can afford the loan.

Debt adviser Sara Williams, of Debt Camel, said: ‘Some people find they repurchase an item, but it has left them so strapped for money that they have to pawn it again in a few weeks.

“A one-time convenience can turn into a long-lasting nightmare, especially if you pawn jewelry with sentimental value.”

A spokesman for the Financial Conduct Authority said: ‘We have reformed the market to help borrowers avoid getting into debt and have been clear with lenders about the need to support customers in times of difficulty.

“We will take action if companies fail to meet their obligations.”

IF YOU DO NOT REPAY THE LOAN

If you repay on time, you can get the pawned item back. But you must keep the receipt.

If you lose it and the item is over £75, you will have to pay a fee to have a magistrate or commissioner for oaths swear the goods are yours. If you can’t repay the loan, the item is sold.

James Daley of Fairer Finance said: ‘Avoid pawning any item with high sentimental value unless you are confident in your ability to repay.

If your item is resold, you should receive any extra money the pawnbroker receives – on top of what was offered to you.

James adds: “In the past, pawnbrokers have failed to reunite customers with this extra money.

“So if you’re pawning something and it’s sold, check how much it sold for and find out what money is owed to you.”

AFFORDABLE ALTERNATIVES

If you need to borrow money, consider other options. Remember that emergency credit should only be used in extreme circumstances, such as to pay a priority bill or if your car breaks down.

If you have a low income or bad credit, you may find it difficult to qualify for the higher loan rates. This is why affordable alternatives are important.

First, try to get some free money in the form of grants. If you are on benefits, talk to your work coach about the Household Support Fund. Or ask your local council if they can help you.

Or Jane Tully of MoneyAdviceTrust, suggests, “Credit unions often offer a range of affordable products at cheaper rates and there’s a cap on how much interest they can charge.”

If you’re having trouble paying a bill, talk to your provider.

Use Turn2Us to search for grants or talk to End Furniture Poverty, if you need furniture or a new fridge-freezer, for example.

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Responsible lenders like Fair For You offer lower-cost loans to help you buy home essentials. Iceland is giving interest-free micro-loans of £75, in the form of a pre-loaded card to spend at the supermarket.

You can seek free debt advice from Citizens Advice, StepChange or National Debtline.

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Court grants summary judgment in lawsuit against payday lender https://infiweb.org/court-grants-summary-judgment-in-lawsuit-against-payday-lender/ Fri, 26 Aug 2022 13:41:15 +0000 https://infiweb.org/court-grants-summary-judgment-in-lawsuit-against-payday-lender/ On August 23, a municipal court in Ohio granted a defendant’s motion for summary judgment in a case involving a payday loan. According to the order, the plaintiff’s complaint alleged that the defendant, in April 2019, signed a line of credit and security agreement with a lender in the amount of $1,101 and agreed to […]]]>

On August 23, a municipal court in Ohio granted a defendant’s motion for summary judgment in a case involving a payday loan. According to the order, the plaintiff’s complaint alleged that the defendant, in April 2019, signed a line of credit and security agreement with a lender in the amount of $1,101 and agreed to repay the amounts advanced within a 30 day billing cycle subject to some fees and an interest rate of 24.99%. The complaint further alleged that the defendant failed to make the payment on time and that subsequently the plaintiff, as assignee of the lender, sought to enforce the agreement. In its response, the defendant denied having entered into such an agreement and referred to the transaction as a “loan of $500”, claiming that this matter “involved an illegal scheme by [the short-term cash lender, the mortgage lender, and the plaintiff] to issue and collect illegal payday loans as part of a scheme to attempt to evade compliance with new state loan laws. Plaintiff brought counterclaims for violation of the Short Term Loan Act, Mortgage Act, Ohio Consumer Sales Practices Act, and civil conspiracy.

On a motion for summary judgment, the defendant argued that it was entitled to judgment on “plaintiff’s complaint because the parties’ April 2019 agreement” is void because it was entered into in violation of the Ohio Lending and Consumer Laws. “The defendant made two arguments: (i) the lender is not permitted under the Short-Term Loans Act to issue a loan of less than $1,000; and (ii) the lender is “prohibited from engage in any act or practice intended to circumvent the prohibition on registrants under the Mortgage Loans Act from making loans of $1,000 or less or for terms of one year or less.”

In entering summary judgment for the defendant, the court found that the underlying transaction was a “plain language indefinite loan” of the Mortgage Act, and that it was not a loan of $1,000 or less or for a term of one year or less under the Mortgage Loans Act, but by using the framework of the security agreement, the lender has committed an act or practice to evade the prohibition of the Mortgage Loans Act. The court found that the evidence showed that the defendant approached the lender for a simple loan of less than $1,000 and received a check for $501 that day. The court further concluded that “it would appear [the lender] gave the defendant what she was looking for, namely a short-term loan… but without complying with any of the myriad restrictions applicable to such loans under the Short-Term Loans Act. The court held that the framework of the security agreement was invalid because the “legally convoluted” structure did not benefit the parties in any meaningful way, and “the only explanation the Court can discern as to why which this structure was used is that it was a ploy”. for evading the restrictions of the law on short-term loans which would otherwise have applied to the parties’ transaction. »

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CFPB Sues Payday Lender for CFPA Violation | PC Weiner Brodsky Kider https://infiweb.org/cfpb-sues-payday-lender-for-cfpa-violation-pc-weiner-brodsky-kider/ Thu, 25 Aug 2022 18:23:55 +0000 https://infiweb.org/cfpb-sues-payday-lender-for-cfpa-violation-pc-weiner-brodsky-kider/ The CFPB recently filed a lawsuit against a Texas-based payday lender in Texas federal court alleging that the lender engaged in unfair, deceptive, and abusive practices by concealing free repayment plan options from eligible borrowers and initiating unauthorized withdrawals from consumer debit cards in violation of the Consumer Financial Protection Act of 2010 (CFPA). According […]]]>

The CFPB recently filed a lawsuit against a Texas-based payday lender in Texas federal court alleging that the lender engaged in unfair, deceptive, and abusive practices by concealing free repayment plan options from eligible borrowers and initiating unauthorized withdrawals from consumer debit cards in violation of the Consumer Financial Protection Act of 2010 (CFPA).

According to the CFPB complaint, the lender is required by its national trade association to offer free repayment plans that would allow borrowers to repay their outstanding balance in four equal installments over four pay periods without having to pay any fees or charges. additional interest. However, rather than informing borrowers of their right to these repayment options, the lender instead encouraged borrowers to re-borrow from the lender by refinancing their loans. Since 2014, this practice has resulted in borrowers paying more than $240 million in refinance fees while eligible for the free repayment plan.

In addition to the lender’s failure to alert borrowers to the availability of these repayment plans, the lender also attempted to collect loan repayment by making unauthorized withdrawals from consumers’ debit accounts. Once discovered, the lender claimed to have repaid all the money raised through unauthorized withdrawals dating back to January 1, 2018. However, the lender was unable to prove to Bureau examiners that any of the $1.3 million in unauthorized withdrawals was repaid to one of 3,000 affected borrowers.

This complaint follows a 2014 consent order against the same lender regarding alleged practices that also violated the CFPA when the lender encouraged consumers who could not repay their current loans to take out new loans, including additional fees. As a result of the consent order, the lender was ordered to pay $5 million to affected consumers as well as a $5 million fine.

The CFPB is seeking a permanent injunction against the lender, civil monetary penalties, attorneys’ fees, and any relief necessary to repair the harm caused to consumers.

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