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Category Archives: Finance

Eliminate Your Debts

Arrange Your Funds

With list in hand, set aside enough money to cover the minimum payments on each debt. With the funds you have remaining, apply an additional payment amount to the debt that is on the top of your list, in other words, make two payments. If the minimum payment is too steep and you do not have enough funds for making an additional payment, move down your list to debt that you can afford to make an additional payment on.

Yes, you could go ahead and apply your remaining funds to the remaining balance on the debt that you have on the top of your list, however, our goal is to pay off your debts, not pay them down. This will all become clearer a little later on.

Set’ em Up and Knock’ em Down

Once you have started this plan, keep going until you have the first debt completely paid off. When it is gone, you can take the money from that payment you no longer have and apply it to the next debt on your list. If you had to skip the top debt, go back and see if you now have enough to be able to make two payments. Continue paying off your debts in this manner until you have completely cleared your list. Before long, you will have accomplished what you initially thought would be impossible, you have eliminated your debts.

Does this plan sound familiar? It is commonly referred to as the “debt snowball”. No, I am not saying this little slice of genius is my creation. I am simply saying that it is the best way to eliminate your debts without causing, even more, financial hardships. Just keep in mind that if you are having a hard time making even the minimum payments, you will have to either find an extra source of income to initiate this plan, or look for financial counseling to help via alternative methods.

Payday Loan Refund

Customers may seek compensation or a refund for a number of reasons. According to research studies, about 30{027029bb0feba75e6e16221d1a5c09932809a67c2c2ea549246a2dc0611c67c4} complaints are about lenders who take out money via a recurring payment. About 20{027029bb0feba75e6e16221d1a5c09932809a67c2c2ea549246a2dc0611c67c4} customers filed complaints that fraudulent loans were taken out in their names. Below are some of the common reasons you may file a complaint about a payday loan lender.

Fraudulent loans

Lenders have to verify a customer’s identity before issuing loans. Unfortunately, the verification is not done very carefully. As a result, many customers end up filing cases that loans were taken out in their names. If this has happened to you, contact the lender right away. If they don’t seem to help you, go to the Financial Ombudsman Service.

Harassment

As far as calls or text messages goes, it is difficult to decide what is considered harassment. Lenders are not supposed to make a call or send you a message after 8pm; however, if they do, you can sue them.

Recurring payments

Typically, the collection of payday loan repayments is done through CPA. It authorizes the lender to make a request for money to your bank. But they are meant to spell it out as well as explain the way you can go about canceling payday loans. Besides, they let you know prior to taking money out. Here it is important to note that some lenders keep trying all day long if the money is not deposited in their account in the morning, which means you, the customer, may be charged a good amount of money.

Unclear Repayment amount

Make sure the repayment amount is clearly mentioned on the lender’s website. On some lenders’ sites, you can find sliding scales that you can use to know the total cost of your loan. You can go for a refund if the repayment amount is not clear.

Your financial situation

Lenders consider a lot of factors, such as your age, employment, mental health, income, credit history and income before giving money out. If they have not done the checks and you can’t afford the repayments, you ask for a refund.

Hire Debt Collection Experts

When the business is developing, it will be better to have a debt collection firm for determining bad debt issues. This is because these professional have the appropriate labor and assets (and even equipments) to focus on the collection of your business. Meanwhile, you can boost the utilization of your own assets to proceed with your business operations and productions. It spares you time and cash on as the debt collection company can help for nominal charges, wiping out the need to pay separate individuals who will simply see on collecting debt from your clients.

The method of debt collection from clients varies from business to business. Some would hold up between 90 to around 120 days while others keep waiting for a year. Do remember that the longer you wait, the lower will be the chances of debt collection.

A business may encounter such clients who will not respond to the first notice. Often these clients do not react as they mostly do not have the ability to pay or they do not have any intention of paying. There will additionally be times when clients simply don’t respond as they just wish to pay whenever it is convenient for them. An alternate issue of businesses is that the clients change their addresses without prior notice. It simply becomes difficult for businesses to find such people.

Then there will be clients who complain a lot. They are quite difficult to manage and more often, they even deplete assets and time. There are additionally clients who just deny obligation regarding a request they have made. These things indicate the more losses of business.

Drowning In Debt

Lesser are the loans to service

As you would have experienced, keeping track of several loans and trying to pay various bills by the due date is a tedious affair. Even when you have to ability to service all your debts, it is easy to miss payments when the number is large. And within no time it can balloon into a gigantic problem. When you consolidate all your debts into one or two, you get a much better perspective of your financial picture and your debt problems appear much less alarming.

Lesser is the interest outflow

Different debts carry different rates. Also, there is the additional penal interest whenever you default. When you take a single loan to pay off multiple debts, the interest payout on this new loan is almost surely lower than the sum total of interests on many individuals loans. This is a double bonanza. One, your monthly payout reduces. Two, lesser payout means more money in hand, which can be helpful in accelerating your debt reduction. So within a short period of time you will see a rapid decline in your liabilities.

Lesser is the time pressure

One of the key aspects of too many debts is too many missed payments. Naturally, therefore, you are under immense pressure of these numerous unpaid bills. And, despite your good intentions, you may have no means to pay them all off at one go. What if you get an opportunity to repay the overdue amount in instalments? Combining debts comes to your rescue by staggering these outstanding payments over a longer time frame. With the pressure off, you start rebuilding your life with a lot more peace of mind.

Lesser is the harassment

Many debts means many forgotten bills. And many unpaid debts means many unhappy lenders. Many unhappy lenders means many foreclosure notices and many threatening phone calls. One or two creditors, post consolidation, means lesser chances of not remembering your due dates. No delays means no more harassment.

Going Debt Free

In regards to challenging your every belief, it is a fact of the modern financial system that loans generally incur higher interest rates. For example, let’s say Ford Motor Company goes to your bank. The company pays interest that is a fraction over the prime rate, which is the lowest rate banks charge their favorite customers. You, for sure, are paying several points over the prime.

You may not be able to change the fact the bank gives Ford a better interest rate than it gives you. But you can control, to some degree, the interest rate you pay based on the amount of money you borrow.

Look at the interest schedules on your credit card bills. You will see information that tells you something like this: On the balance up to $2,000, the finance charge is 18 percent annually, while on the balance over $2,000, you pay 12 percent. Remember, these numbers are generalized.

You may owe $2,000 or more in credit card bills, but if that debt is spread over several cards with low but lingering balances, you are paying the 18 percent on every penny. And if you pay the minimum amount due to each creditor every month, you will carry 18 percent until all balances go to zero.

Mastering a debt free plan can be achieved by strategically refinancing your debt. In fact, you can renegotiate and finance smaller loans as well as larger ones. However, be careful. Make sure you can benefit from the refinancing before you renegotiate.

Suppose you have an auto loan at 10 percent, and your bank is willing to lend you the money to pay it off at 7 percent. Sounds like a good deal, right? Well, maybe. If a big part of the loan has been paid off, refinancing may not be worthwhile because the new debt is usually paid off over a longer period of time and will ultimately cost more.

Hiring Debt Collector

Every state has its own regulations that cover how debt collection is done and how the agencies work. It is important to ensure that you select a firm that adheres to Fair Debt Collection Practices Act. Moreover, the firm should be bonded and licensed to work in the locality.

Sometimes the firms use very uncouth means to collect the debts. This may raise legal cases if the debtor feels that the agency has acted in bad faith. The insurance ensures that you are not held liable for hiring the agency to collect the debts. Ensure you pick a firm that has a valid errors and omission insurance. It will act as your protection if you are dragged to court.

Once you have a list of a few companies, take time to compare their costs. Different agencies use different formulas to come up with their rates. Some charge a small flat rate mostly associated with pre-collection activities. You are then charged a contingency fee that is part of the amount collected. The charge is about 20{027029bb0feba75e6e16221d1a5c09932809a67c2c2ea549246a2dc0611c67c4} to 30{027029bb0feba75e6e16221d1a5c09932809a67c2c2ea549246a2dc0611c67c4} of the amount collected. Pick a company that offers a no collection no fee model.

Some debtors tend to run away with your cash and ignore your calls. Some even skip town. If this is your situation, ask if the agency you are using has a skip tracing service. This service enables the debt collector track the defaulting client even when they have not left any forwarding address.

Just remember that you shall not receive all the cash once you have hired a debt collection agency. For this reason, it is advisable to exhaust all of the other means of collecting debt before asking for help. However, if none of the other methods work, hire a firm that will collect the debts right away.

Some Benefits of Payday Loans

No Strict Qualifications

Payday loans are easy to qualify for. Even if you have a bad credit score, you can qualify. All you need to do is let the loan provider know that you have a job and that you make enough money each month to pay back the loan. If you meet these qualifications, the provider will grant the loan. On the other hand, other types of loan require a lot of time consuming background checks before you get access to the loan amount. In some cases, the background checks take weeks to complete. As a result, you have to wait for a few weeks before getting the funds in your account.

No Cash Advance Limits

If you can get a payday loan, what you can do is get cash quickly that you can spend on whatever you want. On the other hand, with a credit card, the bank won’t allow you to get the cash and spend it on whatever you want. You can use the credit card online; however, if you get the cash, you will be charged a very high rate of interest. Moreover, you can’t get the same amount in cash that you can spend to buy stuff online. For instance, with some cards that have an online spending limit of $10,000, you can only get $2,000 in cash through an ATM machine.

Flexibility

Flexibility of a payday loan is another advantage that you can get. You won’t have any restriction as to where you can spend the money. On the other hand, with other kinds of credit, you have some restrictions to consider. For instance, if you go for a car loan or mortgage, you can only spend it on a car or a house. You can’t spend that money to buy other things you may need to do your routine work. You are bound to spend the money on either a house or a car.

Avoid Credit Card Fraud

Keep your card safe – It is very important that you keep your cards safe and away from the reach of other people. Place your cards in a bag or wallet close to your body so that it cannot be easily snatched away. If you use a purse, make sure that it is properly zipped so that the cards do not fall off from your purse. Also, instead of carrying all your debit and credit cards with you all the time only carry those that you need.

Be cautious when using your card online – When you use your card to shop online, be careful and make sure that you only use it on websites that are legitimate and offer SSL encryption security for online payments. If the site does not provide adequate security, your card information can be stolen and the same can be used for identity theft or for making fraudulent transactions with your card.

Keep a track of your account – Opt for mobile and email alerts to keep a track of your credit card account all the time. In case of any unauthorized usage of your card you can report it to the bank immediately. You can also access your account online through electronic banking and make sure that you are aware of all the transactions made with your card.

Keep your PIN safe – When you swipe your card at merchant outlets to make payments, you will need to provide a 4 or 6 digit Personal Identification Number (PIN) to authorize the transaction. Make sure that you do not share your PIN with anyone or write it on any piece of paper as it can be stolen and misused.

Shred your statements and other documents – Shred your credit card statements and all other documents that have your card information on them. Your account information can be accessed online and all other details will be available on your card. Even if you forget your password, user ID or PIN you can get them reset by contacting the customer support team of your bank. Hence, it is important that you shred all possible documents that include information about your card.

Inform the bank if your card is lost or stolen – In case your card is lost or stolen, call the card issuing bank immediately and inform them about the same. The customer support representative of your bank will then guide to you to get the card blocked so any unauthorized usage of your card can be avoided. The representative will also inform you about the steps you need to follow to get a new card.

High Rate Loans

Here are the reasons:

  1. As a business model, it is proven to be resilient and profitable. Diverse portfolio, small exposure, short term nature of the loan and catering to a sector few traditional lenders touch.
  2. With Americans’ incomes not keeping pace with inflation, and increasing illegal immigration, there is growing need for Payday type loans as more and more people live from paycheck to paycheck.
  3. While there is State level regulation on Payday practices, this form of lending is highly unregulated and as yet unchecked in any real form by Federal government. And State supervision is spotty. So no wonder new Payday type lenders are cropping up all over.
  4. Because of small loans and not much oversight, entry barriers are low.

PROS AND CONS

Pros:

  1. Easy terms, no collateral
  2. Negative credit history is not an obstacle
  3. Very local
  4. Caters to a segment of population which has no other alternatives to cover their expenditures or budgets

Cons:

  1. Very high rates of interest (although many States have Usury laws, so Payday lenders skirt it by calling these “fees” or “service charges”
  2. Addictive. Since money is easily available, there is less incentive to save and forgo certain expenditures
  3. Does not improve borrower’s credit history–whereas getting credit from a traditional source, even a store, and paying it down regularly will actually improve your credit rating and open up other doors to borrowing

About Islamic Banking

This banking system is based on the principles of Islamic law, also referred to as Sharia law, and guided by Islamic economics. The two basic principles are the sharing of profit and loss and the prohibition of the collection and payment of interest by lenders and investors. Islamic banks neither charge nor pay interest in a conventional way where the payment of interest is set in advance and viewed as the predetermined price of credit or the reward for money deposited. Islamic law accepts the capital reward for loan providers only on a profit- and loss-sharing basis, working on the principle of variable return connected to the actual productivity and performances of the financed project and the real economy. Another important aspect is its entrepreneurial feature. The system is focused not only on financial expansion but also on physical expansion of economic production and services. In practice, there is a higher concentrated on investment activities such as equity financing, trade financing and real estate investments. Since this system of banking is grounded in Islamic principles, all the undertakings of the banks follow Islamic morals. Therefore, it could be said that financial transactions within Islamic banking are a culturally distinct form of ethical investing. For example, investments involving alcohol, gambling, pork, etc. are prohibited.

For the last four decades, the Islamic banking system has experienced a tremendous evolution from a small niche visible only in Islamic countries to a profitable, dynamic and resilient competitor at an international level. Their size around the world was estimated to be close to $850 billion and is expected to grow by around 15 percent annually. While system of banking remains the main component of the Islamic financial system, the other elements, such as Takaful (Islamic insurance companies), mutual funds and Sukuk (Islamic bonds and financial certificates), have witnessed strong global growth, too. Per a reliable estimate, the Islamic financial industry now amounts to over $1 trillion. Moreover, the opportunity for growth in this sector is considerable. It is estimated that the system could double in size within a decade if the past performances are continued in the future.