Payday Loans: A Better Solution For The Average American Worker

With the New Year upon us and Christmas bills starting to pile up, countless Americans are wondering how they will pay the bills and cover the taxes due in April. Payday loans are one solution to individuals feeling the crunch of bills and taxes. A cash advance will enable you to pay those bills and take care of impending circumstances without over-extending your credit cards or racking up non-sufficient fund fees. This source of fast cash is used by many Americans to eliminate the long-term high cost of credit card interest rates while providing an instant cash solution for their pressing needs.

Why would you consider a payday loan? That is the question many American workers ask when they are looking for a solution to their bills, and unfortunately, those working class individuals without pristine credit are shut out of traditional options like low interest rate credit cards and home equity lines. The payday cash loan has become a practical option for individuals experiencing a financial emergency.

To meet the requirements for a payday loan, most cash advance services require you to meet a few qualifications. First, you need to be at least 18 years of age and a United States citizen. Second, you need to have a job or be able to show that you receive some kind of regular income, which brings in at least $1000 each month. Third, you must have a checking account (a few will qualify you with a savings account) to finalize the transaction. Some companies will include additional requirements, but these are the most common prerequisites to obtain a payday advance. If you meet these conditions, you generally have to fill out the company’s online form to find out how much you will qualify to receive. They, like nearly all lending institutions, will gauge the amount you may borrow by the amount of your income, although, unlike most lending institutions, these companies are much more lenient in their lending practices. In general, the majority of the online payday advance companies do not disqualify you because of bad credit, bankruptcy history, or prior bad checks.

There are no long lines and no long delays while the company reviews your application. In addition, this process takes place in the comfort of your own home or office, not the cold atmosphere of a bank. Most companies have a relatively simple and quick online form for you to fill out, and once your loan is approved and you speak with a representative, the company deposits cash directly into your bank account. Make sure you review the website completely, and read the details. Do you find the fees fair, and are the terms acceptable?

In order to receive a cash advance, companies require you to have a bank account because when it is time to pay back the loan, the company will simply deduct the principle and fees from your account during your next pay period unless you ask for an extension. Now the fees seem extremely high for this service unless you do the math on how much it will cost you not to take the short-term loan. What did you pay for your last bounced check? Most banks charge between $25-$35, and often times merchants charge a matching fee. The expense of a payday loan does not sound nearly as bad once you consider the bank charges and credit reporting that takes place when you bounce a check. If your credit card company were going to charge you a $29 late fee and raise your interest rate, wouldn’t you be better served to take an advance on your paycheck rather than take the long-term consequences of higher interest rates? Of course, there are payday loan companies that are out there to take advantage of unsuspecting consumers, and that is why you must do your homework and make sure the fees and terms are acceptable.

Lately, many news articles have criticized the payday loan industry, yet these same reporters have not questioned the excessive fees and interest rates charged by traditional lending institutions. Obviously, it is in the best interest of banks and credit card companies if consumers continue to accept their Machiavellian policies (remember Machiavelli advocated deceit to gain and maintain power). Non-traditional lending companies challenge this totalitarian authority and give the working class another option besides paying outrageous credit card fees, bank fees, and unwarranted interest rates.

Personal Loan After Bankruptcy: Can You Qualify?

If you want to qualify for a personal loan after bankruptcy there are four key areas that will determine how successful you are:

1) Your credit score

2) Collateral

3) Existing debt

4) Time

Let’s look at each factor in more detail and how they can help you increase your chances of qualifying for a personal loan after bankruptcy:

1) Credit score: In order to qualify for a personal loan after bankruptcy you will need to meet the lender’s minimum credit score criteria, provided the lender extends loans to individuals with a recent bankruptcy. You’ll want to find out before applying for a loan: Simply ask the lender if they consider applicants with a bankruptcy on their credit report.

Let’s suppose the lender does. How can you increase your credit score enough to qualify for a personal loan after bankruptcy?

The first step is to order copies of your credit reports from the three major credit reporting agencies (Experian, Equifax, and Trans Union). Next, make sure any inaccurate or obsolete negative information on your credit reports is removed or updated. I go into detail on this in After Bankruptcy Credit Solutions. I also explain how to legally add positive lines of credit to your credit reports, which is a very powerful way to increase your credit score – but I’ll save that for another article.

2) Collateral: Another major factor in obtaining a personal loan after bankruptcy is how much collateral you have. Why? Because if a lender has collateral that they can go after (i.e., equity in your home) should you default on the loan, that reduces their risk dramatically. So if you can provide collateral to the lender, it can increase your chances of qualifying for a personal loan after bankruptcy.

3) Existing debt: You don’t want to have too much debt when you apply for a personal loan after bankruptcy. If you do, the lender may feel you don’t have the capacity (enough income) to cover the loan payment, because you have too many other monthly expenses to pay (i.e., credit cards, auto payment, etc.) – as a result you could get turned for a personal loan after bankruptcy.

On that note, find out if the lender has a minimum income requirement, or debt-to-income ratio you need to meet. If they do, make sure you meet their minimum requirement before you apply for the loan.

4) Time: It’s been said that “time heals all wounds” – well, when it comes to obtaining a personal loan after bankruptcy this can certainly be true if you’ve developed a positive payment history since your bankruptcy.

When a lender is deciding whether or not to extend you a personal loan after bankruptcy, your credit report will play a major role. Generally speaking, if your credit report reflects a positive payment history for at least two years since your bankruptcy, it will certainly help.

We have looked at the four major factors that will determine whether or not you qualify for a personal loan after bankruptcy: Your credit score, collateral, existing debt, and time. To the extent you can strengthen each one of these you increase your chances of being approved for a personal loan after bankruptcy.

Even if you can’t qualify for a personal loan after bankruptcy immediately, don’t be discouraged! Remember, time can heal all wounds when it comes to qualifying for a personal loan after bankruptcy. Just make sure to focus on increasing your credit score, pay your existing bills on time, don’t take on too much debt, and build up your net worth.


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You Can Qualify For A Personal Loan After Bankruptcy

Getting a personal loan after a bankruptcy is not really that big a deal. To discover your possibilities, four areas must be considered: ONE – Your Credit History. TWO – Real Value Property You Own. THREE – How Much You Owe Beyond This New Debt. FOUR – Time and What You Have Been Doing With It. Addressing these concerns is necessary to help you qualify for a personal loan after bankruptcy.

One – Who Are You Credit-Wise?

Before you apply for any loan, you need to understand what potential lenders see when they look at your credit report. This is especially important when you are attempting to qualify for a personal loan after bankruptcy. Every citizen is allowed a free credit report annually from the three credit reporting agencies — Experian, Equifax, and Trans Union.

You can go on the internet to avail yourself of these reports. Scrutinize the reports and make sure that any obsolete or inaccurate information is deleted or corrected. You may approach a credit repair agency, with care, they may be able to offer you a few tips to dust-up your report. Watch who you deal with, some of these firms are blatant rip-offs.

Two – What Do You Own?

Collateral is another expedient when attempting to qualify for a personal loan after bankruptcy. Even if you have gone through a bankruptcy and have found a lender willing to finance you, having collateral can make the process smoother and even lower your interest rates. Putting collateral on the line, usually real estate, reduces the risk of the lender dramatically, resulting in the aforementioned better interest rates and easier qualification. But it is not just real estate that qualifies. Just about anything of value that can be sold to cover the loan should you default will do. Discuss these collateral matters with your lender so you can best qualify for a personal loan after bankruptcy.

Three – How Much Do You Owe?

It goes without saying that you are not going to impress a prospective lender if you have just filed bankruptcy and yet have an overwhelming amount of debt once again on your books. The lender will scrutinize your income and other assets to figure out if you are in over your head regarding debt to income ratio. Make sure you understand what restrictions exist regarding this before you make any application to the prospective lender. Understand, applying to a number of lenders can damage your already poor credit report.

Some credit reporting agencies view too many applications indicating that a person is needy for cash, somewhat how drug seekers are viewed by doctors and pharmacists. So keep your applications few and far between to help you qualify for a personal loan after bankruptcy.

Four – How Long Has It Been?

Time can heal a lot of scarification. Hopefully, after having declared bankruptcy, you have to put into practice a solid habit of repaying bills and loans on time and in the proper amount. Your credit report can still play a major role. If you have experienced a time of positive payment history since your filing, your chances improve greatly for landing the loan you need. And, the further in time you distance yourself from your bankruptcy, well, the lesser the impact when you seek to qualify for a personal loan after bankruptcy.

If You Cannot Immediately Qualify for a Personal Loan After Bankruptcy

In spite of all your good works since filing for bankruptcy, you may still meet a brick wall. Just continue to focus on your credit score, continue to pay your bills on time, do not take on too much extra debt, and build up your net worth. You can find advisory programs to do all of these things by doing a web search. Much knowledge, along with ways to circumvent many onerous requirements, exists out there. Go ferret it out. Your next personal loan application will probably be approved. Bide your time. Keeping all these little things in mind will help you qualify for a personal loan after bankruptcy.