Using Payday Loans Responsibly

by Admin on December 6, 2013

LoansIt is generally agreed that payday loans have a useful part to play in our management of everyday personal finances – but only when used responsibly and with all due caution regarding the need for the loan in the first place, exactly how much it is going to cost you, and your absolute confidence in being able to make the repayment when it falls due.

The need

Of course there are likely to be times when we might all welcome a little extra cash – but there is a difference between liking it and needing it.

As the government funded Money Advice Service points out, there are some things we may like, but simply cannot afford. These might include:

  • nights out;
  • tickets for concerts or sporting events;
  • new clothes; or
  • an indulgence or treat, such as a dinner out or a weekend break.

Expenditure in the face of an emergency – such as essential repairs to your car – however, might help you avoid further costs in the future and, therefore, warrant the short-term commitment to a payday loan.

The cost

Some commentators make even more clear their dislike of payday loans as a matter of principle. The popular personal finance website, Money Saving Expert, for example, has little good to say about this form of borrowing.

But the criticism is based largely on two factors: the seemingly high cost of borrowing when measured by its APR (annual percentage rate) and the failure on the part of some lenders to conduct their business with a transparency on which customers may safely rely.

However, in the case of lenders such as https://wonga.com, for example, the APR might well be 5853%, but it is important to keep in mind that this APR is a reflection of the annual interest rate, including compound interest. In reality, of course, a payday loan is only for one day or a maximum of 30 days (with a shorter repayment term paradoxically reflecting a higher APR). The loans also include a flat fee of £5.50 to help cover the costs of the lender’s fast transfer of funds to borrowers’ bank accounts.

Indeed, Wonga make it a central point of principle that all of the information on its website and all aspects of its lending are totally transparent – whatever the tricks, ruses or deceptions that some critics may level at other lenders.

Repayment

It may seem obvious to point out that any kind of loan – including a payday cash advance – needs to be repaid when repayment falls due. Responsible borrowing, therefore, requires your 100% certainty that you are going to be able to repay your payday loan in accordance with your loan agreement – and without recourse to repaying one loan by taking out yet another one (the perils of which are discussed in greater detail in this article in Investopedia).

In sum

Provided you exercise due care and are responsible in your borrowing from reputable lenders, therefore, there seems every reason why the occasional use of short-term cash advances may play a part in normal, everyday personal finances.

photo by: Omar Omar

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Top 5 Frugal Car Buying Tips

by Editor on November 18, 2013

Buy Here, Pay Here

Purchasing a car can be one of those mega-milestone moments that you think about your whole life. Whether it is your first car – the rusty one with the missing hubcaps you got before college – or your tenth car – the sedan you purchased after you got a raise at work – it can be a momentous occasion each time. However, purchasing a vehicle can be a big purchase – oftentimes it is the biggest purchase of someone’s life. So, how do you purchase a car without breaking the bank? How do you become a car owner without going broke? Indeed, there are a number of ways to save money when purchasing a vehicle. Here are the top five frugal car buying tips.

1.  Go used. Used cars can oftentimes be vastly less expensive than newer cars. Everyone knows that cars depreciate. So, even a car that is only one or two years old could have a tremendous markdown value. Add on the fact that someone else owned the vehicle and the car could be dirt cheap. The key, however, is to know where you can get the best deals for used cars, so a little researching may be in order.

2.  Don’t go to a dealership. Dealership cars are often marked up by multiple percentage points. Not only does a dealership have to maintain overhead, but the sales people also have to make a commission. So, you’ll often see a vehicle on sale at a dealership for thousands of dollars more than you would see advertised by a private seller. You can usually find private sellers online and they can often have better deals – mainly because they are looking to unload the vehicle sooner rather than later.

3.  Make sure that you get a thorough inspection of the vehicle before you purchase. There are a number of things to inspect in a vehicle before you can actually make a smart decision to buy it. So, make sure to devise a thorough list of all the different components you want to inspect. If a mechanic finds small problem in a car you want to purchase, you may want to see if you can have the price tag on the vehicle taken down. There is a good chance that the dealership will take the price down.

4.  Think about getting a loan out against the title of the vehicle. There is no better way to become the full owner of a vehicle than by visiting eTitleLoan.com and taking money out against your car’s title. If you need a little extra time to pay off the vehicle that you want to purchase, perhaps taking out a loan is the best option. When it comes down to it, a little debt may be worth it to own a vehicle.

5.  Haggle with the dealer or car buyer. Just like a car seller will use heavy tactics to sell you a vehicle, you should use heavy tactics to get the price down. In the world of selling and buying vehicles, negotiating is part of the game. So, make sure that you meet somewhere in the middle and you should get your hands on the car of your dreams.

photo by: Hugo90

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What You Need to Realize When Dealing with Tax Debt

September 23, 2013

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Best Savings Rates

September 22, 2013

There are different kinds of savings accounts that you can open at a bank. Most people open a regular savings account that pays little interest, but also has a low minimum balance requirement. A regular savings account will pay an extremely low interest rate of around 0.01% APY. So basically, you would have to multiple […]

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Free Checking Accounts

September 21, 2013

Free checking accounts are becoming more commonly used at banks. These types of checking accounts don’t require the account holder to have a minimum balance in their account, which means no monthly fees. That way if somebody is living paycheck to paycheck then they won’t have to worry about paying a monthly bank fee when […]

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