1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair
Isaac).
2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% -
30%!
3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.
Payday Loans Consumer Information for Each US State
Click on any of the States below to learn whether Payday Loans are legal in that particular state. Each page will also tell you the related Law or Citation where information is referenced from.
Each page has the following information:
Maximum Loan Amount: The maximum payday loan amount you can take out at any point in time.
Loan Term: The maximum amount of time you have to borrow a payday loan, after which full payment is due.
Maximum Finance Charge: A cap on the maximum interest that lenders can charge you.
Finance Charge for 14 day $100 Loan: This is the typical interest charge you will pay on a $100 loan borrowed for 14 days.
Max # of Payday Loans that an individual can take out, types & amounts of penalties that lenders can charge if not paid within due date and whether lenders can be charged for "Criminal Action."
Video: Payday Loan Lenders
Note: Some States still have Small Loan Rate Caps or Usury Laws. The database will tell you the small loan rate cap and its related referenced citation. For example, the state of West Virginia has a Small Loan Rate Cap of "31% per year on a loan of $2,000 or less" and its related Citation is "Small loan act applies. W. Va. Code § 46A-4-107 and § 32A-3-1 et seq."
The Annual Percentage Rate (APR) is an interest rate that is different from the Finance Charge. The APR was developed to gauge the "true cost of borrowing a loan." The finance charge is a mere interest rate e.g. 8% that does not provide a lot of useful information. However, the APR does.
Here are the components (finance charges) included in APR:
-> Loan processing fees
-> Underwriting fees
-> Document preparation fees
-> Private mortgage insurance
-> Pre-Paid interest charges: The interest charged from the date of closing a loan to the end of the month (when payment is due).
-> Points - Discount & Origination Points
The following items are NOT included in the Annual Percentage Rate (APR) calculation:
-> Title or abstract fee
-> Appraisal fee
-> Escrow fee
-> Attorney fee
-> Notary fee
-> Document preparation fees
-> Home inspection fees
-> Recording fees
-> Transfer taxes
-> Credit report look up fees
2) Cooling-Off Period
A Cooling-Off Period is when all loan clients receive a 3 (three) business day cooling-off period during which clients can change their mind about the agreement and exit or cancel with only a specified fee. A business day is any day that is not a Saturday, Sunday or public holiday.
Video: Understanding Annual Percentage Rate (APR)
3) NSF Check (Non-Sufficient Funds)
An NSF check is when a check is dishonored because the Payee does not have sufficient funds in his/her bank account.
4) Loan Term
The loan term is the length of time after which the loan is due. For example, if the loan term is 30 days, the loan becomes due after 30 days of initial borrowing date.
Warning about Payday Loans
While Payday loans can be an effective aid to get your through to you next pay check, beware. Payday loans have very high interest rates on the money they provide you. This extremely high interest rate, usually 100-200% APR, is in part due to the length of the loan. Payday loans terms are typically no more than two weeks or a month at the most. APR’s are based on a year long loan, so the number is very high, but based on the short loan period, somewhat reasonable. If you need the money, you need the money. The real danger is in rolling over your payday loan. Meaning, when your loan is up you either don’t pay, resulting in fees and even bad credit, or you cycle it. When you cycle the loan you simply pay a fee when the loan is over to extend it, or borrow another loan to pay off the first one. This vicious cycle can be costly, and can easily end in financial ruin for you. So if you need money, use a Payday loan, just avoid using them as part of your financial planning.
