payday loans – Sail Theory http://sailtheory.com/ Mon, 21 Mar 2022 13:17:26 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://sailtheory.com/wp-content/uploads/2021/06/icon-2021-06-25T011712.182-150x150.png payday loans – Sail Theory http://sailtheory.com/ 32 32 Are payday loans your only option when you have bad credit? https://sailtheory.com/are-payday-loans-your-only-option-when-you-have-bad-credit/ Mon, 21 Mar 2022 13:17:26 +0000 https://sailtheory.com/are-payday-loans-your-only-option-when-you-have-bad-credit/ When times are tough, payday loans may seem like your only option in Texas. But are they? Keep scrolling to learn more about these online short term loans and how online installment loans in texas may offer an alternative. Why do people turn to payday cash advances? An unexpected expense can be tough on any […]]]>

When times are tough, payday loans may seem like your only option in Texas. But are they?

Keep scrolling to learn more about these online short term loans and how online installment loans in texas may offer an alternative.

Why do people turn to payday cash advances?

An unexpected expense can be tough on any wallet, but it’s especially tough when you have no savings and a bad credit score.

Unfortunately, emergencies rarely take this into account. They rush into your life no matter how prepared you are to handle one. Life goes like this – you lose a few shifts, there’s an unexpected repair on your air conditioner, or you get stitches in the ER.

Borrowing money might be the only way to manage these expenses and get back on your feet.

The only problem is that your bad credit can make it harder to find a loan. A low score tells financial institutions that you have encountered obstacles in the past that cast doubt on your ability to repay what you owe today.

Some financial institutions won’t lend you money if you fall below their benchmark. But direct payday lenders do not have these limitations. They might be willing to play ball even if you have a low credit.

The reality of bad credit and the cost of the loan

Rightly or wrongly, your past borrowing behavior reflects your future habits, and a low score signals you as a potential risk to lenders.

Some lenders consider this risk too great to write you a check. But direct payday lenders hedge their bets in another way. They tend to raise their prices, so you end up paying more to borrow than if you had good credit.

How much you pay depends a lot on your location. Each state regulates the rates direct payday lenders can charge on their cash advances, and some (like Texas) have looser restrictions.

According to responsible credit center, Texas has the highest average rates in the country. The typical $300 payday loan in the Lone Star State is 664%.

Short terms and high APRs can present a challenge

Online payday loans might still be the best bet, even at this price. However, direct payday lenders also expect you to pay everything back by your next payday. This gives you about two weeks to find your entire cash advance.

These short durations can be difficult to stick to if you are already struggling to make ends meet. Living paycheck to paycheck means you have very little left over after paying for the essentials, so you may not have enough room in your budget.

So, are there any alternatives?

Good news: there are other options online that give you more time to pay off what you owe. You may qualify for a bad credit installment loan, regardless of your score.

In a state like Texas, where interest rates are higher, you could always pay more to borrow an installment loan online. However, Texas installment loans come with an extended repayment period.

The best installment loans Texas has to offer spread your payments over several months. Each payment will be less than what you borrowed, so you never have to come up with the money all at once.

This extended delay can be more manageable when things are tight. But you won’t know until you sit down with your spending plan and crunch the numbers. Compare rates, terms and conditions to be sure.

If the short turnaround time of a direct payday lender is hard to match, consider the alternative. A payment schedule gives you more leeway, so you may find it easier to juggle your debt and other big bills.

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Martin Lewis gives advice to families turning to payday loans as cost of living crisis rages https://sailtheory.com/martin-lewis-gives-advice-to-families-turning-to-payday-loans-as-cost-of-living-crisis-rages/ Thu, 17 Mar 2022 18:13:15 +0000 https://sailtheory.com/martin-lewis-gives-advice-to-families-turning-to-payday-loans-as-cost-of-living-crisis-rages/ Skyrocketing costs and worries about paying bills have led to increased interest in payday loans, according to a new survey. Research by savings platform Raisin UK has revealed a massive 350% increase in internet searches for payday loans over the past 12 months as the country faces a cost of living crisis and families are […]]]>

Skyrocketing costs and worries about paying bills have led to increased interest in payday loans, according to a new survey.

Research by savings platform Raisin UK has revealed a massive 350% increase in internet searches for payday loans over the past 12 months as the country faces a cost of living crisis and families are struggling to make ends meet. Household budgets are being squeezed in every way, from petrol hitting a UK record £1.55 a liter last week to soaring supermarket food prices – and that’s before the new cap on Energy prices don’t come into effect next month, when the average family will have to find almost £700 extra every year just to pay their energy bill.

Kevin Mountford, co-founder of UKwarned that Payday loans can be a dangerous path, despite the short-term relief they may seem to provide.

Read more: The energy price cap explained

“It’s easy to fall into a cycle of debt with these schemes if you continually need them to cover shortfalls. With interest rates rising, payday loans will most likely leave you struggling financially, d especially since you will owe these companies an ever-increasing amount of money,” he says.

Payday loans are short-term loans for relatively small amounts. They may be easy to access, but the interest rates are very high. They work by agreeing that the company can take its payment from your debit card on the day your next salary payment is due, although some lenders allow you to pay over a longer period – often up to six months.

For some, they offer loans of last resort which, used correctly, can fix unexpected holes in people’s finances, although according to Moneysavingexpert Marin Lewis, many of these loans have been irresponsibly given and mis-sold to those who could not afford to repay.

Dozens of lenders with bad credit have gone bankrupt, including big-name payday lenders such as Wonga and QuickQuid, leaving customers with legitimate claims with dramatically reduced payments.

Citizens Advice agrees with Martin Lewis that payday loans are almost always a bad idea and cautioned against people seeing them as a quick fix to solve today’s problem.

Martin Lewis advised people to try the following ways to raise short-term cash before applying for a payday loan:

  • A credit card offers interest-free spending, if you pay it off in full. A 0% card gives you even more time to pay without interest.
  • Check if you qualify for a government budgeted loan at 0% up to £812
  • Ask for help from family
  • See if your local credit union will offer you a loan
  • Consider extending your overdraft – it’s usually cheaper than a payday loan

And if you’re still determined to get a payday loan, he advises the following:

  • Borrow as little as possible and budget to repay as soon as possible
  • Don’t take out one personal loan to pay off another. If you regularly get payday loans, there’s a problem
  • Always check that a lender is registered with the Financial Conduct Authority (FCA). Payday lenders can be bad – loan sharks are MUCH worse.

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Improving financial health: a win-win situation for banks and their customers https://sailtheory.com/improving-financial-health-a-win-win-situation-for-banks-and-their-customers/ Tue, 15 Mar 2022 17:09:22 +0000 https://sailtheory.com/improving-financial-health-a-win-win-situation-for-banks-and-their-customers/ By Uday Akkaraju, CEO of BOND.AI Today, 66% of Americans in the United States have financial health problems and 14% are considered downright vulnerable – in other words, the majority of people living in the United States cannot plan their lives in full. financial freedom. At the same time, financial institutions collect their customers’ transaction […]]]>

By Uday Akkaraju, CEO of BOND.AI

Today, 66% of Americans in the United States have financial health problems and 14% are considered downright vulnerable – in other words, the majority of people living in the United States cannot plan their lives in full. financial freedom.

At the same time, financial institutions collect their customers’ transaction data, make loans and set interest rates – holding the assets for people’s financial health: their economic data.

Here’s why and how banks should use customer data, tailor their offerings to customers’ financial needs, and in turn generate higher revenue.

The challenges of financial health

The most pressing issues for people struggling financially are payday loans and their high interest rates. On average, payday lenders charge $520 in fees to borrow $375. Having to opt for non-traditional means of financial support, they ironically have to pay more than others when they borrow money, while their financial room for maneuver is less. By paying attention to just a handful of metrics, banks are excluding millions of low-income and middle-class customers from improving their financial health – and the cycle continues.

Standardized products also prevent consumers from improving their financial health. Financial institutions offer a range of standard products and loans and use basic data analysis to set interest rates or deposit payments. And even retailers that offer more diverse credit options to consumers, like Buy Now Pay Later (BNPL), are now having significant problems with their credit programs because most users are in debt and unaware of their financial situation.

But what if the solution could lie in the collection of financial data and its more relevant analysis?

How consumer data can help improve financial well-being

To overcome the precarious financial situation of modern Americans, banks must stop looking at past credits, years of financial history, or debt-to-credit ratios to combat skewed credit scores and interest rates. Behavioral data, such as spending habits and economic patterns, will provide a more accurate picture of people’s ability to repay their loans or use their credit cards responsibly. Low income does not necessarily represent a consumer’s ability to pay bills on time – it requires deeper knowledge to adjust to a fair credit score.

Artificial intelligence (AI) data analysis can categorize customer profiles based on their behavior and financial capabilities. By continuously updating these customer profiles, the algorithm will understand patterns and deviations and give recommendations to consumers as well as banks. Suppose a customer’s account shows diaper purchases and high credit card spending – he may have a new member in his family. To support them, their bank may offer a higher credit card limit or extend the repayment term. Personalized products appeal to customers.

But even the smartest analytics couldn’t paint a full picture of a consumer’s financial and health needs — after all, a consumer’s personal preferences don’t necessarily show up in transactional data. Technologies such as conversational chatbots take the pulse and provide deeper insights into financial aptitude. Advanced conversational AI can communicate with customers and ask questions like, “Tomorrow you get $2,000. You can spend it on a language course, a new TV, or a new pair of eyeglasses. do you choose?”

Why customer-centric thinking is the only solution

In the financial world, customer retention, acquisition and satisfaction are not only linked to quick and easy transactions, but to the experience of optimizing one’s financial situation. Banks with a customer-centric business model will create solid long-term value by building customer engagement and trust. The science is simple: a bank that reminds people of their debts every day leaves them with a bad conscience and negative feelings. A bank that actively helps find the best financial tool to meet economic challenges and is sensitive to individual obstacles is a bank that a customer is unlikely to trade for a competitor.

Today’s challenges require modern technologies and an openness to disruptive thinking. Financial institutions that overcome outdated methods of data collection and analysis and focus their business model on the customer will attract a much larger audience and improve the economic situation of their customers. By doing so, banks will also improve their bottom line – and improving financial health will become a win-win situation for everyone.

This article was submitted by an external contributor and may not represent the views and opinions of Benzinga.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Global Payday Loan Services Market Estimate 2022-2028 Analysis by Key Players like Wonga, Cash America International, Wage Day Advance, DFC Global Corp, Instant Cash Loans, Speedy Cash, etc. https://sailtheory.com/global-payday-loan-services-market-estimate-2022-2028-analysis-by-key-players-like-wonga-cash-america-international-wage-day-advance-dfc-global-corp-instant-cash-loans-speedy-cash-etc/ Sun, 13 Mar 2022 12:53:09 +0000 https://sailtheory.com/global-payday-loan-services-market-estimate-2022-2028-analysis-by-key-players-like-wonga-cash-america-international-wage-day-advance-dfc-global-corp-instant-cash-loans-speedy-cash-etc/ “The latest study titled “Global Payday Loan Services Market 2022 by Key Players, Regions, Type and Application, Forecast to 2028” released by Affluence Market Report, presents an analysis of the current and future scenario of the global payday loan services market payday loans. ” In this report, a comprehensive analysis of the current global payday […]]]>

“The latest study titled “Global Payday Loan Services Market 2022 by Key Players, Regions, Type and Application, Forecast to 2028” released by Affluence Market Report, presents an analysis of the current and future scenario of the global payday loan services market payday loans. ”

In this report, a comprehensive analysis of the current global payday loan services market in terms of demand and supply environment is provided along with the price trends currently and in the coming years. This report also includes global and regional market size and forecast, key product development trends and typical downstream segment scenarios, in the context of market drivers and inhibitors analysis. The report overview includes the study of market scope, key players like Wonga, Cash America International, Wage Day Advance, DFC Global Corp, Instant Cash Loans, Speedy Cash, etc., market segments and sub-segments, market analysis by Type, Application, Geography, and the remaining chapters that illuminate the Payday Loan Service market overview

To get a premium sample copy of the Payday Loan Services Market Report with a comprehensive TOC, Figures and Charts. Connect with us at: https://www.affluencemarketreports.com/industry-analysis/request-sample/2133742/

Sample Payday Loan Services Market Report Includes:

  • A brief introduction to the research report.
  • Graphical introduction of the regional analysis.
  • The best market players with their revenue analysis.
  • Selected illustrations of market information and trends.
  • Sample report pages.

Global Payday Loan Services Market: Segment Analysis

The research report includes specific segments by region (country), by company, by type and by application. This study provides information on sales and revenue over the historical and forecast period from 2015 to 2028. Understanding the segments helps to identify the importance of the various factors contributing to market growth.

Key Market Players for the Global Payday Loan Services Market are listed below:

  • wonga
  • Cash America International
  • Payday advance
  • DFC Global Corp
  • Instant Cash Loans
  • MEM Consumer Financing
  • Fast payment
  • TitleMax
  • LoanMart
  • Check and go
  • Finova Financial
  • TMG loan processing
  • Just military loans
  • MoneyMutual
  • Allied cash advance
  • Same day payday
  • LendUp Loans

Payday Loan Services Market Segmented by Types

  • Financial support from the platform
  • Off-platform financial support

Payday Loan Services Market Segmented by Application

  • Staff
  • Retirees
  • Others

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  • North America [United States, Canada, Mexico]
  • South America [Brazil, Argentina, Columbia, Chile, Peru]
  • Europe [Germany, UK, France, Italy, Russia, Spain, Netherlands, Turkey, Switzerland]
  • Middle East and Africa [GCC, North Africa, South Africa]
  • Asia Pacific [China, Southeast Asia, India, Japan, Korea, Western Asia]

Key target audience:

  • Manufacturers/suppliers/distributors of payday loan services.
  • Market research and consulting companies.
  • Government bodies such as regulators and policy makers.
  • Organizations, forums and alliances related to payday loan service.

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Key Aspects of the Payday Loan Services Market Report Indicated:

  1. Overview of the payday loan services market
  2. Company Profiles: Wonga, Cash America International, Wage Day Advance, DFC Global Corp, Instant Cash Loans, MEM Consumer Finance, Speedy Cash, TitleMax, LoanMart, Check `n Go, Finova Financial, TMG Loan Processing, Just Military Loans, MoneyMutual, Allied Cash Advance , Same Day Payday, LendUp Loans
  3. Payday Loan Services Sales by Key Players
  4. Payday Loan Services Market Analysis by Region
  5. Global Payday Loan Services Market Segment By Type: Platform financial support, off-platform financial support
  6. Global Payday Loan Services Market Segment By Application: Staff, Retirees, Others
  7. North America by Country, by Type and by Application
  8. Europe by Country, by Type and by Application
  9. Asia-Pacific by Country, by Type and by Application
  10. South America by Country, by Type and by Application
  11. Middle East and Africa by Country, by Type and by Application
  12. Sales channel, distributors, traders and resellers
  13. Research results and conclusion
  14. appendix

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Government changes controversial lending rules https://sailtheory.com/government-changes-controversial-lending-rules/ Fri, 11 Mar 2022 19:54:08 +0000 https://sailtheory.com/government-changes-controversial-lending-rules/ The government is making changes to its controversial loan laws, following complaints that it was preventing some people in a decent financial position from getting mortgages and other loans. By Kathryn Armstrong The rules were changed in December in a bid to protect people against loans they couldn’t afford. However, this meant that banks and […]]]>

The government is making changes to its controversial loan laws, following complaints that it was preventing some people in a decent financial position from getting mortgages and other loans.

By Kathryn Armstrong

The rules were changed in December in a bid to protect people against loans they couldn’t afford.

However, this meant that banks and other lenders had to take a closer look at people’s spending when assessing the financial situation, especially when it came to their spending.

“Someone would bungee jump and then the bank would say, ‘How often do you bungee jump? ‘” Economist Tony Alexander said.

He thinks part of the problem was that as banks feared huge fines if they failed to apply the new rules correctly, they became incredibly cautious.

Trade Minister David Clark said the problem was how the rules were interpreted.

He said the rules have now been clarified to make them simpler.

This includes clarifying that where borrowers provide a detailed breakdown of future living expenses, there is no need to learn current living expenses from recent banking transactions.

Nor do lenders need to treat a loan applicant’s regular savings as an expense.

“In very simple terms, that means banks don’t have to dig through your bank statements for the past few months,” Alexander said.

They can take your word for your future spending.”

Meanwhile, a broader investigation into the anticipated implementation of the December CCCFA changes continues.

David Clark said that so far there was no reason to believe that the new laws were the main driver of the loan reduction.

ACT chief David Seymour welcomed the clarification of “excessive lending rules that allowed people to choose between Netflix and a mortgage”.

Seymour said the ACT has been calling for changes to the law since January after the effects of “were crippling for those seeking a loan”.

“The occasional flat white should never have been a reason to keep a first-time home buyer off the market.”

Tony Alexander said that although it is too early to see a huge change in the amount of money loaned, there have been other noticeable effects.

“Applications going to banks, to mortgage brokers, really started to drop quite dramatically since probably just before December 1, partly because of loan-to-value ratios.”

Financial mentoring group FinCap said it has noticed positive changes since the December Lending Act was amended.

North Harbor Budgeting Service financial mentor David Verry said the reforms have led to the demise of mobile or payday lenders, like truck shops.

“The number of people we had before – I had clients who had five or six payday loans – I don’t see payday loans now, or anything like a payday loan,” he said.

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Major League Soccer secures $25m loan from black bank syndicate https://sailtheory.com/major-league-soccer-secures-25m-loan-from-black-bank-syndicate/ Thu, 10 Mar 2022 17:26:00 +0000 https://sailtheory.com/major-league-soccer-secures-25m-loan-from-black-bank-syndicate/ Major League Soccer today announced what is being hailed as a landmark $25 million loan to a syndicate of black banks to encourage more investment in black-owned businesses and communities. It is the first time that a professional sports league has participated in a major business transaction exclusively with black banks, and is facilitated by […]]]>

Major League Soccer today announced what is being hailed as a landmark $25 million loan to a syndicate of black banks to encourage more investment in black-owned businesses and communities.

It is the first time that a professional sports league has participated in a major business transaction exclusively with black banks, and is facilitated by the non-profit National Black Bank Foundation (NBBF).

The move, one of many made by MLS to address inequality issues over the past two years, is driven by a set of stark numbers. According to the NBBF, there are currently only 21 black-owned banks in the United States, down from 36 a decade ago. Together, these banks control $4.8 billion, or less than 1%, of the nation’s banking assets, limiting the flow of capital to black communities. Meanwhile, about half of black families nationwide are unbanked or underbanked, studies show, compared to 15% among white families.

The loan aims to expand Black Americans’ ability to access credit and grow their wealth by creating lending capacity for home and small business loans.

According to Zillow, black applicants in 2020 were denied mortgages at an 84% higher rate than white applicants, an increase of 10 percentage points since 2019. Lack of access to essential financial services has forced black households to resort to alternatives like check-cashing services, payday loans, money orders and prepaid credit cards, with high interest rates and fees.

MLS will work with the National Black Bank Foundation, 100 Black Men of America, the National Coalition of 100 Black Women and Black Players for Change to “educate their constituents and members about economic empowerment programs,” according to an announcement.

The syndication team facilitating the deal includes Alamerica Bank of Birmingham and Citizens Trust Bank of Atlanta.

MLS commissioner Don Garber said the partnership would “raise awareness of the importance of black-owned banks and their impact on the economy.”

NBBF co-founder Ashley Bell said the announcement “raised the bar for American businesses.”

“If other leagues and big businesses follow the MLS model, the lives of Black families across the country will change for the better because their local Black bank will have the capital resources to approve historic numbers of home and small business loans.” , Bell said.

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Here are the tips officials are sharing for Consumer Protection Week https://sailtheory.com/here-are-the-tips-officials-are-sharing-for-consumer-protection-week/ Wed, 09 Mar 2022 01:42:30 +0000 https://sailtheory.com/here-are-the-tips-officials-are-sharing-for-consumer-protection-week/ I’m not a fan of making every free calendar day a holiday, and “National Consumer Protection Week” doesn’t sound the most exciting. But it does spur massive sharing of the best tips and tools for avoiding scams and fraud, which I think makes it more useful than National Ice Cream Day. So, in honor of […]]]>

I’m not a fan of making every free calendar day a holiday, and “National Consumer Protection Week” doesn’t sound the most exciting.

But it does spur massive sharing of the best tips and tools for avoiding scams and fraud, which I think makes it more useful than National Ice Cream Day.

So, in honor of the sexiest and most convenient week of the year, here are some of the resources I’ve seen floating around that will empower you as a consumer.

Lodging

If you or someone you know is facing illegal evictions, rent increases, or housing discrimination, check out my Feb. 10 column on local resources for tenants.

I’ve since heard that some legal aid organizations are overwhelmed, so check out lawhelpca.org/topic/housing for more options. You can also contact the Sonoma County Tenants Union Hotline at 707-387-1968.

The California Department of Justice asks victims of such violations to send advice or file complaints to housing@doj.ca.gov. In a similar vein, the agency recently launched a Housing Crisis Strike Force and housing portal (oag.ca.gov/housing) that offers many resources for renters and homeowners in difficult situations.

For California homeowners struggling to finance their home, watch out for foreclosure salvage scams. Any foreclosure consultants or loan modification service companies that require money up front do so illegally, so never agree to pay fees for loans before the services are provided.

Additionally, officials warn never to make your mortgage payments to anyone other than your lender or loan officer, so be wary of any mortgage advisor who tries to get payments redirected to you through them. (You can check if a foreclosure consultant is registered with the Attorney General’s office or if a mortgage lender or managing agent is licensed at docqnet.dfpi.ca.gov/licensessearch/.)

To file a complaint against mortgage brokers, you can contact the Department of Financial Protection and Innovation at dfpi.ca.gov/file-a-complaint/ or call 866-275-2677.

Debts and loans

The state has a number of resources about debt collectors and your rights at oag.ca.gov/consumers/general/debt-collectors. (For example, there are certain rules regarding harassing calls.) If you receive a debt collection call, require written notice (a “validation notice”) to review before giving out personal or financial information to avoid scams. .

When it comes to predatory lending, experts recommend avoiding payday lenders as much as possible, as the rates on these loans are usually much higher than those on credit cards and other loans. (The average annual percentage rate for payday loans is 372%.)

You can search for a payday lender’s license and any disciplinary action taken against it at dfpi.ca.gov/local.

Other scams

This year has seen the rise of the COVID-19 testing scam, a phenomenon our region has not escaped.

As the pandemic has receded and testing has become available again, this is thankfully less of an issue now, but stick to county-approved testing locations as much as possible, lists of which you can always find at covid19.ca.gov/ get-local-information/#County-websites.

Another scam to watch out for these days are fraudulent charities. They unfortunately arise in times of urgent need and disaster, such as the war in Ukraine, when people seek to show their support. Don’t let that deter you from sending help, but slow down and do your research.

You can take steps such as checking a charity’s registration status and viewing organizations’ ratings from charity watchdog groups such as the Better Business Bureau’s Wise Giving Alliance, CharityWatch, or CharityNavigator. Double-check for copycat charities that look like well-known organizations but may, for example, have a slightly different URL.

It’s also a good idea to run fundraising campaigns on Google before donating to see what others are saying. You can report charities in bad faith at oag.ca.gov/charities/complaints.

Speaking of scammers taking advantage of times of stress, with skyrocketing energy bills, watch out for utility bill scams, too. In 2021, PG&E reportedly received more than 11,000 reports of scammers posing as the utility, with customers losing more than $600,000 through fraudulent payments.

Beware of those who may demand immediate payment or risk cutting off service or requesting financial information under the guise of offering you a refund or discount. If in doubt, hang up and call PG&E yourself.

More broadly, for phone or internet scams or any other scams, AARP has a Fraud Watch Network with resources that will help anyone spot scams and a hotline (877-908-3360) with specialists fraud that can help victims who have been targeted.

On March 10, the Network is hosting an event with the Federal Trade Commission at 11 a.m. on dealing with the fallout from a scam and tips on recovering lost money. You can register at aarp.cventevents.com/event/390dbc6e-8273-40ac-81e8-fc861c927fe7/summary.

In general, Californians who are victims of fraud or scams can report violations of consumer protection laws to the Department of Justice at oag.ca.gov/report. You can also contact your local county consumer protection office.

“If you have been exploited by a predatory lender, are facing abusive debt collection practices, have been unlawfully evicted, or have information about other violations of the law, please file a complaint with from my office,” Bonta said in a press release. Monday.

“The leads we get from the public help us identify where companies are trying to circumvent the law – and help us hold companies accountable.”

“In Your Corner” is a new column that puts monitoring reports to work for the community. If you have a concern, advice or hunch, you can contact “In Your Corner” columnist Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On Twitter @InYourCornerTPD and Facebook @InYourCornerTPD.

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Why would anyone want to get out of debt? https://sailtheory.com/why-would-anyone-want-to-get-out-of-debt/ Sat, 05 Mar 2022 20:00:23 +0000 https://sailtheory.com/why-would-anyone-want-to-get-out-of-debt/ Why would anyone want to get out of debt? Think about it. You borrow money. You can use this money now. Then you can pay it back slowly, over time. Who wouldn’t want this deal? You might expect a financial planner to say that everyone should deleverage as soon as possible. Although I wouldn’t make […]]]>

Why would anyone want to get out of debt?

Think about it. You borrow money. You can use this money now. Then you can pay it back slowly, over time. Who wouldn’t want this deal?

You might expect a financial planner to say that everyone should deleverage as soon as possible. Although I wouldn’t make such a general statement, it’s generally true – being debt-free is wise.

But why?

• Is it because the debt is bad?

No. Debt is neither bad nor good. It is simply a magnifying glass of your financial decisions.

When you buy things that lose value over time (eg, cars, clothes, electronics, vacations), debt increases the cost of those items. With credit card debt, you can end up paying double the listed price!

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What happened to loans between individuals? https://sailtheory.com/what-happened-to-loans-between-individuals/ Fri, 04 Mar 2022 17:21:26 +0000 https://sailtheory.com/what-happened-to-loans-between-individuals/ Even before Uber disrupted the taxi industry and Airbnb disrupted vacation rentals, the idea of ​​peer-to-peer lending aimed to provide individuals with alternatives to traditional sources of consumer credit, both as borrowers and investors. But the fintech market is constantly changing. We’ll tell you what happened to the concept and how (and if) you can […]]]>

Even before Uber disrupted the taxi industry and Airbnb disrupted vacation rentals, the idea of ​​peer-to-peer lending aimed to provide individuals with alternatives to traditional sources of consumer credit, both as borrowers and investors. But the fintech market is constantly changing. We’ll tell you what happened to the concept and how (and if) you can invest or borrow from a digital lender.

Most companies that started out as online platforms to connect consumers who wanted to borrow money with individual investors who funded loans, also known as peer-to-peer lending, now partner primarily with sources larger funding providers, such as banks and hedge funds, using their artificial intelligence tools to assess creditworthiness. Other players left the company or had regulatory issues. As the business model continues to develop, it is also referred to as market lending or fintech lending.

Nowadays, funding for digital loans by individual investors has been eclipsed in the market by larger sources of funds, according to Nimayi Dixit, fintech analyst for S&P Global Market Intelligence.

Yet the opportunities for individual investors to fund peer-to-peer lending remain, although as with any investment you will need to do your due diligence. Likewise, borrowers should shop around to determine where they can get the best deal, whether on a fintech platform or elsewhere.

How Fintech Loans Work

Dixit defined digital lenders in a report as “non-bank lenders who offer loans to consumers or businesses through digital channels. These lenders have unique funding models with liquidity provided by investors, credit facilities, securitizations or on-balance sheet liquidity.

According to the US Government Accountability Office, most fintech lenders now use a model in which loans come from bank partnerships that allow lenders to operate through bank charters rather than state lending licenses. This allows them to charge uniform interest rates nationwide and avoid state lending limits.

Then, fintech lenders buy these loans from banks and resell them to investors or keep them. A small number of fintech lenders issue loans directly and have lending licenses from multiple states. Dixit said few loans are truly peer-to-peer, meaning individual investors only make up a small portion of fintech loans.

To give an example, a leading fintech lender, Prosper, funds around 91% of its loans through what is called its “global lending channel”, or retail funding sources, while less than 10% of the funds come from what they call the “note chain”, noted Dixit. In 2020, the company could have had about $1.5 billion in loans, of which $1.4 billion was funded through the entire lending channel, he said. Peer-to-peer lending “is not a growing segment,” Dixit said, “at least not among the major players.”

Dixit noted that this is even true in the UK, where regulators have tried to foster peer-to-peer lending by treating it as a separate regulatory category and even creating a vehicle to encourage it as a retirement investment.

Digital lending is growing

According to S&P Global, “major fintech players have attracted massive capital and added new product lines and financial services features aimed at further entrenching customers to increase market share and improve profitability. Fintech companies in the United States attracted nearly $7.5 billion in venture capital funding in the second quarter of 2021 through 194 deals, up nearly 70% year-over-year. “The broader market is still strong, but it tends to be dominated by institutions rather than investors,” Dixit said.

The US Government Accountability Office attributes the growth of the fintech lending industry to several factors:

  • Technical innovations such as the use of new data sources allow them to improve response times, speed up loan approvals and facilitate financing.
  • They may cater to unserved market segments, such as people who need small business loans or people with limited credit histories who may not be able to get what they need online. through traditional banks.
  • In some cases, they can provide loans at lower interest rates than banks for debt consolidation, credit card debt, and payday loans.
  • Institutional investors are multiplying, expanding the funding available for lending.
  • Less regulation can provide a competitive advantage as they don’t face the same capital or exam requirements. This also carries risks for the market and could change as some members of Congress have moved towards increased regulatory scrutiny of the industry.

Ted Rossman, senior industry analyst at Bankrate.com, described market lending as a “niche market” that has stabilized after a somewhat bumpy start.

Digital loan and pandemic

The pandemic seemed to slow the growth of fintech loans, at least initially. “During the pandemic, this type of lending first declined when consumers stopped borrowing,” Laura Udis said. responsible for the small dollar market and the installment loan program at the Consumer Finance Protection Bureau. Udis pointed out that its information was based on third-party data, as the CFPB does not directly track this type of information. “I don’t think we have a good idea over the last two years of what the real impact will be.”

She noted, however, that it was “a very fast growing market through 2019”.

But the market rebounded in 2021 and reached higher levels than before the arrival of COVID, according to a report by Dixit for S&P Global Market: the environment, the increase in consumer demand and the decrease in Consumer stimulus measures have created a healthy demand for consumer credit. Retail-focused lenders have been able to operate in this favorable environment without facing some of the headwinds that (small and medium-sized business lending) and student-focused lenders have faced.

In 2021, the report notes, containment measures eased and government stimulus measures diminished as consumer spending increased. This has led to an increase in the demand for credit.

Some fintech lenders are having trouble

Lending Club, which pioneered the market in 2007, moved out of the peer-to-peer lending space, into more traditional financial services after acquiring Radius Bank last year. This followed a 2019 controversy in which the Lending Club paid $2 million in penalties to the Department of Justice and the Securities and Exchange Commission to resolve allegations that it misrepresented if borrowers met requirements. credit.

Then, in 2021, Lending Club was ordered by the Federal Trade Commission to return more than $10 million to more than 15,000 customers who were charged undisclosed fees. The company agreed to pay a total of $18 million to settle the FTC charges. Another digital lender, Avant, was ordered by the FTC in 2019 to return more than $2.7 million to customers who lost money due to “unfair and deceptive loan servicing practices.”

Is the loan between individuals a smart investment?

If you choose to invest in peer-to-peer loans, your rate of return will depend on several factors, including the credit rating of the borrowers you select for your investment. The main major player in the market is now Prosper. (Other players include Upstart, Avant and Marlette.) As for investors, “Prosper says no one who’s done more than 100 loans on their platform has ever lost money,” Rossman said.

The average return, Rossman added, is just over 5%. However, if you decide to invest in loans to people with riskier credit histories, you could see a return of over 14%. “It’s clearly not for everyone,” Rossman noted. But he said investing this way can appeal to the “altruistic” side of some people by providing a way to directly help other consumers.
“I wouldn’t advise putting more money than you can afford to lose in any of these peer-to-peer investments,” Rossman said. But it’s worth considering if you want to further diversify your investments and enjoy the rewards of helping individual borrowers, Rossman said.

Viktoria Krusenvald, CFO of Financer.com Ltd, was more bullish on P2P investing. It is, she says, “a great way for beginners to gain some investment experience and start thinking about their money analytically. It’s far less daunting than investing in stocks and most P2P platforms offer low minimum investment thresholds, giving everyone a chance to think about their money and their future. P2P can be something of a starting point that helps people develop a financial mindset and maybe after gaining some P2P experience they are ready to dive into the stock market.

Should you borrow from a digital lender?

Rossman said digital and peer-to-peer loans are “definitely worth considering” as a borrower. But he said, “You probably won’t get the lowest interest rate.” He encouraged consumers looking for loans to shop and include digital lenders in their menu of selections. Be sure to consider loan origination fees when making your decision.

“Different shots for different people,” Rossman said. “On the borrower side, you probably won’t get the best interest rate, but who knows?

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Payday Loans Statistics | The bank rate https://sailtheory.com/payday-loans-statistics-the-bank-rate/ Mon, 28 Feb 2022 20:04:08 +0000 https://sailtheory.com/payday-loans-statistics-the-bank-rate/ Here’s a breakdown of payday loan demographics by parental status. Parents are more likely to take out payday loans than non-parents. Parental status Percentage having used a personal loan non-relative 5% relative 8% payday loans in america The rates and terms of payday loans can vary widely by state. Some states don’t even allow payday […]]]>

Here’s a breakdown of payday loan demographics by parental status. Parents are more likely to take out payday loans than non-parents.

Parental status Percentage having used a personal loan
non-relative 5%
relative 8%

payday loans in america

The rates and terms of payday loans can vary widely by state. Some states don’t even allow payday lenders because these lenders can sometimes be debt traps. In states where payday loans are permitted, one of three levels of regulation may apply.

Permissive states allow high loan fees and APRs and generally have the fewest restrictions. Hybrid states tend to have more restrictions, either by having rate caps, restrictions on loans per borrower, or giving borrowers more payment periods to repay the loan. Restrictive states don’t allow payday loans or have a 36% APR rate cap, making it virtually impossible for payday lenders to set up shop in these states.

Payday loans are most common in urban areas and the Midwest, with 7% of urban residents and 7% of Midwest residents using them.

Why do people use payday loans?

Payday loans are intended for urgent or unexpected expenses, and it is generally advisable to avoid using them for anything else if possible. If someone is living paycheck to paycheck and falling behind on their bills, a payday loan to cover groceries or rent might seem like a great idea. Unfortunately, the fees incurred by these loans are usually higher than the loan itself, pushing borrowers further into the cycle of debt.

However, the majority of payday loan borrowers, 69%, use these loans for regular expenses.

Payday loans are commonly used to pay:

  • Utilities
  • Car payment
  • Payment by credit card
  • Rent/mortgage
  • Food

Alternatives to payday loans

If you’re in dire financial straits and want to borrow money quickly, payday loans aren’t your only option. Payday loans tend to start a borrowing cycle, and borrowers are likely to get in over their heads with extremely high fees. There are several alternatives to taking out a payday loan, including loans for lenders with bad credit, credit card cash advances, and personal installment loans.

These options have lower fees and longer repayment terms. Credit card cash advances have high APRs similar to payday loans, but they allow the borrower a longer period to repay the loan.

While personal loan interest rates will be higher for less qualified borrowers, personal loan rates are capped at around 36%, significantly lower than payday loan rates. Additionally, personal lenders tend to charge lower fees than payday lenders.

If you decide to take out a personal loan, be sure to do your research on today’s best personal loan rates and bad credit loans.

The bottom line

Payday loans can be extremely useful for those who find themselves struggling with unexpected expenses or falling behind in their day-to-day expenses. Payday lenders lend money to people who may not qualify elsewhere. However, taking out a payday loan usually leads to taking out more, leaving borrowers in a cycle of debt. Younger, lower-income borrowers are more likely to take out these loans, and people of color also tend to take out payday loans at higher rates.

If you’re considering a payday loan, make sure you know the payday loan rules in your state and that you’re getting the lowest APR you can find in your area. Also, beware of payday scams, as the lack of regulation in some states can cause lenders to take advantage of borrowers. However, if you can qualify, taking out a personal loan or credit card cash advance is a safer and less expensive option.

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