Posts Tagged ‘Short Term Loans’

Cash Advance With a Savings Account

January 24th, 2012



A cash advance with savings account is a loan that can be transferred to your account within hours of applying for it. A cash advance with savings account can range from $500 to $1000 and is given for a short period. This is very helpful in tiding over emergency situations.

Most people who apply for a cash advance do so because the banks refuse to lend to them due to their bad credit scores or they simply do not wait for several days just to get the loan approved. Many cash advance lenders provide online facility to allow customers submit their loan application easily through the Internet. This online facility has made the process so easy and fast, it is better than visiting the local pawn shop or borrowing from your friends when you are in need of emergency cash.

About The Procedure

When you apply for a cash advance the money is deposited directly into your savings account. This adds to the convenience of getting the loan as you will then simply withdraw the money through any ATM or transfer the funds to pay off your bills.

These loans usually charge a one time fee and the borrower needs to repay the amount on his next payday. The biggest advantage of cash advance is that it is very easy to qualify for them. You just need to have a proof of employment and a savings account.

Help during Financial Crisis

The flip side of cash advance is that borrowers tend to abuse the facility, which can get them into major financial crisis. These short-term loans can be really helpful in an emergency situation but it is very easy to get into a debt trap. If you keep on extending the repayment period, paying only the interest amount, you will end up paying much more than what you have borrowed.

Thus the rule of the game is to borrow cash only when absolutely necessary and that too only the amount required. And the loan must be paid back on the due date itself without prolonging the period. You must always keep in mind that these kinds of loans are pretty expensive. So they need to be paid off as soon as possible. Also you must shop around for the best possible rates if you want to save money.

Comments Off

Posted in Cash Advance

Tags:

Questions to Ask Before Getting a Mortgage

November 7th, 2011



Getting a mortgage is probably one of the most important financial decisions that you will make in your life. First, a mortgage involves some legality. Second, and more importantly, it involves a lot of money. Therefore, it is just rational for anyone planning to get a mortgage to exercise prudence especially in the earlier stage of the game.

It is indeed a worthy effort to shop around for products that would offer the best mortgage rate – Toronto or elsewhere. After all, since you will be “stuck” with this financial responsibility for long, might as well get the best one that you can obtain.

Before getting a mortgage, make sure that you have asked yourself the following questions. More importantly, make sure that you have answers to the questions below:

1. How much amortization can you comfortably pay?
Knowing how much money you are comfortable giving out on a monthly/yearly basis will help you in choosing your mortgage. Remember, this amount should not be too heavy for you – this should not take on a very large chunk of your budget as you will be paying for this loan for years.

If on the first year you’re already crippled with your payables, then you probably have not shopped for the best mortgage product available for you.

2. How much money can you set aside for down payment?
Usually, a mortgage would require a down payment. Therefore, this should be one of your considerations in choosing a product. How much money do you have on hand that you can spare as down payment?

The usual case is, the bigger your down payment, the lesser would be your interest rate. So when you can, make a bigger down payment.

3. Do you want a long-term or a short-term loan?
Short-term loans impose lesser interest rates but require larger amortizations. On the other hand, long-term loans impose larger interest rates but require smaller amortizations. Which of the two scenarios are you more comfortable with?

Experts recommend that in any mortgage or refinancing – Vaughan or elsewhere – a short-term loan is always better. So if you can afford to buy a house and pay if off right away, do it. Don’t prolong as you have a price to pay for that, literally.

4. Do you expect your income to increase over the next few years?
Mortgages can either be fixed-rate or adjustable. The former is one where the interest rate remains constant throughout the term. The latter, on the other hand, means that the rate changes over the years, as determined by a few economic indicators. In addition, the term of an adjustable rate mortgage is usually shorter compared to fixed-rate.

If you expect your income to increase within the next five years or so, then getting an adjustable rate mortgage is more preferable. Your amortization may increase but since you have an increasing salary to pay for that, then you will always do fine. Once again, a short-term loan is almost always better than a long-term loan.

If you were able to satisfactorily answer the questions posed above, then you are ready to shop for mortgage products. Most importantly, if you have answered the questions above with conviction and determination, then you are ready to get a mortgage.

Comments Off

Posted in Mortgages

Tags:

Avoid Pay Stub and Tax Refund Loans

March 1st, 2011



What could be better than getting an advance on your tax refund from the good ole IRS? Well, you better give some thought to the fees you are paying for that advance.

America is a capitalist country and home to many creative people. You can even find them in the field of tax preparation, a bland area if ever there was. The interesting service in this case refers to loans being made by tax preparers in concert with banks to taxpayers. There is nothing inherently wrong or illegal with such loans, but it is a case of buyer beware. The fees can be atrocious.

The loans at the heart of this article are called a couple of different things. The most direct name is a tax refund loan. A less direct name is a “pay stub” loan, in reference to the use of paycheck stub information to figure out how much money to loan you. While these loans are fine and dandy, they can come with some atrocious fees.

Short term loans are inherently expensive. Why? The financing party doesn’t have a lot of time to watch interest accumulate and collect it as would be the case for a home mortgage. Instead, they need to find a way to make money on the loan quickly. They do it with fees. In the pay stub loan business, the fees often equate to 10 percent or more of the loan. That is a pretty high percentage for loaning you money for a couple of months.

Before I go any farther, it is important to understand there is nothing wrong with lenders doing this. They have every right to make money and every right to charge you fees. The burden is on you to determine whether you really need that money now. If you do, then why don’t you go ahead and file your taxes early? I know that is a shocking idea, but there is nothing prohibiting you from doing so. The IRS will now wire you the refund, so you shouldn’t have to wait to long for your mulla.

At the end of the day, it is your decision as to whether you want to take a loan against your taxes. Some will and some will not. Whatever your decision, just make sure you go in with your eyes open to the fees.

Comments Off

Posted in tax

Tags: