Canada Finance Blog

The difference between predatory lenders and reputable payday lenders

When it comes to payday lenders, the truth is that a few predatory lenders have given most payday lenders a bad name. This is unfortunate because payday loans can fill a critical need for cash that many people can or need to take advantage of from time to time. Designed to provide borrowers with a small amount of money that can be used for a short period of time, these loans offer borrowers an ideal way to get by when they are short on cash. If you need extra cash today, you should be aware of the differences between predatory lenders and reputable payday lenders.

Fully Disclosed Loan Charges

Reputable payday lenders are those that make loans within the constraints of the law. All interest rates and loan charges are fully disclosed to you, and they are disclosed in a format that is easy for you to read and understand. While you want to look at the rates and fees associated with a loan before you apply, you also want to read reviews posted online about payday lenders. Pay attention to reviews that talk about lenders charging extra fees that were not originally disclosed to them. This is a sign of a predatory lender.

Responsible Lending Practices

Reputable payday lenders make a point of following responsible lending practices. One of the complaints that others have about payday lenders is that they create a cycle of debt that is difficult for a borrower to break out of. These loans as well as interest charges and fees are generally due in a lump sum payment, and some lenders have allowed borrowers to pay their loan balance off with a new payday loan. The new loan balance essentially will add new interest charges and fees onto the original loan’s balance, interest and fees, and this creates a financial hardship for many people. Responsible lenders, however, fully disclose the amount that is due on the loan due date, and they do not allow the loan to be repaid with a new payday loan. In fact, the most reputable payday lenders limit the number of payday loans that you can apply for within a certain period of time.

It is true that some payday lenders seemingly take advantage of the financial misfortune of some, but others have structured their loan programs and terms in such a way that the payday loans are truly beneficial. As you shop for a payday lender to work with today, pay attention to these factors. To see what a reputable lender looks like, check out My Canada Payday. You can visit their homepage to see all their details. Note their full and frank disclosure of all interest and fees, and their storefront location where you can talk to them in person instead of a faceless voice on a phone.

Making The Most Out Of Your Savings Account

A savings account that’s has regular deposits can build up significantly over time. Unfortunately, there will always be events or accidents that will require you to take out a portion every now and then. For most people, this is unavoidable, but there are ways to minimize the withdrawals in order to maximize the account’s growth.

Instead of opening one account, you should have two or three different ones, each of which has a specific purpose. Aside from the general account, there should be one for emergencies. This can be for unexpected home repairs, medical bills or other events that cannot be foreseen.

Another account should be for holidays and vacations. While it’s important to save up for the long run, you should also treat yourself every once in awhile. This is the only account from which you can indulge yourself and buy what you want without feeling guilty afterwards. Your other accounts should be free from reckless spending.

Determining how much to put in for each category will depend on your own budget. Remember that expenses may come irregularly, so this month you might have to pay off a 500 dollar loan, while next month you only need to pay off your bills. Whether it’s only one dollar or 50 dollars each month, the most important consideration is to start now, and slowly adjust as you find your way around each item.

Points to Remember While Searching for Home Financing

 

After finding the right house to live in, you need to search for a loan to buy it. Normally, people don’t have enough money saved up to buy a house. They approach either a mortgage finance company or an established bank for home financing. Both options have their own merits and demerits. Let us now look at the advantages and disadvantages of securing a loan from a bank and financing by a home financing company.

The Bank Getting a loan from your local bank will be easier and faster since the bank already has all the information it needs to grant you the loan. The bank probably knows your credit historyand your ability to pay back the loan. Since you already have dealings with the bank, your loan application will be approved in your favor. The rate of interest on your loan will also be lower if you take the loan from a bank. On the other hand, if you go to a home financing company, you have to go through a mortgage broker and you have to produce a number of documents to prove your identity. Completing all the formalities required by the home financing company might waste some of your valuable time. The rate of interest will also be higher than that of the bank. If you decide to go with the mortgage broker, you will have no choice other than accepting the loan provider chosen by your loan broker, irrespective of the terms and conditions of the loan. The Mortgage Broker Some mortgage brokers act in the best interest of their clients and they search for the lowest rate of interest and easiest terms and conditions for loan repayment. It means that you can shop around for the right type of home finance. If you choose a mortgage broker, he / she will do everything necessary to secure the mortgage. You don’t have to waste your time and energy. If it is a bank that you have chosen to finance your home, you have to personally report to the bank during business hours. You have to accept all the conditions laid down by the bank. The final choice is yours. If you are short of time and don’t know how to secure a loan, choose a mortgage broker. If you can spare some time and go to your friendly local bank, the bank will be a better choice. Before taking a final decision, consider both the options thoroughly.

 

The Ideal Way to Settle Your Credit Card Debts

 

Being in debt is a common phenomenon and credit card debts constitute the major part of total debts. It looks so funny when we find people searching for different ways to settle their credit card debts when they have sufficient money in their savings account. Some say that they don’t like to withdraw money from their savings account because they have saved up the money for a specific purpose and that money will be utilized only for that purpose. Instead, they try to settle their debts with money either from their retirement benefits or from a mortgage. Let us now look at the relative advantages and disadvantages of using and not using the money that is lying in their savings account.

If you are planning to withdraw money from your IRA account before the stipulated time, you are liable to pay penalties. To make matters worse, the amount you will get after retirement will be too little. Remember that you will have no other source of income after retirement and the only income to pull on the rest of your life is the money in your IRA. So, leave it untouched and let it be there for your old age. A viable alternative is to take a loan by mortgaging your home. If the mortgage loan carries a lower rate of interest than the credit card debts, you will be a gainer. But you are assuming a greater risk by mortgaging your home. In case you are not able to pay back the mortgage loan, your home will be seized by the mortgagee. In the case of not paying your credit card debts, the worst you can expect to happen is a hit on your credit score. It is, therefore, advisable to take a mortgage loan only if you are confident that you would be able to pay back the loan on time. The best way to pay off your credit card debts, of course, is to use the money in your savings account. Savings accounts carry a very low rate of interest and it doesn’t make sense to keep your money in your savings account while you pay a very high rate of interest on your credit card debts.

 

The Far Reaching Effects of the 2008 Financial Crisis

The 2008 financial crisis may be over, but its effects are still being felt not only here, but all around the world. The US housing market posted its lowest foreclosure levels this year since the crisis, which means that any gains elsewhere will be steady, but painfully slow.

Across the Atlantic, the European Union is facing an ongoing crisis of its own. Greece is on the verge of a meltdown while Spain’s government is facing a hefty backlash from its citizens because of high unemployment rates which in turn has reduced the country to massive borrowing. Thankfully, the EU has propped up these countries for the benefit of all member states, but a long- term solution is still nowhere to be found.

Japan is also experiencing an economic slowdown. While the country enjoyed an accelerated level of economic growth in the 1990s, today there is a chance of a turnaround because of its saturated financial market. Their own citizens have become wary of extended borrowings which has forced the Japanese government to look elsewhere.

How do these international financial matters affect the average consumer? There’s no way of telling how the pieces will fall exactly, but as with the previous financial crisis, an uncertain future may bring higher prices and more unemployment if these governments again become too complacent.