A payday loan is a short-term loan, usually for a relatively small amount, that a consumer will take out in order to cover immediate or emergency expenses. Traditionally, payday loans have been provided by brick and mortar companies. Today, however, there are more and more Internet-based payday loan providers than ever before.
These loans are often used by people of low to moderate income as a way to pay for an expense prior to their next paycheck. An Internet payday loan is basically the same type transaction that follows the same basic principles, the only difference being that it becomes a service integrated into the internet.
As more and more service and shopping businesses have moved online, the payday loan industry has followed suit. In fact, many financial transactions have moved online as well. Whether it’s banking or managing a retirement account, you can do pretty much anything online you could do in person.
Internet-based payday loans, like other businesses based on the Internet, provide some specific benefits to their users. First, the service is more accessible. Location is no longer a problem, as the customer can get the payday loan right from their home. It’s also easier for the lender, as there are fewer expenses involved in running the Internet service than there are in maintaining a brick and mortar store.
The Internet also gives lenders access to finding more clients via their online presence. They can utilize promotional methods that are often more readily available and less expensive than traditional advertising.
When you get an Internet payday loan, the application is processed electronically. In some cases, the borrower may be required to fax in paperwork such as a proof of income, but this isn’t always the case. Internet payday loans are also easier to track, and can save all sorts of time both for the person applying for the loan and for the loan company.
There are some people that advise against Internet payday loans. Like other online transactions, there are risks involved. You need to be certain of who you’re dealing with before you actually apply for an Internet payday loan because you don’t want to become vulnerable to abuse or identity theft.…
Increasingly, there are more and more institutions cropping up who are willing to make payday loans to low income Americans with poor or no credit scores. Many of these institutions are traditional banks, however, and not payday lenders, thanks to a program sponsored by the FDIC.
There are a large number of people in the low-income ranges that may be able to benefit from smaller dollar loans. Traditionally, these folks have turned to payday lenders. Payday lenders meet a very specific need. However, they have their critics as some people claim payday loans are predatory or unreasonable.
Today, there are 31 commercial institutions in 26 states that are participating in the new FDIC program. This program offers small dollar loans of less than $2,500 for a short term. While some of these banks have been offering these kinds of loans for some time, many of them are new and have started offering the loans as a part of the response to the FDIC program.
The goal of the FDIC program is to assist between 80 and 100 million Americans avoid either payday loans or overdraft protection programs with high fees. The program will be completed this year, and the FDIC will be releasing a report with its results in February of 2020.
The small-dollar borrower can be an attractive new customer base for the banks. These are designed to be an alternative to the high rates that consumers pay with other options. Consumers can then use these small dollar loans to help build their credit scores.
The average term for these loans is around nine months. The interest rate is usually between 14 percent and 18 percent APR. This is significantly lower than the alternatives of overdraft protection or of payday loans.
With overdraft protection in a bank account, consumers will overdraw their account and be charged a fee of $35 or more for the overdraft, no matter how much the draw is. This amounts to around $35 billion each year in the banking industry. Most of those fees come from account holders with low income, who intentionally overdraw their account as a sort of short term loan to cover their living expenses. Overdraft is something of a line of credit for some people.
Whether these kinds of FDIC loans will overtake the popularity and convenience of payday loans, of course, remains to be seen.…
National Bureau of Economic Research ReportAccording to a study conducted by the National Bureau of Economic Research, five out of ten Americans would struggle to raise $2,000 should some straitened circumstances come their way. Additional expenses, such as an unforeseen home repair or unexpected auto accidents, sudden legal expenses or a major medical bill, would definitely take a toll on their monthly paycheck.
About 28% are “certain” that they could not raise $2,000 if given a limited time to pay off unexpected bills. Moreover, 22% said they are “uncertain” whether they can cope with an extra $2,000 of additional debt.
Only 25% of Americans are sure that they would be able to raise extra funds.
Of the 1,900 respondents, the majority would rely on the financing strategies available for them. Financial schemes such as bank loans or cash advances serve as a lifeline during such financial struggles.
More specifically, the study shows that 60% would have to use their savings, 34.2% would have to rely on their families and friends for financial support and 29.5% said they would consider applying for financing schemes such as an unsecured loan, reverse mortgage, or use their home equity and their credit cards. Tightening on personal and family expenditure is also considered as an excellent way of raising emergency funds.
The National Bureau of Economic Research has also conducted the same survey on several other countries, including the Netherlands, Portugal, Italy, Germany, the United Kingdom, Canada and France. Interestingly, America is listed among the countries least able to cope with financial emergencies. The list also includes Germany and the United Kingdom, which both have 50% ‘financially unprepared households.’
On the other hand, people from the Netherlands, Italy and Canada are best able to cope with unexpected financial problems. An impressive 57.7% of the respondents from the Netherlands said that they would certainly be able to raise $2,000, at a pinch.
The fact that on a rainy day almost half of the residents of USA don’t have even $2000 to sustain, is an alarming situation.…
Coffee Prices Versus Gas PricesCoffee lovers may not notice it, but coffee prices have overtaken gasoline prices in the past year. As of April this year, a one-pound can of ground coffee costs $5.10 which is 40% more than the previous year, said the US Department of Labor. In contrast with oil prices, one gallon of regular gasoline averages $3.83 which is 37% more than the previous year.
With the current trend in the oil market, fuel prices are anticipated to stabilize, whereas coffee prices could continue to increase for some time. Currently, the cost of unroasted beans is on an upsurge. In fact, coffee producers were trading $2.61 per pound this week, almost twice as much as last year.
According to several top coffee producers and distributors, they are considering another price increase on their U.S. coffee products this week. The J.M. Smucker Co., producer of Folgers and Dunkin Donut coffee, is set to announce an 11% price increase, its fourth this year. Similarly, other coffee manufacturers such as Peet’s Coffee and Tea Inc, and Kraft Foods Inc. are considering a price hike.
Following the market’s upward trend, Starbucks Corp. has just announced a 17% price increase on all packaged coffee products in the US and 6% in Canada. This increase follows the 4% increase imposed in 2020. Starbucks has also increased its retail price on packaged coffee sold on the market.
Despite the soaring prices, coffee remains essential.
Consumers who can’t say no to coffee would rather look for alternative brands that cost less. After all there are other brands aside from the four leading coffee labels – Seattle’s Best, Godiva, Dunkin’ Donuts and Starbucks. Obviously, cheaper coffee labels enjoy the current trend.
On the production side, the International Coffee Organization has noted an increase by 8% on the coffee harvest due to the support from the Ivory Coast, Ethiopia and other coffee-producing countries. However, some of the major coffee exporters, such as Indonesia, have experienced smaller crops. Poor harvests are often attributed to environmental changes such as flooding, drought and other serious weather conditions. With the changes in the environment and the poor harvest, coffee prices continue to soar.
Coffee is just part of the bigger picture. More and more basic necessities are moving upscale. Although the average inflation rate is not as high as in the 70s, it is expected to continue its upward trend.…
It is understood that everyone has a routine that includes work, family and recreation. But when it comes to balancing them together, most of us falter. Even after returning home after ten or eleven hours of tiring office work we have the same files, pending work and bosses running through our heads. With more and more competition for better jobs, people have started compromising on vacations and breaks.
While people need, and are entitled to, vacations, some financial experts have a different perspective about people not availing vacations in the United States. They feel that taking vacations is one of the major reasons that gets Americans to spend more, save less and get into debt. So by forfeiting vacations, many Americans are trying to save more and spend less.
As a result a lot of Americans tend to forgo their vacations and work instead. As a matter of fact, only about 38% of Americans were able to use all their vacation time according to a Expedia survey. Also, recent years have been a great challenge for many employees. People had been laid off and many were trying to keep their jobs and cope with tough times. People were ready to work extra hours without additional benefits just to keep their jobs. With such a situation existing, very few could think of actually going on a vacation.
Now that the economic situation has stabilized a little bit and the economy has evened out, people have started planning for vacations; at the very least, a short break to reconnect with their family and friends. However, because of the way the work situation has been, people still feel that they cannot get away completely from their work. They carry their laptops and notebooks even on vacation to check on their emails and stay connected with work. According to a recent Rasmussen survey, 72% of the employees said that they check in with the office regularly even when they are on a vacation!…