Why Many Payday Loan Customers Use the Service to Cover Small-Dollar Expenses

Finance (Photo credit: Tax Credits)

Over the years, the usefulness of payday loans has continued to increase. For many of the population payday loans are used as a quick source of cash in an emergency. The unforeseen costs of seeing a doctor or having a needed car repair done can force many to overdraft their bank accounts or exceed the credit limit of a credit card. Many still write that check or charge on their credit card. Your bank gladly makes your check good and charges you a fee of $40 or more. The credit card company also rewards you with an over credit limit fee and raises your monthly APR.

Even with all the negative press payday loans get, they are actually cheaper than going into overdraft, for short term cash needs. The average fee for $100 of credit is $17.60 at a payday loan compared to bank overdraft fees of $30-$35 in 2012(FDIC).

Overdraft fees are more of a problem with people who carry a low balance in their account. Not going into overdraft and saving the penalty fees associated with it can add up to a real savings over time.

"When used on a recurring basis for small amounts, the annualized percentage rate for fee-based bounce [overdraft] protection far exceeds the APRs associated with payday loans."

Sheila Bair

Former Chairman

Federal Deposit Insurance Corporation

Like all financial obligations, payday loans need to be taken seriously by the borrower and the lender. How do you know if your lender is a legitimate concern and obeying the laws for payday loan lenders in their state.

Go to the website of the lender you want to use. Look for an "About Us" link. An upstanding company has extensive information about themselves. Look for information about their license to operate in the state. Do they provide complete contact information. Look for links and phone numbers of state regulatory departments with contact information. Use the information and call the states regulatory division and ask questions. 

Also look for the emblem of the Community Financial Services Association of America. This association sets guidelines and best practices that ensure responsible conduct among lenders, protect borrowers’ rights, and encourage self-governance of the payday advance industry. Their website has a hotline where you can voice concerns and problems you are having with the lender.

Identifying Value in Real Estate Property

Property market (Photo credit: Alan Cleaver)

It has been stated over and over that the key to real estate value lies in location. But this has misled many people into believing that there is really no other factor to consider when appraising the value of real estate property. There are a number of factors that must emerge when you consider the value of any real estate property. 

One of the chief factors that you must bear in mind is the age of the building. An older building can be a financial drain rather than an asset. Older buildings tend to require more laborious and expensive renovation projects and are more likely to fail inspections. These problems include faulty plumbing or plumbing systems that are now outdated and need to be replaced. The same goes for electrical wiring. Plumbing and electrical overhauls can be very expensive especially since they typically require that the walls be cut open to allow the contractor to access the pipes or wires.

But sometimes an older home can be a jewel. Older homes that are steeped in history can be potential money makers. Ensure that the claim to historical fame is legitimate before making a purchase however, because you want to ensure that when you invest in refurbishing the building you get your returns. These types of golden opportunities are far and few between however and you should count yourself lucky if you stumble upon this type of treasure.

Carefully look at the infrastructure that comes with the home. Look for things like alternate power supply solar water heaters and ornate decorations. Consider elements such as the stairs. The stair design adds flair and elegance to the inside of a building. But it also serves another purpose. It indicates how much time and energy has been put into the building. An attractive decoration goes a long way in enhancing the resale or rental value of the property.

Appraise also the land space surrounding the home. Is there a wide expanse of land? Or is the home close to others in the community? Ample land space leaves options such as a pool or expansive outdoor entertainment spaces on the table. Once there is space the potential to develop the property is limitless and simply depends on your vision and budget.

One of the first things that visitors notice about a home is its size and this element has a serious impact on the value of the property. A smaller house will leave you with the potential to do less. If you are planning on hosting large gatherings at home or having a big family, this home won’t give you the right bang for your buck. On the other hand if you find a fairly sized home you may be able to creatively use a section to make money. Depending on the neighborhood rules you may be able to manage and run a home business from one room or a large garage. Note also that a large garage may be a luxury that eludes you with a more expensive and smaller home, though it may be located in a prime real estate spot.

So yes, the location plays a significant role in the price of a home and its value. But don’t be fooled into thinking that it is the only factor worth considering. There are many other factors that help to determine what benefits the property will have for you and your family and chief among those factors should be the value that the house has for you when you consider your needs or your family’s needs. So essentially, the true value of the house goes beyond the cash required to make the purchase.

Karl has been using his background knowledge as a real estate investor to inform millions across the globe about wise real estate investment choices. He enjoys spending time outdoors and engaging in meaningful conversation.

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Home Appraisals: What You Need to Know

How Real Estate Appraisals Are Really Done (Photo credit: Dave Dugdale)

A home appraisal is used to determine the value or worth of a property. It is mostly used to determine how much a lender can give the buyer for the purchase of the property in question. It is an expert opinion to protect the financier from getting stuck with a property worth less than the invested amount. Don't mistake the appraisal process with an inspection process. An inspection involves noting potential problems that can prove costly to remedy in the future, while an appraisal uses the general state of a property to determine its worth.

What to Expect During the Appraisal Process

Here is what you should expect during a home appraisal:

Full Access

Expect the appraisers to want full access to your home. The appraisers will want to look over all areas including the garage, attic or basement. This is done to determine how well the property was constructed and how well it has been maintained.

Photographs

The appraisers will also take a lot of photographs of your home, both the interior and the exterior. The photos will be shown to the lender as proof of the condition of the house.

Overview of the Home

You should also expect the appraisers to be interested in the general overview of the house. This includes foundations, improvements, type of rooms, number of rooms and even its age. This overview, however, will not be as thorough as the inspection process.

Square Footage Approximation

The appraisers will also be interested in the total square footage of your home. In this estimation, the non-living areas are usually excluded, but just jotted down as side estimates. Examples of non-living areas include porches and garages.

How to Prepare Your Home for an Appraisal

To ensure that your home is properly appraised, and that the appraisers see its real value, you should prepare your home beforehand. Here is what you can do to help:

Improve Your Curb Appeal

Your front yard makes the initial first impression for those who come to your home, appraisers included. This means if you wish to make your house presentable and well maintained, you cannot ignore the curb appeal. Work on the yard area and the general appearance of the exterior. Ensure that you get rid of any mold and mildew that may be present, clean the gutters and remove overgrowth on the sidewalks. While curb appeal may not necessarily be used to appraise the property, it can be useful in affecting your appraisers' attitude even before they examine the house.

Note all the Updates

You should note all the updates and improvements you have made to the home and show them to the appraisers. This list should preferably cover all the updates done within the last 15 years. If you have their approximate dates and costs, it would be helpful too. Some appraisers also say that you should also include the noteworthy features of your home. Appraisers are professionals, but they are still human and it is easy for them to miss something.

Note Neighborhood Changes

Some people might say that this is an appraisers' job, but it still doesn't hurt to give them a hand in it. After all, they may not be aware of the next door property sold without the involvement of an agent? Data from such a sale may not be readily available.

Paperwork

You should have the necessary paperwork ready before the appraisers arrive. This includes things like certificates of occupancy, tax bills, financial statements and others that may be needed. If there are reports from recent appraisals, you should present them too.

Most appraisals are done when a property is to be sold, but that is not the only occasion that calls for an appraisal. Most insurance companies request a home appraisal before determining homeowners insurance rates. Irrespective of the reason for the appraisal, you should prepare for it using the above tips.

Adam Vaught has extensive experience in the insurance industry. He enjoys sharing his knowledge on appraisals to readers of various insurance and personal finance blogs.

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How To Upgrade Your Finances In 2013

New year symbolizes a beginning of something new that is about to happen. That is the reason why so many people look forward to this holiday with a hope for a better future. Both adults and children believe in miracles and hope that next year will bring positive changes. Taking into consideration the economical statistics, most people would like to begin restoring their personal finances next year, though some accept the problem deeper. Some experts admit that life is about making little changes to it and the entire picture will be transforming into the likable one. If you want to upgrade your life in 2013, do not be afraid to face this fact and start moving forward to the changes. Read this post to add some points which are meant to change all aspects of your life into the better. 

Eating Out 

If you want to save more money, stop eating out at cafes, bars and restaurants. Surely, it is quite beneficial for its owners but not for your pocket. Won’t it be savvier to make lunch yourself at home that will take just ten minutes instead of wasting $10 every day? Start saving now and you will not even notice how a decent sum of money will appear in your emergency fund.

 

Be Imaginative! 

Do not forego with simple wishes and impulsion. If you want to have a special evening with your beloved one, do not give up this idea. Use creativity and imagination for making up a romantic scenery, as transforming your kitchen into a restaurant with candlelight and good dishes. Having a good time doesn't mean spending lots of money, keep that in mind. 

Cook more 

Firstly, it is cheaper to cook yourself at home, instead of buying everything prepared in cafes or supermarkets. Therefore once you cook, make more food for freezing it and using later. Most products do not get spoiled and renew their taste when heated. 

Set Long-term Goals 

Consider an issue with saving money a tough one and treat it with all the solemnity. Do not think that one bracelet does not cost a lot, if you sum up all expenses you will be surprised how much you literally waste on fiddlesticks. 

Create an Emergency Fund 

We try plan everything as much as possible, but emergencies still happen. If you do not have any savings then you can borrow from friends or family members or apply for no credit check loans to cover unexpected expenses. But try to save money and put it into the emergency fund. Then there will be no need to borrow and that will make you feel financially independent.

 

Summing up 

New year can meet all your expectations and wishes, just help them come true and be maximally purposeful!

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Merry Christmas

Merry Christmas and Happy New Year to all! 

Risk Factors of Small Business Loans: Solutions to Reduce Risk

Financing is the act of funding a business activity that hopefully will lead to profit. That is the book definition written down by students or people that never had the pleasure of running their own business. For those who have gone through the ordeal however, financing might take on a completely new different meaning. 

When someone talks about financing a business, what usually springs to mind is the foundation of startups. That is not true since businesses regularly seek financing. The problem occurs when there is difficulty in finding sources of finance.

The credit crunch in 2008 was more than a revelation for many entrepreneurs. Most of us never thought about the risk factors in small business loans. Small businesses account for the majority of new jobs being made in America and is to credit for 58% of its employment. It’s funny how the majority of the population has no clue as to what happens in the back end process of small business financing. For starters, let’s look at some of the risks an entrepreneur would have to involve himself with to finance his idea or company.

Personal Money

When a business owner wants to start something, his first action is to reach down his pocket. Ironically, if the funds aren’t enough, which in most cases is the case, this is also the first factor that banks would consider. Banks need to know how much of your personal money you are willing to hang on the balance to factor in the amount of loan would they approve you for.

Unfortunately, when the business initiative you’ve financed flounders, it’s not only the loan amount that will get lost, but also your personal savings you initially laid out for the groundwork. 

Collateral

Collateral may be in the form of a house, a car, an equipment, real estate or anything that the lender may find of value to guarantee the repayment for a loan. All is well when you’re able to repay as planned, but when you’re trying to make ends meet the collateral is in danger of being possessed by the lender as repayment. 

Credit Score

We all want our credit score to be untarnished. Sadly, a good credit score is the first thing to go when you fail to make payments on time with your lenders. 

Some Effective Solutions to Lower the Risks

Create a Budget That Includes All Incomes and Expenses –to avoid failing on payments, always know where your money is going. Great entrepreneurs are often described having this trait. This is true no matter how incredible their net worth has become.

Start a Savings Meant for Setbacks – I’m sure you can set aside some part of your business’ income as an emergency fund. This works on all business scales. You’ll definitely have to afford it, because what you will not be able to afford is when your small business loans go on default.

Loans from Family and Friends –Although loans from loved ones are usually filled with benefits, this should be the last resort as it might destroy your relationships.

Author Bio:

Paydayloan.co.uk is the online lending company to go to when confronted by a brick wall. We grant people access to quick cash the moment they need it. For further information on our services.