Loan Sharks

Personal Finance 4 The People is pleased to team with others who are able to share their expertise in various areas. We hope to combine our efforts to bring a greater financial effort inorder to help you reach YOUR Financial Independence. Today's guest post comes to us from the Loan Shark Guide.


      In case you haven’t been keeping a close eye on the news lately, let me be the first to bring to light a breed of financiers who are running people lives.  These illegal financiers, otherwise known as loan sharks , are becoming more of a problem not only in the UK and abroad, but also here in the United States.  For the most part, individuals and families who are in desperate need in money, often times fall prey to these lenders.  In the U.K, for example, there is a task force whose sole purpose is to target and eliminate these financial predators.  Lending money illegally, without a license and at exorbitant interest rates, is a crime punishable by a lengthy prison sentence.

How Do Loan Sharks Operate?

     These illegal money lenders prey on people who are in desperate need for finances, and whilst they may loan the money to an individual, the interest rate is all too often unbearable.  The person taking the loan out will often pay more toward the interest than toward the principle, which will leave the debtor in a position that he/she, in effect, can never pay off the loan because all of the payment is being applied to the interest rates.  The interest rates charged by these lenders can often times be as high as 4,000%.  How can anyone ever expect to pay off a loan with high interest rates such as that?

What Are The Alternatives?

     If you have bad credit and cannot obtain a loan from a bank or other legitimate lending institution, then your best bet is to find a low APR loan. It depends on what you need the loan for.  Unfortunately, if you need a personal loan higher than $2,500, you’ll most likely be out of luck.  If you need a loan under $2,500 then your best bet is to find a payday loan company that has a low APR, and also gives you ample time to repay the loan.  Be sure to compare payday loan providers when looking for these types of loans.  Whilst getting a payday loan isn’t the best option in most cases, these types of loans are usually the only financial option for many people who have ruined their credit.  Quite a few people have been known to obtain payday loans from different companies at the same time, and by doing so, they unfortunately create more financial misery for themselves.

     If you find yourself in a situation where you need a loan, consider your options and do not take the first loan that comes along.  Remember to compare payday loan providers, as each provider has different interest rates.  Also remember, that if anyone ever approaches you and offers to loan you money (without being licensed), then they are loan sharks.  Never borrow money from these individuals or groups and report them to your government.  As a civilization, we need to help others less unfortunate know the signs of borrowing from loan sharks.  These types of lenders are dangerous and should never be considered an option.

Loan Sharks

Personal Finance 4 The People is pleased to team with others who are able to share their expertise in various areas. We hope to combine our efforts to bring a greater financial effort inorder to help you reach YOUR Financial Independence. Today's guest post comes to us from the Loan Shark Guide.


      In case you haven’t been keeping a close eye on the news lately, let me be the first to bring to light a breed of financiers who are running people lives.  These illegal financiers, otherwise known as loan sharks , are becoming more of a problem not only in the UK and abroad, but also here in the United States.  For the most part, individuals and families who are in desperate need in money, often times fall prey to these lenders.  In the U.K, for example, there is a task force whose sole purpose is to target and eliminate these financial predators.  Lending money illegally, without a license and at exorbitant interest rates, is a crime punishable by a lengthy prison sentence.

How Do Loan Sharks Operate?

     These illegal money lenders prey on people who are in desperate need for finances, and whilst they may loan the money to an individual, the interest rate is all too often unbearable.  The person taking the loan out will often pay more toward the interest than toward the principle, which will leave the debtor in a position that he/she, in effect, can never pay off the loan because all of the payment is being applied to the interest rates.  The interest rates charged by these lenders can often times be as high as 4,000%.  How can anyone ever expect to pay off a loan with high interest rates such as that?

What Are The Alternatives?

     If you have bad credit and cannot obtain a loan from a bank or other legitimate lending institution, then your best bet is to find a low APR loan. It depends on what you need the loan for.  Unfortunately, if you need a personal loan higher than $2,500, you’ll most likely be out of luck.  If you need a loan under $2,500 then your best bet is to find a payday loan company that has a low APR, and also gives you ample time to repay the loan.  Be sure to compare payday loan providers when looking for these types of loans.  Whilst getting a payday loan isn’t the best option in most cases, these types of loans are usually the only financial option for many people who have ruined their credit.  Quite a few people have been known to obtain payday loans from different companies at the same time, and by doing so, they unfortunately create more financial misery for themselves.

     If you find yourself in a situation where you need a loan, consider your options and do not take the first loan that comes along.  Remember to compare payday loan providers, as each provider has different interest rates.  Also remember, that if anyone ever approaches you and offers to loan you money (without being licensed), then they are loan sharks.  Never borrow money from these individuals or groups and report them to your government.  As a civilization, we need to help others less unfortunate know the signs of borrowing from loan sharks.  These types of lenders are dangerous and should never be considered an option.

Support The Student Loan Forgiveness Act of 2012

The Student Loan Forgiveness Act of 2012 (H. R. 4170) was introduced by Rep. John Kline (MN-2) to increase purchasing power, strengthen economic recovery, and restore fairness in financing higher education in the United States through student loan forgiveness, caps on interest rates on Federal student loans, and refinancing opportunities for private borrowers, and for other purposes.

Key Objectives:

Make student loan repayment both simple and fair

If you have already been making payments on your student loans, your repayment period would likely be shorter than 10 years. The amount you have already paid on your student loans over the past decade would be credited toward meeting the requirement for forgiveness.

The bill would ensure low interest rates on federal student loans by capping them at 3.4%.

The bill would reward graduates for entering public service professions like teaching and firefighting. It would also provide incentives for medical professionals to work in underserved communities. It would reduce the Public Service Loan Forgiveness requirement to 5 years from its current 10 years. The bill would allow existing borrowers whose educational loan debt exceeds their income to break free from the crushing interest rates of private loans by converting their private loan debt into federal Direct Loans, then enrolling their new federal loans into the 10/10 program. If you make payments equal to 10% of your discretionary income for 10 years, your remaining federal student loan debt would be forgiven.

Jumpstart the economy and create jobs

 

The bill would create jobs by increasing consumer demand for goods and services.

Send a lifeline

The bill seeks to ensure that no one will be pushed into poverty because of a stroke of bad luck.

Americans who are behind on their payments would be eligible to enroll in the new program and bring their payments down to 10% of discretionary income.

Promote financial responsibility in higher education

Provisions of the bill itself would be financed by projected savings from Iraq and Afghanistan Overseas Contingency Operations; the bill would not affect funding for existing student aid programs.

What does it all mean?
The Student Loan Forgiveness Act of 2012 would mean a way out from the student loan trap many of us are trapped in (me included). This Act would help lessen the pain of student loans for those who believed if they received the education, they would receive the jobs. Many, like myself, owe so much in student loans that they literally rule my life. I work a job I'm not passionate about because it pays well enough to pay my loans and still live.

"This provides student loan borrowers with a second chance, those who have been struggling financially," Clarke told his colleagues on the floor of the House. " And by cutting this debt, this frees up their money to invest on their own. That will create new jobs throughout this country.

The legislation, HR 4170, would amend the Higher Education Act of 1965 by giving borrowers the option to enter the 10/10 loan repayment plan. Discretionary income, in this case, appears to be defined as any annual income exceeding 150 percent of the poverty line for an individual or family.

The legislation also would cap interest rates on federal loans at 3.4 percent, and allow graduates who enter public service professions -- such as teaching and firefighting -- to have their loans forgiven in five years instead of ten.

"While current borrowers would be eligible for full forgiveness under the plan, future borrowers would be subject to a $45,520 cap on forgiveness (based on the average overall cost of a four-year degree at a public university). The aim is to incentivize students to be mindful of educational costs and for colleges and universities to control tuition increases." While current borrowers would be eligible for full forgiveness under the plan, future borrowers would be subject to a $45,520 cap on forgiveness (based on the average overall cost of a four-year degree at a public university).

The aim is to incentivize students to be mindful of educational costs and for colleges and universities to control tuition increases. Many Americans who have fallen behind on payments due to illness, unemployment, or divorce face continually rising interest rates and compounding fees with no hope of escape. to student borrowers who have fallen on difficult times The bill would increase millions of Americans’ purchasing power by forgiving debt, reducing loan repayment burdens, and cutting fees and interest rates. This would free many of these Americans to invest, buy homes, and start businesses.

Support The Student Loan Forgiveness Act of 2012

Be Careful! It's a Trap!

Pay Day Loans suck! They are a trap designed to hold you hostage for as long as possible. I would even say Pay Day Loans and those who run Pay Day Loan places are evil.



They prey on those who need financial assistance and education the most. Offering money with high interest rates attached to it. They offer no financial advice and serve no real purpose, besides preying on the misfortune of others.

Pay Day Loans become a cycle. Once a loan is taken out, the interest makes it very hard to get out from under the loan. Next thing you know you are giving the loan place your whole pay check to pay for the loan, or loans, you have taken out. Then you have to take out more loans just to survive, until the next pay day when you use that check to pay off the loan you took out the pay day before. It's a trap!


All you are doing is handing over YOUR hard earned money!

I know times get tough and we have to do what we have to do to make it to another day, but what good do Pay Day Loans do? They don't teach people about financial management. They don't offer a way out of debt. They do continue the cycle of poverty.

Look around and see where the Pay Day Loan places are. Who is their target? More often than not, you will find Pay Day Loans places in areas where the community is already in financial trouble. You find them in minority neighborhoods. You find them in cities close to rural areas. Why? Because those are the people who need financial education the most due to their low economic standing.

The New York Times had an article on Pay Day Loans awhile back and a few parts really stood out to me:

"While such lending is effectively banned in 11 states, including New York, through usury or other laws, it is flourishing in 39 others. The practice is unusually rampant and unregulated in New Mexico, where it has become a contentious political issue. The Center for Responsible Lending, a private consumer group based in Durham, N.C., calculates that nationally payday loans totaled at least $28 billion in 2005, doubling in five years.

The loans are quick and easy. Customers are usually required to leave a predated personal check that the lender can cash on the next payday, two or four weeks later. They must show a pay stub or proof of regular income, like Social Security, but there is no credit check, which leads to some defaults but, more often, continued extension of the loan, with repeated fees.

In many states, including New Mexico, lenders also make no effort to see if customers have borrowed elsewhere, which is how Mr. Milford could take out so many loans at once. If they repay on time, borrowers pay fees ranging from $15 per $100 borrowed in some states to, in New Mexico, often $20 or more per $100, which translates into an annualized interest rate, for a two-week loan, of 520 percent or more."

I can't place all the blame on Pay Day Loans. I can't place all the blame on the people who use them. I can't place all the blame on schools. I can't place all the blame on society for not properly educating about money. I can't fully blame society for the cycles of poverty; making Pay Day Loans appealing.

A piece of the blame should be shared. People have to do what they must to survive and Pay Day Loan place take advantage of this. The people who use Pay Day Loans need to develop an exit strategy, no matter how bad their current financial situation happens to be. Have a plan for getting out from under the loans and building a strong financial foundation. Find organizations or individuals that educate AND help you build this foundation. Take control of YOUR money!

As the old saying goes, "Give a man a fish and he will eat for a day. Teach him how to fish and he will eat for a lifetime."

If you find yourself in Pay Day Loan hell or are considering using Pay Day Loans, let us help instead!