Newcopia

If you’re researching unsecured loans online, you might notice a lot of different terms being used interchangeably. This review site uses the term “online personal loans” to refer to online loans that are used for personal expenses (as opposed to business expenses). One type of personal loan is the payday loan, which is usually for a small amount ranging between $100 and $1500 that has to be paid back in full on your next payday. Personal loans can also be for larger amounts and the payments may be stretched out further, over a period of several months or even a few years.

If you are interested in obtaining a short term loan to help with your immediate expenses, check out our lineup of the best sites for online personal loans.

Payday Loans

Payday loans (also called “payday advances” and “online personal loans”) are unsecured loans, meaning that there is no collateral and usually no credit check required for approval. Payday loans are granted based on your income and are designed to be paid back on a specified date that corresponds to your pay dates. Sometimes they can be paid back in multiple payments, but usually you are required to pay back the entire amount plus interest in one payment.

An online payday loan additionally requires that you have a bank account in good standing because the money is transferred directly into your account and your repayment is deducted electronically on the due date. This is in contrast to a payday loan from a storefront, which generally requires that you provide a post-dated check that will be cashed or deposited on your next payday. Even online payday lenders may require you to provide a canceled check in order to enroll for electronic repayment.

The maximum payday loan you can obtain generally depends on your income. Many of the sites on our lineup for online personal loans require you to make a minimum monthly income of around $1000. People who have a much higher verifiable income may be able to borrow more money. Payday lenders usually do not perform credit checks, but there is a national database in the U.S. through which lenders can check whether you have other short-term loans. Some lenders will deny you a loan if you have any unpaid loans with other lenders. Even if your credit score is not considered, you will also typically be denied a payday loan if you are currently in bankruptcy and in some cases if you have ever filed for bankruptcy.

Two Types of Cash Advances

The term “cash advance” is sometimes used synonymously with “payday loan” to refer to an advance on your paycheck. This type of cash advance is structured the same way as a payday loan or online personal loan, in that the maximum amount you can borrow depends on your income. Cash advances are designed to be repaid on your next payday or within one month.

The other type of cash advance is based on a credit card or line of credit. This type of cash advance is based on your available credit limit on a credit card rather than your monthly income. A credit card cash advance is usually treated just like a purchase made with a credit card, so the repayment terms follow the policies of your credit card. A cash advance on a credit card may or may not offer you a better deal than a payday loan depending on your credit rating and the terms of your credit contract. Some credit card companies charge higher interest on cash advances than on standard purchases.

In general, unsecured loans of any type (including payday loans, online personal loans, payday advances and so forth) come with much higher interest rates than secured loans or cash advances on credit cards. This is because the lender for an unsecured loan assumes a much higher risk of not being repaid. Some of the sites on our lineup for online personal loans offer lower interest rates to repeat customers with a history of prompt repayment because they have demonstrated that they are a lower risk.

Before you apply for an online loan, take a look at our lineup of the best sites for online personal loans, which includes an in-depth look at the differences between many of the lenders.

Want to take charge of your financial life? Pay off your credit card debt.

High balances and high finance charges can put a real drain on your wallet and limit your financial options. And if you let those balances linger long enough, they could keep you from achieving other important goals and dreams, such as buying a home.

Whatever your financial goals and dreams, paying off high-interest credit card debt is the first important step in the right direction. These pay-down tips and strategies will show you how.

Get organized. Step 1 is getting organized. Gather up all your credit card information. Make note of the balance, interest rate, due date, and minimum payment for each card. How bad is it?

Do you have lots of balances spread out over lots of different cards? Do you have one big balance and several small ones? Have you consolidated your debt to one card but can’t seem to make any headway on your balance? Have you been playing the balance transfer game for months and months?

Next, add up the minimum payments on each of your credit cards. How much money must you pay each month just to stay current on your credit card bills? Can you afford to pay more than the minimum payment on one or more of your cards? If so, get ready to do it. Debt can pile up for all kinds of reasons. Paying it down is pretty straightforward. Pick a pay down strategy and stick with it until your balances are paid off in full.

Pay off the balance with the highest APR first

From a dollar and cents point of view, this strategy makes the most sense. With this strategy, you increase your payment on the credit card with the highest annual percentage rate while continuing to make the minimum payment on the rest of your credit cards. Once you pay off the balance on the card with the highest interest rate, you move on to the card with the second highest interest rate, and so on.

Doubling or tripling your minimum payment on the card with the highest interest rate is a good way to start. Whatever payment boost you can afford, do it and stick with it. If you start by paying $150 on a credit card, keep on paying at least $150 each and every month until the card is paid off.

Be sure to stick with your boosted payment amount even as your balance and minimum payments slip lower and lower. Remember: the aim is to get your balance to zero. Easing up on your payments as your balance creeps lower will slow your progress.

Pay off the card with the lowest balance first

This strategy is a great way to build up a little momentum. With this strategy, you increase your payment on the credit card with the lowest balance, while continuing to make the minimum payment on the rest of your credit cards. Once you pay off the card with the lowest balance, you move on to the card with the next lowest balance, and so on.

It’s quicker and easier to pay a $500 balance down to zero than a $2,500 balance. And it feels good to pay a credit card bill in full, no matter what size balance you begin with. Plus, every low balance card that you pay in full is one less minimum payment that you have to pay each month. By knocking out one or two smaller balance cards, you’ll have more money to focus on larger balances.

Consolidate your debt to a single card or loan

Like things simple? This pay-down strategy might be for you. By consolidating your credit card debt to a single card or debt consolidation loan, you have a single payment to make each month rather than four or five. One payment to pay each month – that’s it. You can even automate payments so you never have to worry about paying late. Just be sure to choose a payment amount much more than the minimum each and every month so you can make some real progress on paying off your debt.

This payment strategy makes things easy, but it also makes it easy to let things slide. So pick a payment amount, double or triple your minimum payment (or whatever you can afford), and be sure to stick with it.

Many credit card holders are experiencing problems with credit card debt.  They are unable to pay off their credit card balance each month and more than that the interest rates continue to increase.  During the holiday spending on credit cards is usually going to increase because families decide to get gifts with their cards rather than the money they have.  Despite being a convenient payment system for consumers, credit cards can very easily turn into a negative option.

Spending habits of consumers is the most dangerous part of the credit card.  Consumers see credit cards as a way to get what they want when they want it.  This mentality has to change if the credit crunch is going to right itself.  Consumers can no longer depend on their credit cards and their old spending habits. 

Financial trouble is growing in the UK due to the debt and lack of income.  Loss of jobs is increasing.  Mortgage companies are no longer willing to lend money, especially equity type loans.  Credit card use is just one of the many areas UK consumers need to look at for how they are spending and what can be done.

It is not the time to go to an ATM and do a cash withdrawal from your credit card.  You should also avoid using your credit cards if you can’t pay the balance off.  For many, credit cards and shopping is imperative because you get more protection with the use of a credit card for gifts.  However, when the consumer cannot pay the amount they place on the card the debt just continues to increase.  Fraudsters are another concern of credit card use.  The best thing to do is avoid credit cards for daily use and watch where you use your card.  Don’t use your card in an online shop you are not familiar with.  Protect yourself and spend wisely.