Payment cards have become one of the most common ways of payment, and some experts even predict that in the near future they will fully substitute paper money. Choosing a right payment card is not an easy task, and in this article we will give you some advice on how to choose the payment card that best suits your needs.
1. Before you choose which payment card to choose, think of the purpose the card will be used for. Check the offers of different banks and choose the best solution for your needs – for example, for cash withdrawal use credit cards are not usually used because the withdrawal costs are higher than with the debit cards. Always keep in mind that the money spent by credit card has the highest fees and use it only when you absolutely have to.
3. Select the card with the lowest interest rate – interest rates on cards of different banks may vary significantly from 1, 4% to 3% on a monthly basis. This means that the annual interest rate is 16% – 36%
4. Select the card with the lowest maintenance fee – banks charge an annual fee for use of the card and it can vary considerably. Check the offers of different banks before making your choice.
5. Make sure that you can afford the allowed limit on a credit card. Do not increase your limit, just because your bank offers this option or because you know that you can spend it.
6. Repay the entire credit card debt each month in order to avoid high interest. If you cannot repay the entire amount of the debt, at least pay more than the minimum amount each month. The possibility of paying only the minimum amount of debt can seem very tempting, but it can be viewed as a sort of a trap. If you only pay the minimum amount each month, it could take years to repay the debt in full, assuming that you no longer use the card.
7. Avoid using more than one credit card – even if you do not use all the cards in your possession, you will pay the annual fee for them, and when that money sums up, it can represent a quite high expense on annual level.
8. Familiarize yourself with your responsibility in the event of card loss or identity theft – keep in mind that some cards do not include the insurance in case of loss. This means that if someone misuses your credit card, you will be responsible for all costs incurred. In case your credit or debit card is stolen, make sure to report the theft to the police and notify your bank immediately, so that the card and the account connected with it can be blocked.
Guarantor loans usually cover a period from one to five years, which puts them in a group of medium-term loans. They require a guarantor who will vouch for you that you will pay the loan in full, and if you do not do so, they are responsible to repay your debt. It poses a lot of responsibility on both the borrower and the guarantor, but the guarantor loans are still one of the most common types of loans taken by individual entities.
This is because they are granted even to individuals with low credit rating, plus they usually have low interest, which is a large advantage if you consider that the interest money cumulates over the years and can represent a very high expense.
Getting a guarantor loan should not be complicated if you find a person who is willing to be your guarantor and who has a good credit rating. However, it can have certain disadvantages and can pose certain risks upon both the borrower and the guarantor, so before you decide to apply for such a loan, make sure to reconsider all the possible pros, cons and the potential outcomes of such a move.
In order to apply for a guarantor loan, you must be over 18 years of age, be a citizen of the USA and own a bank account in a US bank, through which the repayment installments will be collected. The same conditions need to be fulfilled by the guarantor as well. When applying for the loan, you need to fill in and submit your assets and liability statement, and your guarantor is required to do the same. You may even have a bad credit history when applying for a guarantor loan – but your guarantor must have high credit rating in order for the loan to be granted.
When it comes to choosing a creditor, it can theoretically be practically anyone older than 18 years, a US resident and with good credit rating. However, the most common practice is that a guarantor is a person n close relationship with a borrower, such as a parent, a sibling, a child or a spouse. It is not rare that guarantor is also the borrower’s very close friend.
When you need to choose a guarantor loan, make sure to check the conditions of several banks before making the decision. The most important factors that should affect your decision are the amount of interest you will pay and the amount of the additional charges related to your loan. After considering these conditions with several banks, you should choose the one which seems as the most suitable in terms of the lowest interest rate and the smallest amount of additional costs.
In conclusion, we can say that guarantor loans are suitable for individuals with low credit rating, because they are easy to be granted to such people unlike other types of loans. Additionally, paying out a guarantor loan timely can improve your credit rating immensely after it was paid in full. Also, they are suitable if you are likely to be able to pay them out over the period of several years, and if you are certain that there is someone willing to vouch for you. If you find yourself in these categories, than this type of loan may be the loan you will find suitable.
When it comes to loan agreements, there is no standard form of the agreement which can meet all the circumstances of a particular lending. However, there are certain elements which must be contained in every loan agreement, in order to serve as protection against all eventualities. In this article, we will deal with the basic elements of a loan agreement, which every agreement of this type should contain in order to be fully valid and protective for both the borrower and the lender.
1. Conditions of the loan – the loan agreement should spell out the conditions of making the loan. They include the purpose of the loan, the currency or currencies in which the loan is made, the dates between which the money can be drawn and the minimum and maximum amount of each withdrawal.
2. Remuneration of the lender – the loan agreement must specify the monthly rollover basis of all the fees, the dates when they are due to be paid, the basis for calculating the interest and the commitment fees, as well as the amount and dates of payment of other fees, if there are any.
3. Repayments and prepayments – this element of the loan contract should specify the number of repayment installments and the dates when they are due, as well as conditions under which prepayments (early repayments) are allowed.
4. Renewal of loan – the borrower is usually required to select interest period and currency, if applicable before each withdrawal or rollover date.
5. Taxation – loan agreements should specify that all amounts payable by the borrower will be made free and clear of all taxes and similar charges.
6. Conditions precedent – before the lender allows any withdrawals under a loan, it is necessary that they are convinced that the borrower has the power and authority to enter into a loan agreement. They also need to make sure that the contract is binding on him, that the information given by the borrower is correct and that the borrower is not currently in breach of any of the covenants he will undertake to maintain the life of the loan.
7. Alternative interest rates – the protections must be included against the unlikely event that the interest rate is impossible to be determined on the basis of the average interest rate offered by federal funds rate. 8. Changes in applicable law – there is always a possibility of changes in the law during the life of a long-term loan, which can have as a consequence the change in bank’s ability to continue the loan. This is why a loan agreement should prescribe the clause stating how to deal with a situation such as this.
9. Representations and warranties – it is important that the lender makes a full and truthful disclosure of all the factors relevant to a landing decision and makes representations and warranties to that effect.
10. Events of default – in case any signal of danger for the loan appears, this clause of the loan contract determines the procedures which should be followed in such cases. This clause makes the loan repayable immediately if any unexpected event occurs, and the details of this clause vary according to circumstances.
11. Governing law – a provision should be stated so that if an instalment is paid in a currency other than the currency of the loan, the borrower will compensate the lender for any of the exchange loss.
12. Jurisdiction – it is usual for the borrower to expressly submit in the loan agreement to the non-exclusive jurisdiction of the New York courts.
Predatory lending is more extreme form of payday lending in which lenders use deceptive actions in order to give loans with interest rates that are too high, or to input other illegal parameters in payday loan creation process. A lot of those things they do is against the law, but those practices are still present. Most common example of predatory lending is introduction of collateral (car, house or other property ) if a borrower fails to repay that loan. Lenders that practice predatory lending will deceive borrowers with different interest rates ( they will give different interest rates on paper, if there is any, and in their negotiations with the borrower ) or they will convince the borrower of his ability to repay those loans in time, which of course leads to seizing of property which is the main goal of those lenders.
I will give you a list of abuse and unfair lending practices that are considered as predatory lending:
Lenders will increase interest rate in return for extension of repayment time of borrowers that they consider as high risk individuals. It is also common to give higher interest rates to high risk people, which some consider as fair and legal practice. Whole lending industry, both legal and illegal consider this practice as fair, because high risk individuals pose higher risk of not returning their loans.
Lenders use single premium insurance on their loans to secure their investments. This is done to secure loans if a person that took them dies. These loans are in most cases illegal, and customers have no insight in all details of that insurance. That is why this insurance is incorporated into the loan, raising repayment size of the same.
Lenders will not inform their borrowers about negotiable loan prices. Borrowers don’t know that they can negotiate the size of the loan they take, or the repayment period. They will try and convince future borrowers that conditions they have given are in their best interest. But in fact many lenders when faced with customers that do understand these things will be open to negotiations that involve size of the loan and repayment period as well. And different repayment period can lead to different interest rates, another thing that lenders hide from their borrowers.
Borrowers that are unsophisticated and those than don’t have any insight in documents will more than often get cheated. Lenders will avoid disclosure of all conditions and terms of the deal, and some will even alter certain aspects of the deal, as long as they can keep those alteration out of the borrower’s sight.
Some payday lenders use desperation of their borrowers to raise interest rates beyond usual percentage. They will also make a list of additional fictional risks that will raise interest rate even higher, or they can list those additions as other types of fees.
Many payday lenders will do anything to increase their income from repayment of their loans. They will try to deceive you, and present the loan as borrower friendly, which is far from true.