The Difference between Payday Loans and Tax Refund Loans in North Carolina

WMRC2009 payday loan in NCThere are so many things that you need to know about the advance cash industry. That’s why wants all of their customers to be well-informed. The industry includes a lot of things such as passing the most current news regarding the different types of alternative loans. One type of this said loan is called the tax refund anticipation loan. At first, this kind of loan look like it is the easiest way to get cash as soon as possible. However, for some people this is not the best loan alternative.

Tax Refund Loan – is otherwise known as a refund anticipation loan. This is a type of loan wherein the client will be borrowing the amount of money that they expect to receive right after they file their yearly taxes.

Refund anticipation loan works in such a way wherein a customer receives a loan that is equivalent to the refund amount that they are anticipating to receive after they file their taxes. The refund that they will be getting should cover the cost of the said loan as well as any associated fees. This kind of loan is very appealing to a lot of people because it enables them get their money without the need to wait for the IRS. The only problem with this is when the amount of tax refund that they customer gets are less than the loaned amount plus the corresponding fees. This becomes very hassling to the customer since there is a need to pay back the additional money that was not anticipated.

With this at hand, you might be wondering as to what is the better choice in North Carolina if not a tax refund loan. The answer is simple – all you need to do is get a payday loan in NC.

If you know that you have money scheduled to come in anytime soon however you cannot wait since you need the cash as soon as possible, then getting a payday loan is the best option for you. There is a big difference between this payday loan and the tax refund anticipation loan. This is because during the time that you apply for a payday loan, you have an idea how much your income will be. Due to this, you will have an idea how much you will be able to borrow and pay back. While the tax refund anticipation loan positions a customer in a very dangerous situation in case the refund is lower than the loaned amount, the payday loan is a safer and faster way since you are sure that you can pay back the cash advance. only wants the best for all clients. That’s the reason why the company wants everyone to know about the possible negative effects that one might suffer from getting a tax refund loan. So if you are really in need of a cash advance, then it is much better if you just opt for a payday loan from If you have any other questions about payday loans, feel free to contact.…

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Debt Settlement Companies Exposed!

A few weeks ago, I wrote about the dangers of PayDay Lenders in an effort to raise consumer awareness. It seems like the longer the recession goes on, more and more consumer predatory industries are being regulated by individual states and the federal government. They are attempting to clean up the damage done by years of less regulation but are still leaving open loopholes for these industries to find ways to operate profitably. Case in point, the Debt Settlement Industry has blossomed over the last decade. According to the Association of Settlement Companies, an industry trade group, in 2015 there were 300 firms in the sector. Now, there are about 1,000 firms that handle $18 billion in consumer debt negotiations. The average consumer user has $30,000 in consumer debt.

So what exactly do debt settlement companies do?

A debt settlement company negotiates with banks and collection agencies to forgive part of the amount that you (as their client) owe to your creditors. Before they actually begin negotiations on your behalf, they require that you deposit monthly payments into an escrow account they also have access to. These monthly payments are first used to cover their commission fees for assisting you in your debt relief. Once their upfront fees have been paid, they commence actually contacting your creditors to negotiate an actual settlement amount. As you continue to pay into the escrow account, they use the funds to begin paying off your settled debt.

Sounds like a great idea and extremely helpful, so what are the drawbacks?

What are the drawbacks? There are too many to mention. For starters, the most ambitious statistics available show that customers only complete their debt settlement program 34% of the time! When customers don’t complete the program, they simply lose out on any upfront fees they have already paid and they don’t even make any progress towards satisfying their debts to creditors. Also, debt settlement companies tend to charge between 20 – 70% of the amount they actually help you save through settlement. Sometimes this is in addition to a flat upfront fee and a monthly recurring fee as well. There have been massive complaints to the FTC regarding the industry’s practices. Some complaints included companies stealing the entire escrow deposit amounts and never even contacting a single creditor on a customer’s behalf. According to MSN Money, there are five drawbacks everyone should consider:

Debt settlement is not for everyone- You could be a good fit if you are heading towards bankruptcy but don’t qualify for chapter 7. It may be a viable option instead of filing for chapter 13. Or if you can gather up enough cash to pay your debts in a debt management program then using a debt settlement company is not for you.
Your credit will suffer- Creditors don’t settle unless you are severely behind on your payments. Delinquent payments may still be hitting your credit report while you are paying the debt settlement company through an escrow account. It could take up to two years before the company even contacts your creditors.
You could get sued- Creditors aren’t required to stop collection efforts once you inform them of your efforts to settle. They could sue you for the amounts you owe even though you are attempting to settle through a debt relief settlement.
There are tax consequences- Debt settlement is a taxable event. Any forgiven balance that exceeds $600 is taxable income. So for example, if you are in the 15% tax bracket with a $5,000 forgiven debt, that carries a tax liability of $750. Under federal law, this debt won’t be forgiven without special lobbying and filing form 982.
Their services might be illegal- Since federal law doesn’t restrict the use of debt settlement companies, individual states have been left to regulate the industry themselves. So far 12 states (Arizona, Georgia, Hawaii, Louisiana, Maine, Mississippi, New Jersey, New Mexico, New York, North Dakota, West Virginia and Wyoming) have restricted their ability to operate in their state. However, some companies do not follow the law and solicit customers in states in which they are not permitted. Even if they are based in another state, they can’t operate in states in which the practice is illegal.
So if I’m in debt up to my neck, what should I do?

First and foremost, please remember that I am not a financial advisor. I am not giving you advice that you should act on but only my personal opinion. With that said, I personally would contact my individual creditors directly and ask them what options were available to settle my debt. Once you are in arrears, most creditors are willing to work with you but you have to reach out to them for assistance. Creditors want to get paid at the end of the day, they would rather you avoid bankruptcy all together! If this does not work for you or is not an option, seek the help of a non-profit debt counseling agency who’s primary goal is to provide debt relief assistance and not turn a profit. A simple Google search should pop up several in your area. Finally, if all else fails and you decide you need the help of a debt settlement company, do your research before you agree to any terms and conditions. Ask probing questions, check with the FTC to see if any complaints have been filed against them, make sure you get an explanation for all fees beforehand and see if they are negotiable. Also, stay in frequent contact with your service contact and make sure you review the monthly statements for your escrow account often. Watch for unexplained fees or shortages in the balance. Again, these are just my personal opinions and not statements of fact.

Finally, the single biggest way to avoid the trap of debt settlement companies is to never get into high consumer debt in the first place.…

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Your Financial Diet

In a previous post, I mentioned you should treat your personal finances like you would your business finances. That means keeping track of every penny you spend. Are you allowed to forget the $1.25 in change you spent on an ice cream cone last week? Of course, but don’t make it a habit. Those pennies add up!

Well, in taking my own advice, I had been sitting on a small box full of receipts I meant to input into my personal system and tally up. I won’t say how far back they went, but I will say a good way to keep your receipts is to dump them into a shoe box during the month. At the end of the month, tally them all up and file them away. Anyway, as I sat there inputting the numbers, I took notice of what my spending habits had been since I last did this. I had eaten out or bought lunch a lot more than I budgeted for and it clearly showed in my tabulations. So, I thought to myself what can I do differently over the next period in order to reign in my expensive food consumption?

The result? I’m going on a 30 day Financial Diet! And, I challenge you to go on it with me! Here is how it will work:

For the next 30 days, I have decided I will not buy fast food. Every meal I eat will either be home cooked or someone else is going to buy it for me. Since I don’t expect that to happen often, I know my spending and fast food consumption will go down drastically. A double positive.

For the next 30 days, I won’t buy any candy or buy soda (pop). I’ll only drink water and juice. More importantly, I’ll buy my water in bulk from the grocery store so I won’t pay for over priced bottles from vending machines and corner stores. I won’t even be afraid to refill the same water bottle whenever its empty and I know where a water fountain is close by.

For the next 30 days, I won’t go out to dinner more than twice. When I do, I won’t spend more than $25 each time. I’ll save both trips for two weekend days so I feel like I’m still getting out. Again, if its on someone else’s dime it doesn’t matter how often I go. But this is a critical cut back because dining out can easily run you $50-$75 a trip for two.

For the next 30 days, I won’t spend more than $20 on alcohol. Sound impossible? It may be depending on how much you drink. But the financial savings is worth the sacrifice. I’ll remind myself how to have a great time even when I’m not under the influence.

For the next 30 days, I will make a conscious effort to buy all of my food from the grocery store. By focusing on grocery shopping, I will help eliminate the prospect of desiring to make expensive food purchases on the sheer strength of readily available food in my refrigerator.

That sums up my financial diet. Will it be tough to adhere to? Of course, that’s why I suggest you undertake it with a friend. For the next 30 days, talk with this friend nightly so you two can compare expenditures. You don’t have to tell that person everything you bought, but you do need to tell them whether or not you stuck to the financial diet. Also, you want to discuss how you felt when you made each purchase for the day. Where you tempted to buy more or did you only buy exactly what you needed? Do you feel your attitude toward spending is changing? How does your energy level feel? As you two discuss the questions, let the conversation roll and see what ideas transpire in the process.

Lastly, I feel compelled to tell you no diet is easy. Never has been and never will be. A diet requires you to sacrifice the things that are unhealthy for you and your lifestyle and the things that take away from your daily efforts to get to the places or the level you want to get to. But the payoff is well worth it and I hope you succeed as we embark on the 30 Day Financial Diet.…

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The Dangers of PayDay Lending

When I was a kid I vividly remember being warned of the various dangers the outside world posed to a young child. I was told never to talk to strangers because there was a possibility I could get kidnapped. I was also told to look both ways before I crossed the street. The point being, there was always someone older, more experienced that was looking out for my best interest.

Now that I’m an adult, I no longer am under the direct influence of parents. As a result, I am subjected to the media, the entertainment industry, and the internet to tell me how I should live, what dangers I should lookout for, and what clothes I should wear. These outlets are not only influential in my life but in the everyday lives our our entire society.

Here is a perfect example, the other day I was rolling in the car listening to one of the popular nationally syndicated black early morning talk shows on the radio. During one of the commercial episodes the hosts acted out a commercial for an online pay day lender who could approve you for a short-term loan in a matter of seconds, all you needed was a bank account and proof of employment. As I thought deeper about what I was hearing, I found myself getting upset. My rationale was as follows, black radio with a large minority audience, advocates the use of payday loans when you are in need of extra cash… I want that to set in for a second before I dive into the reality of payday lending.

In 2019, payday lending was a $42 billion industry. In case you don’t know, payday lenders make all of their money charging customers fees for short-term loans and check cashing. In addition, they are mostly concentrated in low-income neighborhoods where residents are barely making ends meet and credit cards are hard to come by and maintain.

So let me paint the picture, you are short on the rent and have no where else to turn. So, you walk into a payday lender seeking a short-term cash loan. They give you a loan in exchange for a personal check to cover the loan plus the fees. They are automatically going to cash the personal check on your next payday. According to the Huffington Post Investigative Fund, if you took out a $200 loan, you would have to pay back $247.80 on the due date. That’s an annual interest rate of 623%!

What makes payday lending so vicious, besides the high interest rates, is the cycle customers get caught in once they take out their first cash loan. Typically, cash strapped customers pay off their original loan just to take out another loan to cover their other bills. That’s why 99% of customers become repeat business. Eventually, customers get so behind on bills, they start defaulting on their payday loans.

You would think there would be better protection for the consumer but these payday lenders lobby in Congress just like other special interest groups. In fact, they spent $6.1 million in 2019 lobbying, which was twice the amount they spent in 2018. Since the federal government can’t seem to pass federal legislation, states have taken the initiative to protect consumers with reasonable small loan cap rates to as low as 36% annual. Only 15 states and the District of Columbia have passed such legislation. Payday lenders typically charge 390-780% APR.

With such limited protection, consumers repeatedly fail to repay these high interest loans which often leads to bounced checks, harassing phone calls from lenders, threats, and various acts of intimidation. Research indicates that payday loan users are almost twice as likely to file for bankruptcy as borrowers who are turned down for a payday loan (often turned down for lack of a bank account).

Now, imagine if black radio advocated and advertised for savings accounts through credit unions and high interest yielding savings accounts. Buyer beware.…

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