Why Banks Are Not Lending to Loan Seekers

The problem never comes by giving advance notice. A sudden requirement of money can come without any advance alarm. In this situation, a loan is the only way to get relief. You may need money for various purposes such as treatment, home decoration, education or business. You walk towards the bank for a loan, you will get a 90% chance of getting rejected. Yes, it is true. Community banks are facing problems by the multinational banks, but banks are lending to small trades at a fathomless rate. There has a big list of loan programs are running in the USA for small businesses and also for many other purposes and among them hard money loans, conventional loans, and SBA loans are getting more and more importance every day. Especially the drop is going on in the business loan cases.

When small trade lending got an injury at the time of recession, many people were worried but it was originally a suspect of the financial downturn and would eventually inch its way break. However, There has many reasons for that banks are avoiding to lend a small business, and increased regulation is one of them. It does not matter what type of loan you want to apply, it may be a hard money loan or may be an SBA loan. Every loan program has its rules and regulations. You should remember that banks are offering this debt from my money, your money as well as your neighbor’s money. For this reason, they have to take more protection. Unfortunately, investing in small businesses is riskier than larger trades, so banks think two times before approving their loans.

Small business owners are looking for a smaller loan amount. But, it does not create a financial sense for bankers to offer these little loans. There has a genuine cause for that. They can make money by focussing on larger loan amount and at the end of the day, banks are getting more business from a more significant amount of credit. One of the other primary cause is a decreasing in community banking sector. Historically, small trades got more option for finding a debt at Union bank than a multinational or big bank. Even community banks have four times better approbation record than a traditional bank. But unfortunately, the number of community bankers have been reducing since 1980. With a little number of community banks, there have minuscule options for trade owners to find out a loan from regular lending options like banks.

If you wait for a while and give a look at the reasonable banks, you will found that they have reduced their loan options to start up or small trades, there has logic. Although, it is very disturbing that business leaders have to face so many rejections. So small business owners or other loan seekers need to learn the way of approach when they are applying for a loan. In this strict era, you should not expect that the traditional lending options offer you fund for your small business or for your needs, it is toward being conscious of many ways to support your valuable business or financial status so try to find out many other sources.

Now the only way is to try alternative lending options like SBA bank loan broker. Online lenders have started outgoing from last many years to support debtors financially that cannot find money at the bank, also given the collapse in bank lending to little trades. The nontraditional lending sector is expanding. Traditional or non-traditional lenders are just normally any non-bank lender. Most often you can search them on the internet, as they don’t have any physical place like a traditional lending institute. These nontraditional lenders offering traditional loan programs, invoice financing, small term loans, and much more.

But before selecting a nontraditional lender, you need to understand the every part of an investment and also understand your needs because if you do not understand your needs you never able to know that what type of loan will be most exact for you. Do your research on the internet and gather some real information regarding the exact loan which you are going to apply. Also, you can take help from your lender, and they will suggest you the best, but still your knowledge will help you to select the most appropriate suggestion.

article source : http://www.articlesbase.com/finance-articles/why-banks-are-not-lending-to-loan-seekers-7484300.html

How Start-up Business Loans will Kick-start your Business

Have you been struggling all this while to make sure that you become eligible for the guaranteed business loans in the UK? Probably, the big question out here is that you are still having no clue whatsoever, whether the online credit lender is going to make you the welcome offer. The better part of everything else is that you have to be sure whether your real need is the start up business loans or not. For the simple logical reason around- you just cannot have the start up business loans from any tom dick and harry. It is just not going to improve your credit history, and you will not have flow of the credits.

Start up business loans fall in two categories – The unsecured loans for the business and the secured loans for the business. If you wish to apply under either of two categories, you need to be sure of their terms and conditions. It is always important for you to know what type of loan will work in your interest.  You just can’t have the loan without having the options discussed in real time with the credit lender. The terms for your loans should be transparent, and more importantly, these terms should match up to your means.

How Start-up Business Loans will Prove Beneficial?

In the simple terms, the loans for start-up businesses are not just the benefit but a complete solution in itself. The loan is offered on various terms and conditions. And now talking of the business loans for the start ups, here are few pointers to consider

The borrower will not have to show up their credit history reports;

• The loan is offered to the borrower even if the borrower is facing bankruptcy;

• No upfront fee is charged by the online credit lender;

• The loan approval rate is far quick than what you can really think;

• Real-time loan options will get along your way;

•  Loans will be quickly disbursed into your account;

•  Amazing loan options are always listed to meet your requirements

• Highly simplified loan procedures to start your business

• The APRs charged are quite competitive

And just in case you are going through the bad phases of your life, and have a bad credit history built up in your name, obviously you need a different loan product altogether. The business start-up loans for the bad credit borrowers will make the change. It is going to give you the change effect and altogether impressive history. And now without holding up, or going into the stage of procrastination, the thing that is going to really matter out here is the strategy.

Without much ado, all you need is to get through the terms and conditions of the lenders and make sure you take a quick stand on guaranteed business loans in the UK. The more knowledgeable you are about these types of loans, the better. The loans will make the difference to your life and all the more, your enjoyment will really matter.

article source:  http://www.articlesbase.com/finance-articles/how-start-up-business-loans-will-kick-start-your-business-7361852.html

Escape the payday loan trap

An Economic Sign of Trouble

Getting caught in the payday loan trap is common In today’s economy. With gas prices approaching $4.00 per gallon, food prices rising at record rates and health insurance costs rising as much as 20 percent in one year, there is one relatively new industry that is flourishing by feeding off the financially challenged. The payday loan industry is experiencing tremendous growth in recent years. Virtually unknown only several years ago, the loan stores are opening up almost daily in every low and middle-income neighborhood in the states where they are legal. The internet has virtually thousands of sites where anyone, with a job and direct deposit, can get a loan deposited directly into their account with no credit check. The internet lenders are generally more predatory in nature than their storefront counterparts as they are not regulated and can charge interest rates that would be usurious and illegal in any other financial industry. Many of them allow customers to roll over their loans until the next pay period for a fee rather than paying it off in full. Some actually make it extremely difficult to pay in full by requiring 72-hour notice by fax prior to the ACH withdrawal date. They know that most people do not have faxes in their homes and will generally will not remember to do it. For example, if George takes out a 500.00 loan on the internet and agrees to pay back 600.00 on his payday by allowing the payday loan company to ACH debit his account, he will receive an email stating that his loan is due on the 15th. This email is sent on the 11th and says, if he wishes to pay the loan in full, he must fill out and email, or fax, the attached statement within 24 hours. It is Sunday and he does not see the email until Monday morning. He is now at work and tries to fill out the form online to email back but cannot type in the blanks. He does not want to print it for fear of his coworkers seeing it so he waits until he gets home. Now it is too late. The company will take the 100.00 from his account and he still owes them 600.00 on the next payday. The problem now is his rent is due on that date also.

Getting Trapped

The 1st of the month is quickly approaching and George begins hearing a noise from the front brakes in his car. He takes it to the shop and is told that he waited too long and they have to cut the rotors and replace the pads. They also discovered his brake lines to be dangerously worn, Total cost 375.00. He has no choice but to pay. He again goes to access his banking details online to honour this payment. Now, between rolling over his 600.00 loan again and subtracting the cash for his repairs, George has found himself short of the rent. So what does he do?. He goes back on the internet and takes another loan from a different company for $300.00 more. Now he owes 900.00 with 300.00 due on the 15th from the second loan and 600.00 also due the same day on the first loan. However, this time, he realizes that the 600.00 has to be paid in full as only two rollovers are allowed and the 300.00 he can roll over at a cost of 60.00. There goes most of his check leaving him short of his utility bills and car insurance so he starts to panic and takes a third loan for 500.00.

As a moderator and counsellor on a prominent website dealing with debt, it is not uncommon to see guests who come there looking for help with as many as a dozen payday loans or even more. Some of them have paid as much a $1000.00 on a $300.00 loan. They are ashamed and scared to a point of insomnia and can no longer focus on anything, including their jobs. One person, as I learned later, had become suicidal. It is a very difficult situation but there is a way out. The proverbial light at the end of the tunnel does exist..

Escaping the Trap

The very first thing a person should do to get out the payday loan trap, is to list all the loans they have by category (internet or storefront) the amount borrowed from each and the total amount paid to each, including interest and rollovers. The next thing to do is to check the lending laws of the state you live in to determine the maximum interest allowed and are rollovers permitted. Contrary to what the lenders will tell you, most states require lenders to be licensed in the state, regardless of their geographic location, and must abide by the laws of that particular state. Most, but not all, internet lenders are not licensed anywhere and many are located offshore with only mail drops in the US. Wilmington Delaware has a huge number at a Mail Boxes Etc.there due to the states soft lending laws. A helpful site for this info is http://www.paydayloaninfo.org/.

After you have determined the above, you must see if any of them are members of the CFSA, a membership organization of payday lenders. These will almost always be the storefront lenders. Their members are required, under the membership rules, to set up payment plans for those who are in trouble. You must, however, request a plan before you default. Because the storefronts are legal operations, and abiding by state laws, you are required to repay your loan and interest or they can sue you for the amount plus attorney fees and court costs. Contact them and tell them you need to make arrangements and they will usually be obliging..

The next step out of the payday loan trap is to close that checking account before the next pay date and ask your payroll department for a live check for a while until you feel it is safe to open a new account. Do not let any of the internet lenders know in advance of your plans or they will hit your account immediately. You must then send a letter to each of the lenders revoking any wage assignment agreement you may have signed and give a copy to your payroll department. Wage assignments are not garnishments and can be legally revoked by the signer at any time. The lenders will still send the assignment to your employer, regardless of the revocation, but at least you will not have your paycheck handed over to them. You must also check with your bank to be sure they will not force open your account if an ACH withdrawal comes through after you close it. Once you have done all this you have your life back and can make the internet lenders deal with you on your terms and not theirs. Remember to never give them any new account info or card information. They can clean you out. Pay them only by money order, wire or preypayed debit card.

You have at least a moral obligation, when caught in the payday loan trap, to pay back what you borrowed plus interest under the laws of your state. Make it clear to them in writing that this is what you are paying and not a cent more. You can expect nasty phone calls, threatening you with arrest at your job and all sorts of other illegal nonsense, of which they cannot follow though. Do not allow them to intimidate you. Stand your ground. Some will turn you over to third-party collectors. If that happens you must send the collector a debt validation letter asking them to prove that the debt is yours, how they arrived at the amount and that the lender is licensed in your state. Nine times out of ten you will never hear from them again. Remember if an internet payday lender is illegal in your state they will not have the power to collect there and they know it. They will resort to intimidation as their only recourse. The few that are licensed will be much easier to deal with and will usually come to a settlement agreement with you, For those who choose the path of harassment, send them certified, cease communication letters and do not hesitate to file complaints with the Better Business Bureau, the Attorney General in your state and the state where they say they are located, the financial regulatory agency of your state and the FTC.

Remember, if you are ensnared in the payday loan trap, that most payday lenders are predators and their sole purpose for existence is to suck as much from their financially vulnerable victims as is possible. Escaping them is traveling an avenue that is difficult and stressful but it is the only road that will lead to freedom from the snare that that entangles so many in this era of economic turmoil.

article source : http://hubpages.com/money/Escaping-the-Payday-Loan-Trap