Benefits of merchant cash advances

Merchant cash advances have become a lifeline for many businesses in the last couple of years. If you are planning to get a merchant cash advance but have doubts, this article may provide more information.

What are the benefits of the merchant cash advance?

benefits of the merchant cash advance?

benefits of the merchant cash advance?

1.  No credit check or collateral at stake

 

 Traditional bank loans will require you to have a good credit score before they approve your loan. The credit score may not even guarantee you a reasonable interest rate and worse, you are not even guaranteed for a loan. This means that if you have bad credit, you may not be able to get a bank loan at all. This could eventually mean that your business is at a risk if you cannot get the money your business needs urgently.

This is when merchant cash advances rise to the occasion. Merchant cash advances providers are not interested in your credit score. They only deal with your business. Thus whether or not you get the cash advance all depends on the state of your business.

The plan also gives you peace of mind. This is because merchant cash advances providers do not look for collateral when granting you a merchant cash advance. This is because the merchant cash advance is not considered a loan. It’s an exchange of cash in exchange for future credit card sales and debit card sales.

Thus in the case of things don’t go as planned, you don’t give in to stress yourself about the risk of losing your home or car or whatever is used as collateral. Your house and car are always safe when it comes to taking out a merchant cash advance.

2. Easy application

 

Easy application

Easy application

Merchant cash advances are just one of the easiest financial plans you can get as there is not much that is required to process the cash advance. Comparing this with a traditional loan, the merchant cash advance is pretty easy to apply.

It takes weeks and probably months to apply for a traditional bank loan. This is because of the numerous background checks they make. All these will take more than a month to review. A merchant cash advance usually takes less than 24 hours to approve. You will get your cash advance in about 7-10 days.

If two merchants decide to take out a merchant cash advance and a bank loan respectively, the one who went with the bank loan will probably have a hard time before finally getting his money compared to the one who took out the merchant cash advance. A merchant cash advance is very convenient, simple and attractive to anyone who knows that time is money.

3. Quick access to cash

 

 Quick access to cash

Quick access to cash

The simplicity of the financing plan makes access to cash easy for a business. This is because of the simplicity if the paperwork that is needed for the application.

While commercial companies offering loans are looking at tax returns, credit scores and all types of documentations and credentials, merchant cash advance companies just need the percentage rate at which the sales will be divided and the amount of time that will take for them to get their money back.

It becomes possible to get your cash injected into your business in about a week or so instead of the months it takes for commercial loans to be approved. With merchant cash advances, you get the  money quickly to turn around your business.

The main benefit if this plan is the accessibility it provides. Many businesses can apply and benefit from it. As long as you are making sales, you are just as qualified as another person who applies for a merchant cash advance. 

4. High approval rate

 

High approval rate

High approval rate

This is largely because of the opportunities it presents to the users if this financing plan. Technically the business is judged by the average amount of money it makes monthly.

This means you get the average for the previous year to determine the state of the company and the trend at which the company is moving. Due to this, the plan has been having a high approval rate especially from those who have benefited from it.

5.  Revenue-based collection

 

The merchant cash advance company only gets paid when their customer (your business) gets paid. The financing plan is designed in such a way that repayment money comes from credit card and debit card sales of the business. This if a business doesn’t make money, the merchant cash advance provider doesn’t get paid. It’s that simple. Thus, the business proprietor has nothing to worry about.

The commercial loans work in such a way that, for a loan lend to a business, there is the principal payment plus the interest. Now repayment comes as followed: you have to pay a monthly amount of cash to the lender each month, failure to which you risk hefty penalties and even worse, loss of your collateral item.

When it comes to merchant cash advance industry, you just need to keep your thoughts and concentration on making sales. The merchant cash advance debt will slowly repay itself. This allows you to keep a clear mind and focus on improving your business.

A merchant cash advance is one of the many business financing plans you can get. Typically, it helps you upgrade your business or help pay off other debts or help you solve all sorts of business-related problems. The most attractive feature is the repayment factors. They keep you focused on the business instead of worrying about repayment.

 

10 things you need to know about merchant cash advances

You may be a business owner with a struggling business and are probably looking for options to save your company from going down. The merchant cash advance option may have come to your mind but probably don’t have enough information. This article is dedicated to giving you useful information and taking you through a couple of important points.

1.  What is a merchant cash advance?

Merchant cash advance

Merchant cash advance

Merchant cash advance financing is a financing option that involves the loan of a certain amount of money into a business by merchant cash advance providers in exchange for future credit card and/or debit card sales. It is a financial plan that small businesses take up.

Merchant cash advances help them get quick cash which their businesses need. In exchange, they sell a part of their future sales to the merchant cash provider. This means that if the business makes a sale, the sale is divided between the business and the provider company.

    The terms are agreed between the two parties but the cut is usually between 10-25% of the credit card sale going to the company while the remaining goes to the company. This becomes an easy way for the business to inject cash flow into its operation and then pay back as they continue conducting business.

2. Functions of merchant cash advances

A merchant cash advance is used by the business for all sorts of reasons. The business may decide to use the cash to pay their employees or repay a debt. Other businesses may use the cash advance for advertisements or fund a promotion campaign. Other uses may include the production of more inventory and stocking up products. 

The merchant cash advance is a helping hand for business owners during difficult financial situations. The cash advance becomes a quick solution for these problems.

3. Merchant cash advance is NOT a loan

Merchant cash advance is not a type of a loan. It is described as an exchange of cash the future credit card or debit card sales. It is not considered as a loan and thus treated differently. That is why merchant cash advance providers say that they are not regulated by the loan and interest legislations that have been put in place.

Hence, the interest rates could go higher than you are normally used to. Another difference is that since it is not a loan, the interest rates are not calculated by the annual percentage rate. They are calculated according to the factor rate of the business.

4.   Fast approval

Fast approval

Fast approval

Merchant cash advance is processed within a short period of time. With all necessary documentations and credentials, a merchant cash advance could be approved within 24 hours. The deposition of the money into the business account may take up to a week. This is considered very fast compared to traditional loans which have to go through a series of processes before they approve your loan. A merchant cash advance gives you the fast cash for your business. Thus, it is very attractive to small business owners.

5. Pros of the merchant cash advance

Pros of merchant cash advances

Pros of merchant cash advances

A merchant cash advance has many advantages that attract a lot of people. They include the approval time z and the credential factor, among others

  •  A merchant cash advance does not require many credentials to apply. It’s all about the business and not about the individual. Thus there is nowhere the credit score of the proprietor of the business is in question. The plan solely deals with the business and not the owner.
  • The approval time for a merchant cash advance is just lessee than most other loans in the market. It takes a minimum one week to get the merchant cash advance for your business. It’s why merchant cash advances have become so popular.

6. Cons of merchant cash advances

The plan definitely comes with a few drawbacks which you have to be careful of. The drawbacks mostly affect the interest rate of this plan. The plan doesn’t have an annual percentage rate as it is not classified as a loan. It all depends on the factor rates. This means the rate of interest cannot be controlled. There is an important aspect which you may need to know.

The percentage cut that is paid to the company for every sale is not the same as the interest rate. They are two different things and the charges are different band have to be paid. This may cause confusion for the business owner and thus cause frictions in the future.

7.  Other factors

This sort of financial plan is has a special characteristic. The amount of money from sales that are going to the company varies. This means you cannot plan for the money that is going to be paid from your business to the company. This plays a con card in this case.

However, this characteristic has a flip side. This is because since the cash is not specified, it means that you are not affected as a business when it comes to the low season of your company. There is no specific amount of cash that is specified that your business has to earn each month. Thus, the merchant cash advance company will get paid when you make sales. This relieves your business from the pressure of having to attain a certain amount of sale each month.  

8. Company specifications

 

different companies will come up with different offers

different companies will come up with different offers

In order to attract businesses into their plans, different companies will come up with different offers for your businesses. Thus, you will have to a lot of companies offering merchant cash advances but are customized in different ways to suit different businesses. The key is always to take the plan that works well for your company. It’s all about looking at works with your budget and your sales projections.

9. No collateral involved

Merchant cash advance companies don’t need a collateral as this is not a loan. It is an exchange of future sales for a merchant cash advance. This, collateral becomes irrelevant. It’s all about the agreement put in place when the application of the MCA  was done.

10. Bottomline

It’s all about choosing what works for your business. This plan is very attractive as it’s very simple to understand. However, it has the downside of having very high- interest rates. However, if you can couple with them it’s a plan that could go a long way in making your business a success. It’s all about perspective; what you make of the plan.

Installment loan benefits

Installment loan benefits

Installment loan benefits

Installment loan benefits and how they can help

Unforeseen expenses are a common setback to most people’s financial status. These expenses include emergency medical bills, outrageous home bills and taxes or unexpected car repairs. They may leave you with no option other than to seek for financial aid from other sources.

This drags you slowly into debt. It is imperative that you consider your choices and the lending companies that you choose to work with. Keen scrutiny expects you to note down critical components that constitute a loan. These include the repayment period of the loan, its interest rate and other aspects that are important to you.

Luckily, there are various alternatives available for you to choose from. Installment loans are among these choices. An installment loan refers to a loan which is to be repaid over a given period of time in installments. The repayment period may vary from a few months to as long as 30 years.  You can read about the basics here.

There are different types of payday and installment loans out there. They include auto loans, personal loans and mortgages. Installment loans have certain merits that outweigh their demerits. That is why most people prefer installment loans to other forms of traditional borrowing such as payday loans.

You can avail online installment loans today. Need Help? Have Questions? Talk to an installment loan expert now at (800) 961-5909

Why you should use Installment loans

  • No credit checks installment loans

    No credit checks installment loans

    Speed: Most of these installment loans, if approved, will be transferred to the borrower’s bank account on the same day or the next business day. Direct lenders of installment loans do not ask for a lot of documentation, hence speeding up the processing time.

  • Interest Rates: Installment loans have lower interest rates than other alternative traditional forms of borrowing such as credit cards and payday loans. This makes Installment loans more reliable and appealing to borrowers. Low-interest rates reduce the total cost of repaying the entire loan. Most of these installment loans also have fixed interest rates. This keeps borrowers at ease as they need not worry about an increasing interest rate.
  • Flexibility: Compared to other loans, installment loans come with more flexibility. Generally, installment loans are long term. With a long loan tenure such as over 15 years, it is obvious that monthly payments will also be lower and easier to make.
  • No credit checks installment loans: Most people who are deep in debt are already experiencing difficulties in making full repayments within the agreed time frame. This is bound to hurt their credit score. Someone who has taken up bankruptcy, for instance, and defaulted in payment may be subject to a lower credit score. A low credit score scares away potential lenders who fear that you would not make payments promptly.

    Direct lender installment loans offer a flicker of hope for borrowers as they do not have credit checks as a requirement for eligibility. Their interest rates are also fixed, hence enabling borrowers to apply for installment loans with bad credit.

Benefits of car title loans

Benefits of car title loans

If you are employed, maybe you are on a day job, at a specific date that is far away from your payday, the financial struggles in your life are at their best at this time. By saying so, it means that if you meet with an emergency, it becomes a pain to try and solve it.

Emergencies could range from repayments of mortgage loans, school fees for your kids to unexpected situations like illness and accidents. All these require money to settle. It’s never that easy to cope, especially if the only source of income you have is what you get at the end of the month.

Car title loans have emerged as a great alternative to help you get out of tricky financial situations. It’s all about getting yourself a lifeline before you receive your salary by the month-end payday.

According to statistics, car title loans are becoming popular among people these days.

A car title loan requires you to use your car as collateral. Loan amounts can range from between $150- $1500 but it could be as high as $5000. The loan amount is determined by the value of the car that you are using as collateral. The loan amount is about 45% of the car’s market worth at the time of loan application.

Loan application

car title loans benefits

car title loans benefits

You can approach the lending company either by physically making your way to the office or apply online. After the application is submitted, you should submit your car title and its photo identification.

The company also asks for a copy of the car keys and then asks you to buy a roadside plan. After processing your loan, the company gives you the loan amount in the form of a check or deposit the money into your deposit account.

The company expects you to pay back the money as stipulated by the contract that you sign upon getting the loan. It includes the interest and other fees. If you cannot repay the loan, the company may end up repossessing your car and selling it to recover the outstanding loan.

A car title loan, however, has many advantages. That is why it is very popular among people.

1.  Ability to provide cash

A car title loan is designed to help you in times of financial difficulties. It offers cash conveniently and quickly just when you need it.

The loan helps you get out of financially difficult situations by providing cash to solve the problem at hand. We are talking about solving all the emergencies that may happen at a time when your next payday is still a few weeks away.

2.  Getting your money fast

Getting your money fast

Getting your money fast

The application and approval of a car title loan take a very short time. In fact, you could be getting your loan in a matter of a day or two. Compared to other types of loans, this is quite fast. It does not require you to keep making applications and waiting in line at the banks.

After you are approved for a car title loan, your car is then inspected and its value is determined. The lender and you will discuss before the former lays down the terms and conditions for the car title loan.

The speed of the car title loan processing and approval is a result of the simplicity of the loan and how it is designed.

3. Minimal requirements

For your loan to be processed, you will need to actually own a car. There are no bank account or credit checks. The car which you will be using as collateral for the car title loan is what matters.

Therefore, it is easy to process the loan and get the money that you need in less than two days. The credentials needed include basic personal information, the car title, the car itself during the application for assessing its value and its photo identification. Within a day or two, the loan is processed and you are on your way to solving your emergency.

Other loans require a lot of credentials and background checks before they approve the loan. This takes a lot of time. This is why most people are turning to car title loans for quick cash solutions.

4. Use the car as usual

Use the car as usual

Use the car as usual

A car title loan is very different from going to the pawnshop. This is because it allows you to continue using the car which you had used as collateral as you normally do.

The only thing the car title lending company needs is the car title. You are required to do is keep making prompt payments for the car title loan to avoid repossession of the vehicle.    

If you go to pawnshops, they will require the car or automobile to be left in their care until the loan has been repaid in full. It is only then that you will get your car back.

5. Credit scores

As stated earlier, the only documents and credentials needed are just your personal details, the car title and the car and its photo identifications. It is important to understand that a car title loan uses the car as collateral.

Essentially the car is the loan’s source of security. For this reason, the lenders barely look at the credit score of the borrower. The only thing they need is the car title.

Looking at traditional loans and other types of loans, the credit scores of the borrower are very important for the loan to be approved. Hence, car title loan are very suitable for most people as long as they own a car.

6.  Cheaper than cash advances

Car title loans are way cheaper

Car title loans are way cheaper

Car title loans are way cheaper than cash advances. The annual percentage rate (the real cost of borrowing) of cash advances are at about 400% or 450% compared to 300% annual percentage rate of car title loans.

While interest rates for both types of loans are quite high, interest rates for car title loans are definitely lower than those of cash advances.

As a borrower, you want a loan which with a low-interest rate. Hence, most people are attracted to car title loans.

7. Convenient repayment options

Car title loans offer a variety of loan repayment options. They include physical over-the-counter payment and online payment, among others. Compared to other types of loan servicing, this is flexible and efficient. You can make payment from anywhere at any time of your choice. This makes a car title loan very attractive.

8. No stress

A car title loans relieve you from financial stress. Emergencies are easily solved since the loan is approved. Moreover, you don’t need to stress about your credit score.

How to save money with loan consolidation

Debt is not new topic for most people. It has helped some people through difficult times. However, debts have also trapped some people in a vicious cycle. Debts should be managed carefully. They are headaches to deal with and it is worse if you have more than one debt to repay.

Debts come in all forms, from car title loans, payday loans, student loans, credit card loans, cash advances and the list goes on. All In all these have to be paid back in full. This is where problems happen. With the high-interest rates on these types of loans, you will be spending a lot of money on loan repayment.  

With debt consolidation loans, you have a chance to reduce the amount of money paid. Consolidated loans work in such a way that the lender grants you a loan to repay all the debts that you may have, then you are left to slowly repaying that loan back slowly.

How can loan consolidation help?

  1.     Lower interest rates

How can loan consolidation help?

How can loan consolidation help?

Typical loans have quite high-interest rates. Interest rates are even higher in loans such as payday loans and car title loans. These loans typically have annual percentage rates ranging from between 250%-450%. This translates to between 20% and 38% of the loan amount. If you have more than one loan with such high-interest rates, you are definitely going to feel the pressure.


Loan consolidation could help to solve these issues. It gives you the chance to get out of all these debts and gives you a reasonable interest rate that matches your monthly income. In doing so, you save a lot of money on the interest rate.

Every borrower dreads the inability to repay a loan due to rising interest rates. A consolidation plan keeps you out of such situations. All it requires from you is to do the math and make sure that the consolidation plan works for you and not against you.

  1.     Rollovers and payday cycle

 the ultimate way out of debt

the ultimate way out of debt

Assuming you took two or more payday loans. Now you know that when it comes to payday loans, you have to make the payments in a lump sum all at once. However, you may be facing hard times and you are forced to apply for a postponement of repayment. This leads to the rollover situation which involves pushing the repayments to the next month.

The lender may also subsequently review your interest rates and add other fees and penalties. If rollovers are done frequently, your debt grows and you may fall into a payday cycle scenario which you have to keep coughing up money every month to servicing loans that seem never-ending. This is where you need to consolidate loans

For this reason, consolidation loans have become the ultimate way out of debt and at the same time save a large sum of money. The consolidation loan lets you clear up the debts that you have and help you avoid the lethal payday cycle. You have just a specific amount of money as to pay each month, for a specific time until you can repay back the loan.

  1.     The “good credit” factor

Financial decisions are and should always lean into the future of the individual in question. By saying this I mean you have to make a decision that ensures that your future is guaranteed to be easier than the situation you are at present. Look at it this way, you may require to take up an unsecured loan.

Depending on your credit score, the interest rates will lean in that direction. If bad, then the interests will be high, but if it’s good, the interests will be lower.

Debt consolidation helps you build up a good credit score. This is because it moves you away from the numerous monthly payments that you are prone to skipping or forgetting. You now have just one monthly payment to focus on. When you follow up all repayments on time, you get to improve your credit score. This may mean you have a brighter financial future.

With a good credit score, you can get a traditional bank loan with affordable interest rates. You have less to pay when it comes to loans in the future, thus saving you money. A debt consolidation loan is a great money saver for most people who know how to get the best out of it. Bad Credit Consolidation loans are also available with few lending institutions.

The basics of car title loans

Need fast cash?

Need fast cash?

The basics of car title loans- What are they?

Every person would love the idea of receiving fast cash when they need it. More often than not, they meet with some obstructions along the way. Having a bad credit score is a huge disadvantage when it comes to borrowing bank loans. Luckily, there are some types of loans which do not take into account credit scores at all.

Car title loans are one type of such loans. A car title loan is a secured loan that allows borrowers to use their cars as collateral.

The lending company determines your car’s price based on the worth of the car in relation to the price that it would cost in the auction market. The lending company holds your car’s title until you pay off the whole loan within the stipulated time frame.

In the event that you default on your repayment, the lender is allowed to repossess your car and sell it to recover outstanding debts. However, if the borrower repays the loan on time, the lender will return the car’s title back to you. 

Car title loans are generally short-term loans and are associated with higher interest rates than other types of loans. The high-interest rates act as a guarantee for lenders as they cover the risk of lending to borrowers who are already in financial difficulties. In loans such as car title loans, the borrower’s credit history is not the lender’s concern. The value and condition of the car that is being used as collateral are of utmost importance. Hence, it is possible for borrowers with bad credit to secure a loan.

  • Eligibility of car title loans

Eligibility of car title loans

Eligibility of car title loans

1. Proof of your income


To secure a car title loan, you are expected to show your payslip and other necessary evidence of a regular income. As car title loans are associated with hefty interest rates, the lending company expects you to have a regular income so that you can fund the repayments.

2. Minimum age


You must be 18 years and older for you to secure a car title loan.

3. Personal identification


To secure a car title loan, you are required to have certain forms of valid identification These include a driver’s license, car registration number, and car insurance.

4. Proof of residency


You are also expected to give proof that you live in the said state. To prove this, you can provide some form of relevant mail.

  • Car title loans online

Car title loans online

Car title loans online

Many title loan companies offer online application for title loans. This application requires you to give basic information. Such information include:

1. Personal information


This includes your name, address, and contact telephone numbers.

2. Vehicle information


This includes the make, mileage, color and vehicle identification number.

3. Insurance information


You may need to reveal your insurance policy numbers or increase the coverage amount while taking up a car title loan.

  • Loan calculator

The amount of loan that you can secure is dependent on the worth of your vehicle. The lender generally offers a loan that is about 30% of the vehicle’s worth. This guarantees the lender of good profit in the event that they repossess the vehicle and sell it at an auction if you were to default on repayments.

  • Why car title loans are good borrowing options

No credit checks

No credit checks

Most borrowers take out car title loans due to their benefits.

1. Fast approval


With car title loans, you can get your money in just a few days or in a matter of hours. The money is either sent to your bank account or you can receive a check.

2. No credit checks


Many people who struggle with a poor credit score. With car title loan, lenders are not concerned with your credit score. Instead, the value and condition of the vehicle that is put up as collateral are very important to them.

3. You get to keep your car


With car title loans, you get the loan while still getting to keep your car. The only thing that the lender requires is that you give them a set of the car keys and its title until the loan is fully repaid.

4. Easy to qualify for


Title loans are very easy to secure. There are only a few requirements that should be met for you to be eligible. These are proof of income and residency, meet the minimum age and own a vehicle.

5. Less paperwork


Car title loans are available online. This minimizes tedious paperwork.

  • Disadvantages of car title loans

 Danger of losing your car

Danger of losing your car

1. Higher interest rates


Car title loans come with unreasonably huge interest rates. Interest rates may even exceed up to 300% at certain times.

2. Payment and fees


Lenders of title loans frequently charge outrageous fees and interest rates which end up leaving you even more in debt.

3. Danger of losing your car  

   
Car title loans are secured with your vehicle as collateral. In the event that you default in repayment, the lender has the right to repossess your vehicle and sell it.

  • Car title lenders

things you should consider

things you should consider

Most people are susceptible to fraud from rogue lenders and companies. Before committing to a car title loan, there are certain things you should consider.

1. You should apply for car title loans during emergency financial situations only.

2. Always borrow the smallest amount possible to avoid burdening yourself with unnecessary debt that would land you in more financial difficulty.

3. Many lenders are out to charge outrageous interest rates. Before committing to a car title loan, make sure you negotiate for the lowest possible interest rate.

4. Look for a lender that has won high approval ratings from customers over time.

  • Alternatives to car title loans

It is of utmost importance for any person who wants to take out a loan to evaluate what other alternatives are available. Compare the interest rates, penalties, fees and other options before making a decision.

1. Payday loans


Although payday loans also come with high interests, you do not stand the risk of losing your car in case of loan  default or late repayment.

2. Personal loans


Personal loans have a fixed number of months which you have to pay back your loans. With this, you can easily come up with a repayment plan. Personal loans come with interest rates that are lower than those of car title loans.

3. Sell your valuables (pawning)


If you are in dire need of fast cash, you can consider pawning some of your valuables such as jewelry. You can sell these items on online platforms such as eBay and Amazon.

4. Emergency loans 

       
These are short-term unsecured loans that come with low-interest rates. Emergency loans can be offered by companies with an emergency loan program for employees making the borrowing experience cheaper and easier.

Merchant cash advance: what it’s all about

Sometimes, your business may experience cash flow issues. It could be cash needed to pay your employees and suppliers, get new inventory or expand the business. As a business person, you want a fast solution, a way to pump money into your business quickly.

Time is money in this case and so every minute counts. Traditional loans may take a long time to process, especially if we are talking about a large sum of money. Background checks will be carried out, then they will check your credit score and ask for collateral for the loan. The process could be too long and complex. Thus, you will look for better solutions that are fast and convenient for your business and safe for yourself. This is where merchant cash advance comes in.

Merchant cash advance is a purchase of a fixed dollar amount of your business’ future credit card or debit card sales receivables. What’s a Merchant Cash Advance? Let’s break this down for better understanding.

What is a merchant cash advance

What is a merchant cash advance?

What is a merchant cash advance?

What is merchant cash advance? Merchant cash advance started long ago, but it was structured differently. It would involve a large sum of cash payments that would be done to a business by a merchant cash advance company, in exchange they would get an agreed upon percentage of future credit card or debit card sales.

This means that repayment would be done slowly. You have to realize that a merchant cash advance is not categorized as a loan.

Times have changed and now the merchant cash advances have been adjusted structurally to accommodate all sorts of business, big or small. Right now, the definition of a merchant cash advance is as follows: a merchant cash advance is an exchange of a specific amount of payment done to a business in exchange for future credit card and/or debit card sales.

The payments are done in small portions over a short period of time as specified between the business and merchant cash advance company. This description has helped to bring the diversification of the business that looks for this financial plan as an option for their business.

The structural concept

The structural concept

The structural concept

Merchant cash advances are about the exchange of future credit card sales and/or debit card for instant cash. Basically, the owner of the business gets the cash injection and then as the business makes money the company that bought the future sales gets back its money slowly.

Let’s see a simple example. A business decides to take out a merchant cash advance worth about $30000 in exchange for about $35000 future sales. As the business goes on making money, it has to pay between 10-25% of every credit card or debit card sale it makes to the lending company.

Payment is structured according to the agreement between the borrower and the lender. The business may decide to make a payment by the end of each business day. This means that calculations are done, and then the cut is made and sent to the merchant cash advance company.

However, some businesses have adopted the technologically advanced payment mode. This involves partnering with payment processors. Thus, payment is done automatically and a percentage of the daily sales is transferred automatically to the merchant advance company.

The fact that this financing option plan is not described and characterized as a loan means that the providers of this service disregard any laws and legislations imposed on loans everywhere, citing the reason that the laws do not touch their financial modification. This ultimately means that they can set interests up to anywhere they deem profitable enough for themselves. After all, there is very little in place to stop them.

However, they are quite reasonable as each deal they make all depends on the structure, sales and projection of a business. It’s all about what comes out of a business a certain time and how fast they will get their money. Instead of using the annual percentage rate to calculate interest, this plan uses specific business factor rates to calculate how much interest the company pays back.

Repayment options of merchant cash advance

Repayment options of merchant cash advance

Repayment options of merchant cash advance

This plan is mostly used by small business enterprises and companies that technically cannot qualify for a traditional loan. It is important to state that a merchant cash advance is always more expensive than getting a traditional bank loan. However, the business that uses like its convenience. The fact that the merchant cash advance company don’t go looking at the borrowing company’s credit score makes merchant cash advances even more attractive.

  When it comes to repayments, the merchant cash advance companies want to give their customers enough options to let them repay conveniently. The repaying options are:

  •         Slip withdrawal
  •         Lockbox
  •         ACH withholding

Slip withdrawal

This is the most popular way of repayment. Typically, this mode of repayment involves the automatic slip of sales. This means that if a credit card sale is made at the business which borrows the merchant cash advance, the payment is split such that 10-25% of the total sales go to the company while the rest remains in the business. The method is convenient for all types of businesses. Both parties get their money automatically with no conflicts or delays.

Lock box

This mode of repayment is also known as the trust bank account withholding. This entails the deposition of all sales made by the company into a bank account that is controlled by the cash merchant advance company. Then according to the agreed terms, the company sends the business’s portion of the sales through wire transfer into its deposit account. This option is the least preferred because it is prone to all sorts of delays.

ACH withholding

This mode is divided into two; it will either depend on if the agreement is “for sale” or “as loan”. As a sale, the company gets the credit card sales information and then deducts its portion for itself. When structured as a loan, the company will not regard if the business has made a sale. The company deducts a fixed amount of cash daily.

What Is An Unsecured Loan

What Is An Unsecured Personal Loan

An unsecured personal loan is an online payday loan  given without any collateral or asset tied to it. In the conventional lending system, the common type of loans that are advanced to borrowers is secured credit. Secured credit, as the term describes, is a type of credit where a borrower is required to offer collateral or an asset to back up the debt. In the event that the borrower defaults the loan, the lender will convert the collateral into cash and recover the money given to the borrower.

Unsecured debt is highly risky because there is no surety that the borrower will repay the debt within the stipulated time and this has forced this type of credit to have high-interest rates. When you do not pay the loan on time, it will accrue additional charges and penalties.

 An Unsecured Loan

What Is An Unsecured Loan

You can borrow unsecured credit for any purposes as long as you are on time with payments. It is important that you understand how these credit facilities work before you decide to use them.

Knowing the differences between secured and unsecured loan is vital as it helps you know what to look for in the market. Although Personal unsecured credit can be easy to access,  direct lenders have a method of recovering their debt mainly through wage garnishment and other options. Moreover, you may be forwarded to the credit bureaus, therefore complicating matters further.

Lenders in our network understand your financial and will guide you on a debt that will suit your needs. Personal credit space has increased over the years and more lenders are joining the market. This has become difficult to identify the perfect lenders to get loans from.

You will have many options when dealing with us. Because we understand the market, and what you need to do as a borrower to get the best deals in the market. The process of loan request is simple. All you have to do as a borrower is fill out a form on our website. Once you have filled the form and sent it to us, we will forward it to the right lender. Your lender will evaluate and give you a credit limit. If you are happy with the credit offer, then you can sign the required documents for the loan to be disbursed. There are important factors that you consider before you take out any loans. These include:

  • Do I need the loan?

Do I need the loan?

Do I need the loan?

This is the most important question that you need to ask yourself. Evaluate your situation first before taking out the loan. It will give you an idea of how you will repay the loan. Your lender may ask you several questions to establish your ability to repay the loan and if you have a poor credit history, this should not be a worry because lenders in our network do not consider credit history an issue. They will perform a soft credit check which is usually just to verify your documents.

 

  • What are the rates and terms of payment?

What are the rates and terms of payment?

What are the rates and terms of payment?

It is vital to note that when you are searching for credit, you should make a point to conduct thorough research. Never sign any documents or accept a loan when you have not fully understood the terms and conditions of the credit.

The most crucial aspects are interest rates, late payment fees and other extra charges that could be associated with the debt.

The annual percentage rate is a figure or an average rate of your loans. If it is higher, there is a chance you will pay a higher interest rate as well. Lenders will offer loans at different interest rates and it is vital that you understand these rates before you choose to take out a loan.

  • Alternatives

Alternatives

Alternatives

When looking for a personal credit, you should search through different providers in our network. Going through a number of lenders in our network will help you get the best loan interest in the market.

Perhaps it is imperative that you understand all the features of the loan before you decide to take it. Every lender has different rates. If your credit score is low, do not fret.

We will link you to lenders who will finance your credit. Moreover, you should have a sound financial plan because this will help you make a better financial choice. Understanding what led you to get into the debt will give you a chance to know what you will do in future to avoid a similar situation.

Choosing a lender can be tricky business for some people, especially if you do not know what to do or if this is your first time. Before you fill out the documents, it is important that you understand all the requirements from your lender.

This will guide you on what is expected of you. A short-term credit should serve as a way of helping you through a financial emergency and it should not be used as a long-term solution to your financial problems. One of the main benefits of the loan is that you can clear your debts quickly and embark on getting your finances back on track. Some of the features to look into include:

  • Fees – the fees that are associated with the credit will determine the period that you will repay your debt. You should analyze your situation and the fees charged to see if this is what you can afford. Some lenders will charge you late payment fees and you should be aware of them.
  • Loan term – many people assume that credit terms are similar. This is not true because a term represents the duration that you will be required to repay the loan. Moreover, this will determine the total amount that you will pay. When it comes to money, choose a term that you are comfortable with and you can repay the amount on time. This will help you avoid extra charges that could be added to the loan.
  • Signature loan – this is the type of credit that is advanced to you as personal unsecured credit because you will sign documents with the promise to repay the loan. Once you have signed the documents, you will be in a position to access the credit facility. You should go for credit that gives you affordable or competitive monthly installments. With this, you do not have to change your lifestyle. Lenders in our network will look at your income and current financial obligation and customize a loan for you.

10 things you need to know before consolidating a payday loan

1. Quick Access

We all know how annoying and unbearable debts can be. You realize that it’s hard to repay all the debts that you have. One type of debt is payday loans. You are expected to repay a payday loan when your next paycheck comes your way. It’s a short-term loan which requires you to pay the whole lump of cash all at once. Reason for taking up such a loan could range from being broke in the middle of the month before the next payday or due to an unexpected financial emergency. While loans could be lifesavers up to a certain extent, it could ruin your life too.

2. Payday cycle

Take help of a debt consolidation plan

Take help of a debt consolidation plan

So you may be wondering, how one actually gets into a big debt crisis, so big that it would need payday loan consolidation. For instance, you may take up a small payday loan, hoping that you will be able to repay it immediately once you get your next paycheck. Suddenly, an emergency hit. Perhaps you also need to pay your kids’ school fees, or have a medical bill which your insurance does not cover. So you take up another payday loan. Both loans are expected to be paid back when you get your next paycheck.

However, you realize that you cannot afford to repay both. Thus, you roll over the loans. Rolling over typically gives you a little more time to repay with paycheck you get the following month. However, there is a catch. The interest rate for the rollover amount will increase and so will the fees you have to pay.

Subsequently, your debt increases. You are stuck with the lender and having to repay large sums of money. Due to the rollover, you can’t keep up with the loan payment. The increasing amount of debt is about to stifle you.

Lenders love this situation. You need to get out of this situation with the help of a debt consolidation plan. Hence, you should consolidate payday loans and use that to your advantage.

3.  Outline your financial goals

To get out of the debt, you first have to know your financial goals. You have to plan where you want to be, where you are currently and how you want to get to your target. You should sit down and analyze your financial situation carefully.You to look at all your income sources, then compare them to what owe your lenders. Doing this math will help you establish your financial status.

4. Consolidation

 Consolidation

Consolidation

Having established your financial situation, it’s time to start thinking about the solutions. Typically, you want to get out of debt as soon as possible. Payday loan consolidation is one of the best ways to get out of recurring debts and increasing interest rates. However, it is important to be specific about what you actually want. There are 3 main types of debt consolidation companies.

1. Debt consolidation companies: they give you a loan to pay up all your debts and then you repay them slowly.

2. Debt management: these act as third parties who try to re-negotiate the interest rates that you are paying for your current debt.

3. Debt settlement: they are also third parties, but they negotiate to lower the principal balance of your debt.

This means that you have to be very precise with the type of plan you want.

 5. Research

Having decided the type of consolidation plan you want to embark on, you need to look at specific consolidation companies. It is always advisable to allow yourself as many options as possible. You could decide to pay them a visit and try to get all the details on the type of consolidation plans they offer. By giving yourself enough options, you have flexibility.

6. Review

countercheck the credibility of the company

counter check the credibility of the company

You mostly want to rely on the companies that care nonprofits. You have to look at what actually fits your current financial situation and can help you out of the payday loan debt trap. Nonprofits are the most suitable companies, mostly because they are not after making money from borrowers.

Whatever awesome adverts you may have seen, remember that what you see may not be what you get. Thus, it is always important to countercheck with financial authorities to confirm the credibility of the company you are interested to work with.

7. Interest rates

The annual percentage rate of the payday loans is about 300%. This means that the interest rates are quite high. While deciding on consolidating your payday loans, you have to look at the interest rates of every consolidation company. See if it fits your financial goals. The lower the rate, the better. Go through all the options you have until you find the best one.

8. Fees

lower the fees, more advantageous it is for you

lower the fees, more advantageous it is for you

It is important to look at the fees that come together with the consolidation loan you choose. You could be talking about fees that are incredibly high, so you need to look for the lowest fees among your choices. The purpose of the consolidation loan is to let you improve your financial situation while you pay off your consolidation loan. Thus the lower the fees, the more advantageous it is for you.

9. Terms and conditions

A consolidation loan definitely comes with a contract. Signing it will let you be bound by whatever terms which are stipulated in the contract. The terms include things like the time of repayment, the interest rates, and the penalties if you don’t pay up. You have to look for terms that are as flexible as possible. Also, you have to negotiate for breathing space, for if you leave the whole responsibility to the lender, he may decide to suffocate you as you try to look for a way out of the debt situation. This could leave you in worse situations that you were initially.

10. Doing the math

The most important thing is simple to keep up with the numbers. For a good loan solution, you have to weigh the possibilities and make a sound financial decision. It’s all about knowing your numbers and taking them into consideration before making any Payday Loan debt consolidation decision.

Payday loans vs installment loans

A loan refers to money borrowed by a debtor from a creditor that is to be paid back at an agreed time at an agreed interest rate. There are different types of loans for the borrower to choose from depending on which type suits his financial circumstances best. These loans include car loans, payday loans, personal loans and consolidated loans. Most of these loans are considered installment loans since the borrower pays the lender back in scheduled monthly payments. Borrowers should understand the differences between payday loans and installment loans to know what loan works best to their advantage.

Payday loans

 short-term unsecured loan

short-term unsecured loan

A payday installment loan is also referred to as a payday advance. It refers to a short-term unsecured loan that is given to a borrower where he is expected to make payments on his next payday. Payday loans are usually associated with high interest rates as compensation for creditors who face dangers of the borrower defaulting repayments.

The creditor cannot perform collection activities if the borrower does not make payment as payday loans are of an unsecured nature. Hence, they do not require you to put up property as collateral.

Payday loans have a simple but expensive application procedure which. It involves you writing a personal check for the amount of money you want to borrow. You are also expected to pay a certain amount of money for borrowing as application fee. Payday loans take a very short time to be processed. Borrowers receive their funds in their checking account electronically, fast enough to meet their immediate financial needs. Lenders of payday loans ask for little verification which make qualifying for payday loans quite easy.

Payday loan lenders require verification of employment or income which is determined through recent pay stubs and bank statements. This financial information acts as a guarantee that the borrower is in a position to make repayments.

Online payday loans offer consumers fast application and upon approval the funds are deposited directly into the borrower’s checking account. The repayment procedure involves financial charges being withdrawn electronically on the borrower’s next payday. Payday loans come with certain advantages that appeal to many borrowers.

Advantages of payday loans

Payday loans are easy to get

Payday loans are easy to get

1.Easy to get: Payday loans do not involve tiresome procedures and complicated requirements. This makes it easy for borrowers to get a loan. The basic requirements are quite simple and the lender only requires you to have a stable job and a recurring income to qualify.

2. Fast to get: Most payday loans are transferred electronically into the borrower’s checking account. Upon filling out an application form and having your loan approved, you will have the cash you need really fast.

3. Convenience: Payday loans are convenient as they are readily available. Payday loan companies are located throughout most cities. Availability of online payday loans has made it easier for all borrowers to access this loan online.

Disadvantages of payday loans

Payday loans can harm your credit score

Payday loans can harm your credit score

1. They are expensive: This is a major reason why most people shy away from payday loans. Interest rates of a payday loan are extremely high which is linked to the risk faced by the creditors if the borrower defaults payment. Application fees are also charged to borrowers which makes borrowing a payday loan expensive.

2. Payday loans can harm your credit score: As payday loans are expensive, borrowers are often burdened by this high cost. So they may delay in making payments which would adversely harm their credit score.

Installment loans

Installment loans considered to be less risky

Installment loans considered to be less risky

An installment loan is a type of loan where the principal amount and interest are repaid back in scheduled payments known as installments. Compared to payday loans, installment loans are considered to be cheaper and less risky.

Installment loans are either secured or unsecured, depending on the type of installment loan. Mortgages and car loans are secured where the borrower is expected to put up his house or vehicle as collateral to get the loan. Personal installment loans, on the other hand, are unsecured and their borrowing is based more on the borrower’s creditworthiness and proof of income.

Advantages of Installment loans

do not have credit checks

do not have credit checks

1. Fixed interest rates: It is quite distressing when you wake up to hiked interest rates. Some traditional forms of borrowing have varying interest rates which would in the long run, thereby increasing the borrower’s sum of repayment.

With fixed interest installment loans, your payments remain the same since its interest rates are fixed right from the beginning. You know exactly how much to pay every month. With this knowledge, you can budget your finances carefully so that you can make repayments promptly every month.

2. Longer terms: Long term installment loans can be as long as 30 years. During this period, the borrower can spread out their repayments over the loan term at his or her convenience. This makes installment loans more flexible than other short-term loans.

3. Easy and fast to acquire: Once you have applied for an installment loan and it is approved, you can get the money when the lender deposits the funds directly into your checking or saving account. Qualifying for an installment loan is very simple.

The borrower has to meet the minimal age requirements of 18 years and older. You should also have a recurring income source. You must also provide a valid checking or savings account where you can receive your funds.

4. No credit checks: Some installment loans do not check the borrower’s credit score. Borrowers with bad credit or no credit can borrow payday installment loans.

Installment loans disadvantages

Risk of losing property

Risk of losing property

1. High Interest rates: Due to the fact that interest rates for installment loans are fixed, some lending companies may take that opportunity to charge outrageous rates. This would adversely increase your loan repayment amount.

With the help of an installment loan calculator, you may avoid this pitfall. The installment loan calculator estimates for you the monthly payments and interest rates you are required to pay for the type of loan you choose.

2. Risk of losing property: There are installment loans that require borrowers to put up a collateral in order to secure a loan. In the event that he delays repayment, the creditor has the legal right to call for collection activities. In the long run, the borrower could lose his collateral.

Differences between payday loans and installment loans

Difference B/w payday & installment loans

Difference B/w payday & installment loans

Both payday and installment loans are associated with high interests and they can be easily available without subjecting the borrower to any credit checks. Despite their similarities, they also have their differences.

1. Payday loans are unsecured while installment loans can be both secured and unsecured depending on the loan type.

2. Payday loans are short-term loans that should be repaid on the borrower’s next payday. Installment loans provide longer term borrowing of up to 30 years.

3. Payday loans are paid using a post-dated check. For installment loans, lending companies electronically withdrawn or the borrower pay using a check every month.

4.  Payday loans have extremely hefty interest rates that may be as much as 390% whereas an Installment loan can only go up to about 90%.

How to choose the best loan for yourself

There are certain things you should consider before deciding on the type of loan to use. These include:


Interest rates

 

choose loan with lower interest rate

choose loan with lower interest rate

It is imperative that you choose the type of loan with a lower interest rate. This is because with a higher interest rate, you may end up paying much more in the long run which may force you to take out another loan to repay the former one. Installment loans have considerably lower interest rates compared to payday loans.

Effect on your credit score

Both types of loans may have a negative effect on your credit score if you delay in making payments or in the event that you default. However, making your installments on time every month can help repair your bad credit score. Payday loans, on the other hand, do not improve your credit score.

Repayment preferences

Payday loans are short-term loans. This means they have faster maturity dates and you are expected to repay the loan within a short time, usually by your next payday. Long-term installment loans can take up to 15 years, hence allowing you to plan manageable repayment schedules. This makes installment loans more flexible compared to any other forms of short- term loans. Get an installment loans calculator and see what you are missing on!