Bad Credit Loans Blog

Great Tips and Advice for Managing Your Money

America’s Loan Company offers affordable Bad Credit Personal Loans.  Our aim is to provide our customers with loans with payments to fit their budgets.  But, why get a Personal Loan from us instead of the typical Title Loan?  After all, you can get a Title Loan approved in under 30 minutes.  Whereas, we may take 1 to 3 days from application to contract signing, depending on how fast an applicant provides documents needed.  The short answer, a little patience will save you money. 

Title Loans Are More Expensive

What does it mean when loan is expensive?  This refers to the amount of fees that you end up paying for the loan.  A.P.R. is a measure used to determine how expensive the loan is.  Title Loans are very expensive compared to America’s Loan Company’s Bad Credit Personal Loans.  Here’s a few points to consider mentioned in a Consumer Finance Protection Bureau’s May 18, 2016 report on Title Loans (You can follow this link if you rather read it https://www.consumerfinance.gov/about-us/newsroom/cfpb-finds-one-five-auto-title-loan-borrowers-have-vehicle-seized-failing-repay-debt/):

  • “One-in-five borrowers have their vehicle seized by the lender:”   BEAR TRAP 400 x 300
  • “Four-in-five auto title loans are not repaid in a single payment:” This means that you most likely to fall into a cycle of debt.
  • “More than half of auto title loans become long-term debt burden:” Since you are more likely to fall into a cycle of debt, according to this report, you are likely to need to re-borrow four or more times.
  • “The typical loan is about $700 and the typical annual percentage rate is about 300 percent,”

Are Our Personal Loans Different?

Our Bad Credit Personal loans are still geared towards customers with poor credit (650 credit score and below).  However, our A.P.R. on Personal Loans are never in the triple digits.  On our Home Page we give a few sample quotes.  For instance, a qualified customer may borrow $1,500.00 over 2 years and have a 33.70% A.P.R..  Since our Bad Credit Loans are not as expensive and made to fit your budget, you are not as likely to fall into a cycle of debt. Therefore, in the case that we have to use your vehicle's title as security for a Personal Loan, you are less likely to have the loan go into default and have to deal with a repossession.     best personal loan

As mentioned in a previous blog, always compare shop between lenders and get quotes.  Although we may not be as cheap as getting a loan from a bank, we are very confident that our fees are much lower than what you will pay with many other lenders.

When deciding whether to apply for a Personal Loan with America’s Loan Company versus getting a Payday Loan with other vendors, take into account several factors.  Do some investigating to figure out factors such as number of payments that you will have to pay the debt, the total in fees that will be paid, and whether or not it can lead you to a cycle of having to re-borrow over and over. 

Personal Loanspersonal loan chalkboard 480x360

America’s Loan Company’s Personal Loans are intended to be affordable and not lead to a cycle of debt.  Our terms are 6 months to 5 years.  Our fees are typically lower than most competitors.  For instance we may do $1,500.00 loans with terms of 24 months and biweekly payments of about $40.00 and an A.P.R. close to 34%.  Total fees over 2 years would close to $580.00.

Payday Loans

Payday neonAs a comparison, the typical Payday Loan is not intended to be affordable and can get you into a cycle of having to borrow and re-borrow.  The one thing that a Payday Loan may do that we can’t is give you a $1,500.00 in less than an hour.  The typical payday lender is counting on the applicants’ lack of patience. 

Terms for Payday Loans are usually 2 weeks compared to our personal loans that can have 6 months to 5 years.  Total in fees that will be paid with a Payday Loan will also be typically higher if you get into the habit of having to pay the loan and then have to take another loan.  For example, according to Check Into Cash’s website, their fees for a $1,500.00 Payday loan are $392.97.  That’s total fees of $392.97 in just 2 weeks with an A.P.R. of 683.02%.  Do the math to see the amount in fees that will be paid if you need to pay and then immediately have to re-borrow that $1,500.00 over another 2 weeks. 

In short, if you have bad credit and need a Personal Loan, pay attention to the fees that you will pay between say our Personal Loans for people with bad credit and a Payday Loan.  We may not able to approve your Personal Loan in 20 minutes like some higher priced competitors can do with the Payday loan.  But, in the end a little patience may save you a lot in fees.  Not to mention saving you from a cycle of debt.

During this time in year, January to March, we get quite a few customers asking for 10 day payoff quotes.  As people start to receive their income tax refunds, they attempt to pay their Personal Loans in full.  At first this may seem like a great idea.  But, what we witness quite often is that, in the long run, it does not give the desired result of not staying in debt.  Here are some points to consider if you are planning to use a large chunk of your tax refunds to pay on a large debt.

broken piggy bank 400 wideEarly Payoff - Pros  - Save On Interest

One benefit of paying a Personal Loan in full early is that you s

ave on interest.  The loans through America’s Loan Company are amortized.  So, every payment over the term of our Bad Credit Loans carries a portion towards principal and interest.  Most of the interest is paid at the beginning of the loan.  Therefore, the earlier a loan is paid off the more one saves on interest.

Early Payoff - Pros  - Get Rid Of Monthly Burden

Another benefit of paying a Bad Credit Loan in full early is the freedom of not having that debt.  Not having to spend $100.00 a month on a debt, for instance, is $100.00 a month that could be put in a savings account or used towards emergencies.  Less debt allows more breathing room financially, if one is disciplined enough to engage in saving money. in an account.

Early Payoff – Cons – Leaving Yourself Too Short

But, paying off a Personal Loan early can result in having to borrow again a few short months down the road.  It is no unusual for customers to leave themselves too short in “emergency funds” after paying a debt in full early.  So, there may be enjoyment in not having to pay on a debt for a few months.  However, when another unexpected expense occurs, like car or house repairs etc., one may find himself with little in the “emergency fund” coffers.  This results in having to borrow more funds.

Early Payoff - Our suggestion

Our suggestion is to make sure you have an adequate amount of “emergency funds” in a bank account or under your bed.  Take a deep breath and start cranking down some numbers.  Figure out based on past years how much money would be adequate to have for emergencies.  That may mean that you can’t payoff a debt in full right away.  But you can start making extra payments.  This by itself should save you money on the interest in the end.  For instance, if the payoff on a Personal Loan is $4000.00, paying just $2000 will shorten the term of your debt and save on interest.  Also paying a little extra with each payment should have the same result.  A more measured approach to paying a debt in full, with a little patience, in our opinion, may reduce the need borrow more money sooner as compared to later.

Early Payoff or Not, We Appreciate Our Customers

Don’t get us wrong.  America's Loan Company welcomes the opportunity to help Ohio residents with any Personal Loan needs.  Our point here is that making a big payoff payment on a Personal Loan may be counter productive.   It may be better to make extra payments little by little.  Thank you for choosing us as your lender.

2/27/18

In Ohio not all Personal Loans for people with bad credit are created equal. 

Get A QuoteOhio consumers should always ask lenders for both monthly payment quotes and quiotes on total fees paid on the loan amount that they intend to borrow.  In our experience, once we approve applicants for a Bad Credit Personal Loan, it is not unusual for applicants to just want to come in and sign a contract before they even know what the monthy payments will be. 

Get A Quote:

America's Loan Company will always give loan applicants a quote on their Personal Loans.  But, it is a little scary when we think of how many Ohio residents apply for Personal Loans with other companies, never get a quote before signing a contract, and end up with debts too expensive to pay.  This has the potential of leading to ugly experiences like circles of debt, lawsuits, wage garnishments, repossessions, Etc..

Due to the different licenses offered under the state of Ohio, non-bank lenders can offer loans with the same name, like Personal Loans, and yet charge vastly different amounts.   Companies that offer Bad Credit Personal Loans in Ohio my operate under a CSO or Credit Services Organization, Small Loan, Second Mortgage Loan, or Ohio Consumer Installment Loan, licenses, to name some.  All of which allow lenders to charge different fee amounts.  So, asking for a quote before giving your John Hackock will give the best protection against getting into a loan you can't repay. 

Shop Around:

Consumers should always remember that they are not obligated to sign a contract.  Don't be afraid to shop around for lenders who charge lesser fees.  This may require patience.  But, a little patience and shopping around will most likely save a bundle in fees, not counting with less stress and headaches associated with not being able to pay a debt.

 

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