Bad Credit Loans Blog

Great Tips and Advice for Managing Your Money

America’s Loan Company can help Ohio residents with Bad Credit Personal Loans.  We have three branches, one in London, Ohio, West Jefferson, Ohio, and Logan, Ohio.  Even though we have 3 locations at this time, we are able to help Ohio residents who don’t live near any of our branches with Personal Loan needs, regardless of poor credit.  We are able to do this without you having to come to any of our branches.

I Live Too Far.  How Do I Apply For A Personal Loan?ohio map

You live in Ohio, but live too far to driver to our branches?  No problem.  Loan applications may completed through our website at www.americasloancompany.com.  This application is secured.  Once you submit the application, it gets sent directly to the branch that you chose to process it.  As far as, which branch to choose, it is up to you.  One of our Personal Loan Managers will be contacting you soon after. 

How Do I Send Documents Needed?

For Personal Loans, we require some documents before a final decision is made.  These are last two most recent bank statements, a most recent proof of income, ID, Social Security Card, and a Personal Check.  However, there is no need to bring these in personally.  These may be either E-Mailed or faxed to the office you chose to process the application.

How Do I Sign My Contract?

loan agreement Once the Personal Loan application is approved, there 2 options.  One, sign the loan contract at any of our branches.   Two, we E-Mail a copy of the contract, secured by a password.  You may then print the loan contract, sign it in front of a   Notary (most banks have notaries that do this for free or for a very small fee),  then E-Mail or fax all contract pages back to us.

 

Now That I Am Approved For The Loan, How Do I Get The Funds? 

You do not need to drive to any of America’s Loan Company’s branches to get your Personal Loan funds.  Once we get the contract signed, you may come to any of our branches to get the funds or we can direct deposit the funds directly to your bank account.  hand cash hand

Don’t let late fees accrue on your Personal Loan or at least not for a very long time.  That should be the end of this blog right there.  Unfortunately, so many ignore this money saving rule.  One reason for this I believe is the misconception that a late fee accrues only once per late payment on the loan.  The thinking is “I was late on my January loan payment, and, although I have not made a full payment to make up that payment, I will only accrue one late fee if the future payments clear.”  This is a mistake that will swell up the amount owman thinking of feesed on your debt.

So, How Do Late Fees Accrue?

Example:  Let us assume you don’t make your January 1st Personal Loan payment of $100.00.  February 1st comes along and you make your regular loan payment of $100.00.  America’s Loan Compay’s late fee is $15.00 that accrue after a payment is more than 10 day late.  Therefore, the $100.00 paid on February 1st will be used to make up January 1st payment, plus late fee.  That leaves February 1st loan payment still outstanding.  Then, no extra full payment is made in February and March 1st comes along.  A $100.00 payment is made on March 1st.  But, because February’s personal loan payment was still outstanding, a $15.00 late fee has now accrued for February.  The March 1st payment is then used to cover what was due February 1st, plus late fee.  As you can now guess, this leaves the payment for March 1st still outstanding.  Unless you make an extra full payment, in addition to the regular payment, between March 1st and April 1st, the process will repeat and you will keep accruing late fees.caution high fees

What Is Ihe End Result Of Accruing All These Late Fees?

So, what’s the big deal with a few late fees?  For one it will take longer to payoff the debt.  There will be a bigger principal balance at the end of the loan term.  Also, extra interest will accrue since less principal is paid every time part of a payment it taken to cover a $15.00 late fee.  In the example above for instance, if an extra full payment is not made to account for the February 1st missed payment, within an eleven month period in that same year alone, you will have accrued $165.00 in late fees ($15.00 x 11 months). 

This may also have a negative effect on your credit.  America’s Loan Company does report your credit to TransUnion.  A late payment that is not made current may make your credit history appear as if the account is constantly a payment behind.  

What If I Can Not Make A Full Payment Immediately?

If a payment is missed on your poor credit personal loan and you can’t make it up before the 10 day grace period is up, an option we give is to make a few extra payments over several installments until enough to cover a full payment is collected.  You will be paying late fees over a few payments.  But, it will reduce the total amount of late fees that will accrue otherwise.  For the example above, a person could make an extra $25.00 over the next 4 installments after January 1st.  So, by May 1st a total of an extra $100.00 will have been collected to make up the one full payment that the account is behind.  A total of $60.00 in late fees will have accrued by May 1st. But after May 1st no more late fees would accrue.  In the end $60.00 in late fees over 4 months is better than $165 over an 11 month period in that same year.

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

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