Oklahoma’s Payday Loan Laws are Tolerant Says Survey

According to the recent national survey the small-loan laws in Oklahoma are charging the highest interest rates in the history of payday loaning in the United States today.

A research conducted by the Pew Charitable Trusts entitled “Payday Lending in America: Who Borrows, Where They Borrow and Why” has found that 13 percent of the population of Oklahoma are the highest in the payday loan customers in the market today across 32 states.

Out of 49,684 of the residents, 5.5 percent are using payday loans to pay their debts in the last five years. Payday loans are short-term loans consisting of small amounts which have the tendency to get very expensive. People who apply for these loans are usually those who do not have the qualifications to get a credit loan.

In Oklahoma, borrowers are only allowed to have only one payday loan and the state caps the lenders at $500 with a maximum fee of $65. But the District of Columbia along with 14 other states does not have any payday loan stores.

According to the State Sen. Rick Brinkley who also holds the position of chief operating officer in the Better Business Bureau of the eastern part of the state the Pew study’s classification of their payday loan laws is indeed lenient, for even if the law allows the lending there have been few customer complaints about the lenders.

Experts say that payday loans usually carry out a chain reaction for debt because the borrowers tend to renew their loans again and again until the service cost increases and becomes even more expensive.

Studies show that the minute people start to turn to payday loans it would not be very easy to get out and it would take years to pay off the whole debt.

The study by Pew has identified living expenses like rent and utilities expense to be the most common reason for people to apply for payday loans.

Repeat Homebuyers Now Qualified for Delaware Loan Program

According to Delaware State Housing Authority, there will be a change in its homebuyer program which will permit non first-time homebuyers who are eligible to buy a home in Delaware through a 30-year, low-interest, fixed-rate mortgage loan.

In the past, the homebuyer program of DSHA was only available to income-qualified, first time homebuyers. The present Home Again loan program permits eligible persons who have owned a house before to utilize DSHA’s array of mortgages.

Previously, second-time or repeat homebuyers most of the time had money to buy a new home using the earnings created from the sale of the old home. However, that is not what’s happening in reality.

Moreover, families who want to downsize to a home that is more suitable their needs or finances may ask help with down payment and closing costs. At present, DSHA has considered this. As a result, it expanded eligibility to help repeat homebuyers.

According to Governor Jack Markell, Delaware’s housing market and economy will progress because of the increase in mortgage opportunities. In addition, Anas Ben Addi, director of DSHA, said that this extended eligibility is one of the steps in achieving DSHA’s mission to offer opportunities to all Delaware residents to benefit from homeownership. Addi also said that they are constantly developing ways to provide individuals access to superior homes all over the First State.

Home Again loan program provides assistance to potential homebuyers with financing at below-market interest rates. To be eligible for this loan program, the buyer’s income must not go beyond $93,725 and the property pursued by the buyer must not go beyond $387,692.

Together with Home Again, DSHA declared the Loans for Heroes mortgage product which presents lower rates for qualified veterans.

Fred Fortunato, vice president of Project Management at Benchmark Builders Inc., said that the first-time homebuyer programs by DSHA have been an admired accomplishment for Delaware.

The Fate of Payday Stores Rest on The Hands of The People

Due to the increasing problems that the State of Missouri is facing with payday loans the Missouri Supreme Court has decided on their hearing last July 31 to put the fate of these lenders to the voters of the state on November. This decision has pleased the State Representative of Columbia, Mary Still and two other politicians who called this decision a triumph for the populace of the state.

A 36 percent limit on the interest charges will be adapted for payday loans if ever the issue will be approved in November. Currently the average interest rate according to Branson Wood is 445 percent in Missouri. Wood believes that the issue will definitely be approved by the voters since it is beneficial to both parties in the state. Many of the state’s leaders are supportive to it; among them are Katie and Branson Wood. They believe this will be beneficial of the people of the state and the economy as well.

Payday loans in Missouri have high interest rates and soon, there will be an end to them. The Woods and Still are actively campaigning on their petition by the issue; and now, only the appropriate signatures are needed so that the State Secretary’s signature can be verified and the issue will be solved.

Law makers are confident that the signatures will not be a problem for they were able to get 180,000 of them which are double than the number they were required.  The Supreme Court’s decision is now quoted by the masses as “a victory for Missouri consumers and the Missouri economy,” according to Still.

After the Circuit Judge Jon E. Beetem hadrejected the balloting for the issue, Branson Wood appealed the case to the Supreme Court and they were pleased that it has approved their call.

New and Improved Customer Care for Payday Loans

A new Consumer Charter was formed by four major trade organizations that represent 90 percent of the whole payday loan business in the United States. This new trade charter aims to further develop the standards of the market and increasingly improve service for customers.

Now, payday lending stores must make new commitments to consumers as stipulated in the Charter. For instance, they must comprehensively explain what a payday loan is and how these short-term loans work. Fees and other charges must also be illustrated clearly for the benefit of the customer. It is also illegal under this new charter to force or pressure customers to pay their loans or extend loan terms.

The financial capability of customer must be thoroughly considered by the lenders so that they could afford the loans. In order to make this possible, it will be mandatory for payday loan applicants to undergo thorough credit checking and assessments. If the debtor is unable to repay the loan or is having difficulties in paying their current loan within the span of 60 days then additional interest and charges on the loan would be frozen by the payday lenders.

If for example, the payday loan store decides to recover the customer’s debt through continuous payment authority, they should inform the client within three days prior to it. It is essential that they should also explain how this continuous payment authority works and inform customers that they have the civil right to refuse to it. Customers are given the right to choose what is best for them.

The new charges will be effective on November. 26 this year, this is going to be adopted with the existing codes of practice of payday loan lenders.

Caroline Walton, the current president of the Consumer Finance Association says that they have consulted the Government and consumers in the drafting of the Charter, this is essential in making payday loans’ standards better and more transparent.

Assess Financial Standing Through Debt-to-Income Ratio

Since November 2007, credit card debt has reached its highest ever. According to recent statistics from the Federal Reserve, an increasing number of consumers rely on credit cards for purchases since revolving debt increased by $8 billion, which in turn increased the overall credit card debt to $870 billion.

The trouble with credit card debt is that it can instantly become unmanageable. An increase in credit debt means a corresponding increase in monthly payments and the amount of debt accumulates even further.

If you observe that your credit card bills are increasing, start keeping tabs on your debts and finances. One tool that can help you is your debt-to-income ratio, which gives an accurate measure of your financial status and shows the relationship between your debt and your income.

To compute for your debt-to-income ratio, just divide your total monthly debt by your total monthly income and multiply it by 100. Next, the following ratios provide an assessment of your financial status.

If your ratio is lower than 36 percent, then you have a good financial standing and must maintain at this level by building your savings and making investments.

If your ratio is between 37 percent and 42 percent, then you have an acceptable financial standing but must still strive to cut down your debt. Try paying above the minimum amount required on your credit card bills so that it will decrease your debt more rapidly.

If your ratio is between 43 percent and 49 percent, then you are in the verge of financial trouble and must take corrective actions to immediately manage your finances. Consider balance transfers or debt consolidation loans to remove your outstanding debt.

If your ratio is 50 percent or above, then you have a financial problem so you must ask for assistance. Consider a financial planner or seek help from a credit counseling agency to discuss your options.