April 21, 2008

• Pay Day Loan Agreement

  The "Pay Day Loan Agreement" that all payday lenders must provide is a very important document to understand.  US Law requires that certain terms be disclosed in each loan agreement.  When you apply for a loan, make sure you review the loan agreement carefully.  Here's what to look for. (…)

April 2, 2008

• APR

  The term "APR" or "Annual Percentage Rate" refers to the annual interest rate being charged on a loan.  All payday loan agreements must set forth the "APR" that you are paying.  This allows you to compare one payday loan to another.  For example, if you have two choices: a payday loan at 600% APR, and a payday loan at 1000% APR, you obviously should choose the loan with the lower fee, if possible.  Because payday loan agreements are usually for short periods (of less than 1 month), the APRs of payday loans are very high.  You can use a payday loan calculator to calculate the APR of a given loan and decide if it is right for you.

March 5, 2008

• ACH Network

  Many faxless payday lenders use a network called the "ACH network" to deposit funds into payday loan borrower's accounts and to withdraw funds from the account when the loan is due to be repaid.  The ACH Network is a funds transfer system governed by the rules of the National Automated Clearing House Association, which provides for the interbank clearing of electronic entries for participating financial institutions.

• ACH Debit

  A transaction through the ACH Network originated (by a company such as a payday lender) to remove or withdraw funds from the receiver (the payday loan borrower) bank account.  An ACH debit transaction is typically used to withdraw payday loan fees or payday loan principal at the end of a loan period. 

• ACH Credit

  A transaction through the ACH Network originated by a company (such as a faxless payday lender) to pay a recipient (such as a payday loan borrower).  The credit transaction causes funds to be deposited into the recipient's bank account using the ACH network.

• Non Sufficient Funds

  Otherwise referred to as an "NSF" or "Returned Item".  Non Sufficient funds is when your bank account does not have suffiicient funds to cover a check or other debit transaction.  This can occur frequently in faxless payday loan transactions when your loan payment is due, and the payday lender tries to debit your account for the amount due.  NSF fees can be VERY expensive (the national average charged by banks is over $25)!  Make sure that you know exactly when a debit is going to hit your bank account, and make sure you have enough money in the account to cover the debit.  Payday loans are expensive enough — don't add to the expense by bouncing a payment and incurring an additional NSF fee (or two).  If you won't have enough funds in your account when the loan is due, make sure to CALL YOUR LENDER before the due date to see if you can work something out. 
   

• ABA Number

  A nine-digit number, also known as the bank routing number or ABA number, which is used within the banking system to identify a financial institution. (…)