What is a Payday Loan?

A payday loan is a short term loan used to cover immediate or unexpected expenses and is typically offered to people with a stable source of income. The idea is to get the loan as soon as you want it, before your payday, and pay it back on your next payday. Getting a loan for more than 30 days could depend on your arrangements with the payday lender. The amount to borrow also differs but the average payday loan in Canada is about $280, although you could request for up to $1,500. Failure to pay back this loan on the agreed date could result in more fees and interest charges that would increase your debt.

What to Expect When You Take a Payday Loan

Requirements

Before applying for a payday loan, ensure you meet the following requirements:

• At least 18 years of age
• A government-issued ID or a social security number
• A stable source of income
• An active bank account
• A permanent address

Requests from the payday lender:

• A form to allow the lender to withdraw the exact loan amount from your bank account, including fees and interests.
• A post-dated cheque for the total loan amount.
• An agreement from the lender that contains all the details for you to sign.

Are Payday Loans a Better Option?

There are a lot of arguments surrounding whether payday loans are safe or not. While advocates argue with the fact that it helps people with poor or no credit scores, others object with the fact that it traps people into debt. However, it depends on perspective and how the loan is being managed. 

A payday loan is meant to cover up for unexpected costs and not for things that can be avoided or kept for later. Payday loans are easier to access and have fewer requirements compared to bank loans and other kinds of loans. You also do not have to worry about your credit score and it is not in any way secured by personal property, so you can worry less about losing your property. 

To be on the safe side and ensure you don’t run into debt from taking payday loans, you can review the free financial education materials from the Canadian Payday Loan Association. Also, ensure you pay the loan off on the due date to avoid further costs. 

Risks of a Payday Loan

While payday loans are easier to get, the fees and interest rates are much higher than banks, credit unions, and credit cards. Exceeding the payment deadline would incur a higher rate, as the lender could add late fee charges and interest for the days post-deadline. The lender could also contact a collection agency, of which an action from them could affect your credit score. It could also lead to a court sitting.

Conclusion

While there are so many platforms and agencies available to lend you money, you have to be careful with the one you affiliate yourself with. A little mistake in your payday loans could keep you in unexpected debt. Accessing payday loans in Canada, for example, is an easy and fast way to go about it. While no platform can guarantee 100% security, signing up with the best-recommended ones would reduce security risks and save you from incurred debts. 

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When you own a home and are financing it through a mortgage, the biggest and most important thing to avoid is foreclosure. Foreclosure is the action of taking possession of a mortgaged property when the homeowner fails to keep up their mortgage payments. Basically, if you don’t make payments to the mortgage company than your house will be taken from you. The most obvious way to avoid your house being foreclosed upon is to pay your bill on time and don’t get behind on payments. The best way to prevent this is to obtain a Canadian mortgage rate that you can afford. There are also a few other tips you can follow if you encounter a situation where you might have trouble keeping up.

Communicate

The key thing for borrowers is to communicate with the lenders. Most lenders are easily accessible online but they can be contacted via phone as well. If you have any indication that you might have trouble making your payment to the mortgage company than let them know. If you make a phone call to make them aware of a short or long term hardship than they are more than likely to be understanding. Ignoring the problem is the worst thing you can do. When you ignore them and don’t send money or don’t answer their phone calls when they call to collect than you will incur more finance charges, debt collector notices and possible reporting to collection agencies. Once they understand the problem than they will probably work with you.

Get Help

If an unforeseen hardship or life event occurs, it is also good to use the resources available to you. There are many organizations that offer applications for assistance depending on your circumstances.

Avoid Scams

Because people are so desperate during these times, they also fall into the arms of scammers who try to take advantage of them. People are out there who look for people close to foreclosure and they prey on them. Be sure you are on your toes at all times when it comes to disclosing your information. A big indicator of this is that they may ask for a fee before providing services.

By following these helpful tips, you will be able to maneuver through a financial hardship if it comes your way.

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You probably have seen a car title if you have owned a car before. Every vehicle on the road has a title. Vehicle titles are documents issued by states to indicate the current owner of the car. 

The designations differ from state to state. However, there are some generally accepted titles across the country. The different types of vehicle titles represent the current condition of the car.

What Is A Car Title?

A car title is the “evidence of ownership.” The information found on the document includes the make, model, year, and car history. The history is to ensure that anyone who later buys the car is made aware of its history.

Typically, cars are bought from dealers. The dealer fills out the title application for the car owner and sends it to state officials. If the vehicle is purchased with an auto loan, the information of the lender will be included in the title as lien holder.

A new title is issued in response to various events which results in the vehicle being damaged or stolen. The car title is also an essential document for determining the valuation of the car. 

Classification of Car Title

There are different types of car titles. The condition of the vehicle will determine the title designation issued on it.

Clean / Clear Title

Most cars on the road have a clean title. It’s the title issued when on a car. It shows that the car hasn’t suffered any major damage that can massively affect its value since it was manufactured. 

A clear title is however issued to a clean title car that has no financial lien preventing its sale. The difference between the clean and the clear titles is that the auto loan of the latter has been fully repaid by the owner.

However, a clear title doesn’t always indicate complete ownership. The vehicle owner can still obtain an auto title loan or refinance with the car while keeping the title.

Salvage Car Title

This car title is issued when a car is involved in a significant accident that leads to losing above 75 percent of its value. A salvage vehicle can be repaired and made roadworthy, but will never be issued a clear or clean title. It’s also unlikely that a lender will refinance a car with a salvage title.

In some states, salvage title means that additional repairs must be completed for the car to be driven again. So, various titles are issued based on the level of damage, including the following:

Junk/ Parts Only Title

This title is issued when the car is damaged beyond repairs and is ineligible for road use. It entitles the owner to hold on to the vehicle while the parts are being sold or scrapped. Some states consider salvage and junk titles as the same.

Repairable/ Reconstructed or Restored

This type of car title is issued when the damage to a car is repairable. This will be the title of the vehicle until it’s fully repaired and inspected by a state agent. Then a restored or reconstructed title will be issued.

If the owner of the car moves to a different state, the authorities may request that the vehicle be inspected again by an authorized agent to add it to their record. 

Recovered Stolen Vehicles

Some states classify stolen cars in the salvage class. This may, however, be dependent on how long the vehicle was missing and the current state at which the car was recovered.

For instance, if the original engine was removed and replaced with an older or faulty one, then it will be declared salvage. The vehicle will have to be checked for any suspicions. This law is present in 11 states, including Arizona, New York, Florida, Georgia, and Minnesota.

Buying A Salvage Car

You should be cautious when buying a salvage car. They mostly require extensive repairs and may cost you more to insure. It also comes with a massive road risk. Only buy such cars from reputable dealers or mechanics.

Memorandum Title/ Out-of-State Title

Some state may require that non-residents of that state have a specific car title to use whenever they are in the state. The title recognizes the driver or the stated owner as the vehicle owner. A memorandum title also comes handy if you live in a different state, but regularly commute in another state. A student can also get this car title for their car when schooling in another state.

Bond Title

This is a type of car title issued on a car which the individual who possesses it has no proof of ownership or a title of the transfer. The title is issued for three years after which a clear title may be issued if no valid claim is made and the vehicle retains its value. The process of obtaining a bond title is, however, very lengthy and expensive. 

Branded Car Titles

This involves branding a vehicle based on a specific situation or the condition of the car. Typically branded vehicles carry negative connotations. Vehicles that have experienced a fire, flood, collision, etc. are usually branded. For instance, the cars that were affected by Hurricane Katrina in 2005 were stamped “flood damaged” by the Authority in Texas. 

Title Washing 

An attempt to remove, conceal, or alter the title designation of a vehicle will be a violation of the law. The situation is known as title washing or laundering. The title washing designation is common in all state and is considered a crime with severe penalties.

Certificate of Destruction

When an insurance company pays claims on a damaged vehicle, which they insured, they have the option to obtain a title of destruction. This designation implies that the car will be destroyed and never be used again. 

This is mostly done if the vehicle is damaged beyond repair or the insurance company feels it’s not road worthy. A destruction certificate is obtained when essential items like airbags, frames, and others are damaged in the car.

It’s important to note once more that title designation differs across states. You can check your local DMV or state secretary for any information regarding your car title.

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