The US Federal government is investigating purported payday lending practices being carried out in native American tribal lands. There are payday lending firms that are said to be operating under companies owned by native American tribes. The crucial point is that the regulators are trying to protect consumers and the tribal leaders on the other hand are defending their economic rights since they claim to benefit from such trading of undercover payday lending practices.
The aspect of sovereign immunity is very complex but that said and done, it does not grant any group of people to operate in dealings that are outlawed. There is a problem in the way in which legal matters that touch on the native American tribes are handled in courts.
For example, cases put forward against apparent tribal payday loan operations are usually dismissed or tossed out of state court on grounds of sovereign immunity. The legal concept does not bar federals from taking appropriate actions against payday firms operating under cover or on false pretence. There is harm being created on the citizens while the native American tribes leaders claim that their sovereignty is being undermined.
Tribal leaders claim that the actions of Consumer Financial Protection Bureau- CFPB are unfounded and most of the payday lending firms that run under the auspices of native tribes are in fact owned and controlled by native Americans. They further claim that the services are genuine and should not spark tension or legitimacy doubts from the federal legal arms. The leaders argue that they will fight any incursion that is perpetrated on their rights.
However, there are also claims that these leaders could be shielding businesses that could be ruining their sovereignty. If not checked, the sovereignty of native American tribes could be ruined by their insatiable practices. There have been claims that a particular payday lender has unfairly subjected borrowers who are debt-burdened to travel to South Dakota to appear before a tribal court.
This is a court, which does not have jurisdiction over their cases, and therefore, there is need for urgent redress on this issue. Consumers may be suffering under these payday loan firm purporting to be operated by natives. Consumers are perhaps being subjected to abusive collection tactics and lofty or inflated fees. The question is; should the Federal government remain silent over the payday loan issues being witnessed in the native American tribal lands?
Showing posts with label payday loans. Show all posts
Showing posts with label payday loans. Show all posts
Friday, January 03, 2014
Tuesday, November 19, 2013
When Are Payday Loans a Good Option
Payday lending is a financial term that has gained more popularity in the recent years. The growth of payday lending has increased significantly and this is because lenders are finding a quick way of making money while borrowers are getting a fast and convenient way of obtaining emergency cash. Payday loans are not designed for every other borrower and this is because they come with hefty interest rates.
Instead of completely locking out consumers with bad credit score from obtaining credit facilities, lenders have studies the needs of the market and are now providing these loans to lenders who desperately need them. Although there has been a lot of criticism on the way these loans are provided, it is certain that market is not shrinking anymore. One surprising thing is that borrowers are willing to borrow at those high interest rates.
Consumers with bad credit and who cannot access credit facilities from conventional lending institutions can now have a piece of mind. On one perspective, payday loans or cash advance can help borrowers maintain a good credit by using the money to make payments for their credit cards. Although the loans are expensive, they can help you avert further damages in your credit report considering that you are in bad credit and you need to build the reputation of your credit score.
Any further damage by late payment is not called for at this time you are building your score. People use next payday check loans to protect their credit score. The cumulative interest levied on missed credit card payments can have a bad effect on a person’s finances and when this is coupled with the effects late payments can cause on a borrower’s credit history, it is viable to use the payday loans to clear the credit card balances.
Payday loans can enable you get through a rough financial spot such as paying for damages of your car so that you can commute to work conveniently. However, these loans should not be taken lightly for any financial need. They should be obtained for very critical financial needs such medical bills, college fees, and payment of credit card debt to avert late payments.
There are other alternatives, which could be used by people with bad credit and they include peer to peer loans, which offer low interest rates but then again there are restrictions as to who can be granted such loans. One peculiar thing with payday loans is that they favor those people with very bad credit score and who cannot be considered for a credit facility by other lenders.
Despite the fact the traditional lending institutions are now offering some form of short term loans similarly to payday at much cheaper costs, they still cannot meet the needs of the market. In addition, the kind of customer being served is extremely in poor credit score. The main pitfall is that the payday credit facilities will not help you solve the real problem of bad credit. You are likely to get into a borrowing circle where you borrow, repay and borrow again. This is because you are using the money you could have reserved for other financial needs to meet the fees and interest rates charged against the payday loans.
Instead of completely locking out consumers with bad credit score from obtaining credit facilities, lenders have studies the needs of the market and are now providing these loans to lenders who desperately need them. Although there has been a lot of criticism on the way these loans are provided, it is certain that market is not shrinking anymore. One surprising thing is that borrowers are willing to borrow at those high interest rates.
Consumers with bad credit and who cannot access credit facilities from conventional lending institutions can now have a piece of mind. On one perspective, payday loans or cash advance can help borrowers maintain a good credit by using the money to make payments for their credit cards. Although the loans are expensive, they can help you avert further damages in your credit report considering that you are in bad credit and you need to build the reputation of your credit score.
Any further damage by late payment is not called for at this time you are building your score. People use next payday check loans to protect their credit score. The cumulative interest levied on missed credit card payments can have a bad effect on a person’s finances and when this is coupled with the effects late payments can cause on a borrower’s credit history, it is viable to use the payday loans to clear the credit card balances.
Payday loans can enable you get through a rough financial spot such as paying for damages of your car so that you can commute to work conveniently. However, these loans should not be taken lightly for any financial need. They should be obtained for very critical financial needs such medical bills, college fees, and payment of credit card debt to avert late payments.
There are other alternatives, which could be used by people with bad credit and they include peer to peer loans, which offer low interest rates but then again there are restrictions as to who can be granted such loans. One peculiar thing with payday loans is that they favor those people with very bad credit score and who cannot be considered for a credit facility by other lenders.
Despite the fact the traditional lending institutions are now offering some form of short term loans similarly to payday at much cheaper costs, they still cannot meet the needs of the market. In addition, the kind of customer being served is extremely in poor credit score. The main pitfall is that the payday credit facilities will not help you solve the real problem of bad credit. You are likely to get into a borrowing circle where you borrow, repay and borrow again. This is because you are using the money you could have reserved for other financial needs to meet the fees and interest rates charged against the payday loans.
Monday, November 18, 2013
Online Payday Loan Peddlers: The Dimming Future of Payday Loan Practices
The Federal is put at task to counter the abusive role of payday lending operators who are running payday lending shops purported to be owned or operated by native American tribes. Stepping into the lending environment where state regulators have failed may not be easy and the federal needs to do more to protect the consumer. Through the consumer Financial Protection Bureau- CFPB, the federal has been lobbying for investigations into the operations of payday lending in tribal lands of America.
Both the CFPB and the Federal Trade Commission believe that some of the increasing payday lending operations are controlled and or owned by non-native American lenders who are abusing their business operations rights to trade under the auspice of native American tribes’ rights of sovereignty. This is a move aimed at shielding themselves from the consumer protection legislation.
The payday loans that carry interest rates as high as 750 percent are available online to native Americans who live on reservations and anyone else in the U.S. Payday loans have been described as predatory lending practices that exploit the already financially crippled consumer. According to State and Federal investors, some of these lending operations swindle customers of their money.
Most of these consumers are already struggling with their bad credit reports and they have been underserved by traditional lending institutions like banks. The payday lenders deceive customers about the costs of the credit facilities and engage in scrupulous and unlawful collection activities.
These lenders have however remained largely out of reach and the federal is pounding on how it could apply the law to trap them. The problem is exacerbated by the fact that tracing these peddlers online is such as daunting tasks. The native American tribal leaders have come up to defend the operations of these lenders saying that the tribes benefit from the positive economic gains realized from the revenues collected through these lending practices.
Some of the economic benefits cited are such as education, medical care, and other basic necessities. The severity immunity of the native American tribes puts legal challenges to the application of consumer laws. The legal concept of severity immunity of native American tribes is complex but when it comes to commercial activities like casino gambling, cigarette sales and payday lending operations, that immunity hinders the legal applications of consumer protection regulation bodies.
Many of the cases put forward against tribal payday loan practices are thrown out of the court on grounds of severity immunity. The issue of payday loan practices in native American lands is quite sensitive. According to the prevailing legal conditions and application of law within the native American tribal lands or reservations, there is a likelihood of protracted litigation over the role and authority of CFPB.
It is unlikely that CFPB will assert any authority in the near future. Until then, it is expected that these lending practices will continue to thrive amidst an ailing consumer group that does not have the privileges to access loans from traditional or other lenders due to their bad credit reports. These are consumers who are in desperate need of cash and they cannot get it from other lenders and the only option they have is to rush for the easily available but highly-charged payday or next paycheck loans. Surprising, the consumer is willing to pay the high interest rates charged on these loans.
Both the CFPB and the Federal Trade Commission believe that some of the increasing payday lending operations are controlled and or owned by non-native American lenders who are abusing their business operations rights to trade under the auspice of native American tribes’ rights of sovereignty. This is a move aimed at shielding themselves from the consumer protection legislation.
The payday loans that carry interest rates as high as 750 percent are available online to native Americans who live on reservations and anyone else in the U.S. Payday loans have been described as predatory lending practices that exploit the already financially crippled consumer. According to State and Federal investors, some of these lending operations swindle customers of their money.
Most of these consumers are already struggling with their bad credit reports and they have been underserved by traditional lending institutions like banks. The payday lenders deceive customers about the costs of the credit facilities and engage in scrupulous and unlawful collection activities.
These lenders have however remained largely out of reach and the federal is pounding on how it could apply the law to trap them. The problem is exacerbated by the fact that tracing these peddlers online is such as daunting tasks. The native American tribal leaders have come up to defend the operations of these lenders saying that the tribes benefit from the positive economic gains realized from the revenues collected through these lending practices.
Some of the economic benefits cited are such as education, medical care, and other basic necessities. The severity immunity of the native American tribes puts legal challenges to the application of consumer laws. The legal concept of severity immunity of native American tribes is complex but when it comes to commercial activities like casino gambling, cigarette sales and payday lending operations, that immunity hinders the legal applications of consumer protection regulation bodies.
Many of the cases put forward against tribal payday loan practices are thrown out of the court on grounds of severity immunity. The issue of payday loan practices in native American lands is quite sensitive. According to the prevailing legal conditions and application of law within the native American tribal lands or reservations, there is a likelihood of protracted litigation over the role and authority of CFPB.
It is unlikely that CFPB will assert any authority in the near future. Until then, it is expected that these lending practices will continue to thrive amidst an ailing consumer group that does not have the privileges to access loans from traditional or other lenders due to their bad credit reports. These are consumers who are in desperate need of cash and they cannot get it from other lenders and the only option they have is to rush for the easily available but highly-charged payday or next paycheck loans. Surprising, the consumer is willing to pay the high interest rates charged on these loans.
The Complex Nature of Payday Loans and Why Credit Unions Cannot Bridge the Gap
Despite the booming payday lending business, the complexities of this market seem to make it impenetrable by lending institutions like banks and credit unions. Payday loans also referred to as predatory loans are designed for a very particular group of consumers. These are consumers ailing with demise of failing to meet their financial obligations. The consumers have categorically been underserved by traditional financial institutions because of bad credit history.
Banks and traditional lending institutions feel that they risk their business by dealing with this group of consumers. However, there are payday lenders who are willing to take the risks and offer financial help to the consumers with bad credit reports and who cannot access loans from credit unions and banking institutions.
In recent years, banks and credit unions seem to be offering some type of short term loans similar to payday loans. A presentation by the National Credit Union Foundation entitled “Real Solutions to Members’ Payday Loan Needs” shows that consumers are saving millions of dollars in fees through credit unions. This breakthrough is achieved by offering payday loans at break even prices.
This is certainly a positive move by the credit unions to offer such a high stake loaning facilities. The big question is; what kind of consumers are benefiting from these loans? Traditional payday lenders deal with a very peculiar consumer who has tainted score and cannot access loans from other institutions. Although credit unions can offer payday loans at cheaper rates, it is most unlikely that they will serve the market.
The number of people with bad credit and who cannot access loans from banks has increased following the aftermath of recession. This means that there is high demand for fast cash that does not require credit check. Credit unions may not be willing to risks their operations by immensity venturing into the payday business.
Operating at breakeven point is purposely meant to help the consumer but unfortunately the demand is too high. Those consumers with very deep financial crisis and need fast cash will end up seeking for payday loans. There is also an argument that encouraging credit unions to provide payday loans means that they are engaging in a manner that is likely to spar disagreements among the financial regulators and consumer protection bodies.
The credit unions are competing directly with traditional payday lending operators by selling short term loan at high prices than they are actually allowed to charge on any other credit products. However, the consumers being served by the credit unions may not necessarily have poor credit score and they may be able to negotiate for other low priced loans.
Credit unions may further limit their payday loan offers to consumer who have verified income, have no delinquent loans, and are not in the course of filing for bankruptcy. This means that there is still a marginalized population that may not be able to access the credit unions payday loans. In essence, the complex nature of the payday loans consumers may not allow credit unions and other institutions to venture extensively in this business. The risks involved are just too high to bear and the regulations cannot allow the credit unions to raise the interest rates beyond certain margins. This means that payday lenders will have less competition and thus the rates may not subside any soon.
Banks and traditional lending institutions feel that they risk their business by dealing with this group of consumers. However, there are payday lenders who are willing to take the risks and offer financial help to the consumers with bad credit reports and who cannot access loans from credit unions and banking institutions.
In recent years, banks and credit unions seem to be offering some type of short term loans similar to payday loans. A presentation by the National Credit Union Foundation entitled “Real Solutions to Members’ Payday Loan Needs” shows that consumers are saving millions of dollars in fees through credit unions. This breakthrough is achieved by offering payday loans at break even prices.
This is certainly a positive move by the credit unions to offer such a high stake loaning facilities. The big question is; what kind of consumers are benefiting from these loans? Traditional payday lenders deal with a very peculiar consumer who has tainted score and cannot access loans from other institutions. Although credit unions can offer payday loans at cheaper rates, it is most unlikely that they will serve the market.
The number of people with bad credit and who cannot access loans from banks has increased following the aftermath of recession. This means that there is high demand for fast cash that does not require credit check. Credit unions may not be willing to risks their operations by immensity venturing into the payday business.
Operating at breakeven point is purposely meant to help the consumer but unfortunately the demand is too high. Those consumers with very deep financial crisis and need fast cash will end up seeking for payday loans. There is also an argument that encouraging credit unions to provide payday loans means that they are engaging in a manner that is likely to spar disagreements among the financial regulators and consumer protection bodies.
The credit unions are competing directly with traditional payday lending operators by selling short term loan at high prices than they are actually allowed to charge on any other credit products. However, the consumers being served by the credit unions may not necessarily have poor credit score and they may be able to negotiate for other low priced loans.
Credit unions may further limit their payday loan offers to consumer who have verified income, have no delinquent loans, and are not in the course of filing for bankruptcy. This means that there is still a marginalized population that may not be able to access the credit unions payday loans. In essence, the complex nature of the payday loans consumers may not allow credit unions and other institutions to venture extensively in this business. The risks involved are just too high to bear and the regulations cannot allow the credit unions to raise the interest rates beyond certain margins. This means that payday lenders will have less competition and thus the rates may not subside any soon.
Bad Credit Payday Loans Technically Long-term Credit Facilities!
Interesting research findings on bad credit payday loans are being witnessed as more studies are being done and one conclusion is that these loans are technically long term credit facilities. The payday loan market has previously lacked any credential research but today we are seeing more studies about this lucrative financial market. The truth is that you may not believe the reality on these payday loans. Critical information points out that these loans are technically long term and therefore, they are not serving the purpose they are intended to serve. Therefore, the big question is; are payday lenders sitting in their cocoons hoping that the market takes its own course? Well! Here is the reality about payday loans;
Payday loans are presented as short term loans were you get the cash now and pay in your next paycheck. But this is not the reality on the ground as what is happening is that many consumers are either rolling over the loans or repaying the current loan and taking a new one. According to a report released by the Consumer Financial Protection bureau- CFPB, it was found that as many as a-third of the borrowers were taking more than 11 loans and not more than 19 loans in one year.
This means that in a period of 12 months, consumers were borrowing between 11 and 19 payday loans. In the same report, it was also revealed that about 14 percent of borrowers were taking about 20 or more payday credit facilities within 12 months. This clearly demonstrates that these loans are not short term but they have been transformed to long-term credit facilities.
Since the lenders are on business mission, they encourage their clients to roll over or take new loans after repaying their present ones. This makes the whole structure of payday loans like wonga loans ideally unrealistic. Another surprising finding is that the average borrower is a consumer who is already struggling with finances. For one, the consumers who seek for payday loans are those who are turned back by banks because of their bad credit.
Therefore, the bad credit payday loans are helping the cash-strapped consumers and therefore, the borrowers are willing to pay the price. According to the CFPB report on payday lending, it was established that only about 4 percent of borrowers had an income of more than $60,000 in one year. A vast majority of the borrowers were surviving with annual incomes of less than $30,000.
If such a consumer who is financially tied is subjected to high interest rates and rollover of payday loans, the repercussions are daunting. Consumers are actually suffering in silence and something needs to be done. Apparently these consumers do not realize that there are other options they can take to prevent relying on these loans.
First, they can use bad credit credit cards, which could allow them take small loans against the cards to solve their emergency cash needs. There are also other options like peer to peer lending and bank cash advances. The problem with peer to peer lending and bank cash advances is that they may not be available to consumers with bad credit. There has been a debate on whether banks and credit unions can bridge the gap within the payday lending practice.
The payday lending market is just too risky for these depository institutions or entities and the regulations governing them do not allow them to impose very high interest rates. In the same CFPB report, it was established that the largest group of borrowers were making less than $ 20,000 in a year. This is a financially crippled borrower who is been subjected to risky loans in the name of bad credit payday loans, which attract very high interest rates, loan rollovers, and a vicious circle of borrowing.
- Close to one-third of borrowers are taking loans totaling between 11 and 19 in just one year.
- The loans are serving the underprivileged consumer.
- Many of the consumers are already struggling with debt or bad credit.
- The lenders are grooming consumers to become repeat customers.
- Only about 13 percent take one or two payday loans per year; the rest take more than that.
- About 14 percent of payday loan borrowers are taking more than 20 payday loans in 12 months.
- People are using payday loans to meet their regular expenses.
- Many of the consumers have been trapped in a vicious circle.
Payday loans are presented as short term loans were you get the cash now and pay in your next paycheck. But this is not the reality on the ground as what is happening is that many consumers are either rolling over the loans or repaying the current loan and taking a new one. According to a report released by the Consumer Financial Protection bureau- CFPB, it was found that as many as a-third of the borrowers were taking more than 11 loans and not more than 19 loans in one year.
This means that in a period of 12 months, consumers were borrowing between 11 and 19 payday loans. In the same report, it was also revealed that about 14 percent of borrowers were taking about 20 or more payday credit facilities within 12 months. This clearly demonstrates that these loans are not short term but they have been transformed to long-term credit facilities.
Since the lenders are on business mission, they encourage their clients to roll over or take new loans after repaying their present ones. This makes the whole structure of payday loans like wonga loans ideally unrealistic. Another surprising finding is that the average borrower is a consumer who is already struggling with finances. For one, the consumers who seek for payday loans are those who are turned back by banks because of their bad credit.
Therefore, the bad credit payday loans are helping the cash-strapped consumers and therefore, the borrowers are willing to pay the price. According to the CFPB report on payday lending, it was established that only about 4 percent of borrowers had an income of more than $60,000 in one year. A vast majority of the borrowers were surviving with annual incomes of less than $30,000.
If such a consumer who is financially tied is subjected to high interest rates and rollover of payday loans, the repercussions are daunting. Consumers are actually suffering in silence and something needs to be done. Apparently these consumers do not realize that there are other options they can take to prevent relying on these loans.
First, they can use bad credit credit cards, which could allow them take small loans against the cards to solve their emergency cash needs. There are also other options like peer to peer lending and bank cash advances. The problem with peer to peer lending and bank cash advances is that they may not be available to consumers with bad credit. There has been a debate on whether banks and credit unions can bridge the gap within the payday lending practice.
The payday lending market is just too risky for these depository institutions or entities and the regulations governing them do not allow them to impose very high interest rates. In the same CFPB report, it was established that the largest group of borrowers were making less than $ 20,000 in a year. This is a financially crippled borrower who is been subjected to risky loans in the name of bad credit payday loans, which attract very high interest rates, loan rollovers, and a vicious circle of borrowing.
Wonga Payday Loans Rescuing People in Bad Credit… But Are These Loans Solving the Problems
Wonga payday loans can smoothly cross you over a financial bottleneck you are experiencing especially if you are bad credit consumer and cannot get financial assistance from the depository institutions or banks. From reality, it seems that consumers are getting the helping hand they need when they are faced with a troubling emergency for money. These bad credit payday loans have become the crossing bridge for many borrowers who are turned away by banks whenever they desperately need money.
This is certainly one reason why borrowers keep on using these credit facilities despite the fact that they attract very high interest rates. And as wonga sets it straight, “We will always tell you what the full cost of repayment will be upfront” and as though this payday loans lender is not afraid, goes ahead and point out that “Our service has a Representative APR of 4214%” The big question is; how can this such high interest rates be justified?
Consumers need to prepare themselves and learn how to maneuver the hard times. Although wonga tries to defend itself and justify that this is an annual measure of APRs and that their payday loans are not intended for a 12 month period but only one month, the rates are surely high. In addition, wonga claims that this percentage they have given out assumes a theoretical compounding, which means that a borrower rolls over the balance and therefore the interest rate is charged on the accumulated balance and not the principal amount that was initially loaned.
A wonga loan is structured to be due between one day and a month; period. However, like other next paycheck credit facilities, they are no longer serving the intended purpose. A payday loan that is only meant for two weeks could be rolled over for up to one year. And the repercussions are huge. Even those who pay their loans within the two-week period, they head back to the same lender to take some more.
According to a research done by the Consumer Financial Protection bureau, it showed that about 13 percent of borrowers were taking out a maximum of two payday loans in a year. Similarly, about one-third of borrowers were taking an estimated 11-19 different payday credit facilities in just 12 months. This clearly demonstrates that payday loans are no more short term or one-time borrowing credit facilities.
There is the danger of being trapped in a vicious circle where you have to keep on borrowing in order to make ends meet. The problem is that the high interest rates eat up the little income you earn every month and you are left with a deficit and you cannot meet your regular bills and expenses like food stuffs, rent, gas, electricity, telephone, and other monthly bills.
Therefore, the chances of going back to obtain wonga payday loans is very high. It seems that payday lenders are grooming their customers for a repeat business not knowing how they are destroying their lives. There are many options that consumers need to take in order to steer clear of these cash advance loans because they are not sustainable.
First, you need to set up an emergency cash account and make it a strict saving behavior. In addition, today there are bad credit cards, which can allow you get some credit against the cards. Although missing credit card payment can attract high interest rates penalties that may hike your APR to as high as 35 percent, this is annualized APR and therefore, if you break it down to two weeks or one month period, you find that it is something negligible.
Wonga loans can only serve their purpose if you take only one or two of these loans in one year but this is practically not happening to most of the consumers. They are trapped in a vicious circle of borrowing again and again with many taking as many as 20 or more loans per year.
This is certainly one reason why borrowers keep on using these credit facilities despite the fact that they attract very high interest rates. And as wonga sets it straight, “We will always tell you what the full cost of repayment will be upfront” and as though this payday loans lender is not afraid, goes ahead and point out that “Our service has a Representative APR of 4214%” The big question is; how can this such high interest rates be justified?
Consumers need to prepare themselves and learn how to maneuver the hard times. Although wonga tries to defend itself and justify that this is an annual measure of APRs and that their payday loans are not intended for a 12 month period but only one month, the rates are surely high. In addition, wonga claims that this percentage they have given out assumes a theoretical compounding, which means that a borrower rolls over the balance and therefore the interest rate is charged on the accumulated balance and not the principal amount that was initially loaned.
A wonga loan is structured to be due between one day and a month; period. However, like other next paycheck credit facilities, they are no longer serving the intended purpose. A payday loan that is only meant for two weeks could be rolled over for up to one year. And the repercussions are huge. Even those who pay their loans within the two-week period, they head back to the same lender to take some more.
According to a research done by the Consumer Financial Protection bureau, it showed that about 13 percent of borrowers were taking out a maximum of two payday loans in a year. Similarly, about one-third of borrowers were taking an estimated 11-19 different payday credit facilities in just 12 months. This clearly demonstrates that payday loans are no more short term or one-time borrowing credit facilities.
There is the danger of being trapped in a vicious circle where you have to keep on borrowing in order to make ends meet. The problem is that the high interest rates eat up the little income you earn every month and you are left with a deficit and you cannot meet your regular bills and expenses like food stuffs, rent, gas, electricity, telephone, and other monthly bills.
Therefore, the chances of going back to obtain wonga payday loans is very high. It seems that payday lenders are grooming their customers for a repeat business not knowing how they are destroying their lives. There are many options that consumers need to take in order to steer clear of these cash advance loans because they are not sustainable.
First, you need to set up an emergency cash account and make it a strict saving behavior. In addition, today there are bad credit cards, which can allow you get some credit against the cards. Although missing credit card payment can attract high interest rates penalties that may hike your APR to as high as 35 percent, this is annualized APR and therefore, if you break it down to two weeks or one month period, you find that it is something negligible.
Wonga loans can only serve their purpose if you take only one or two of these loans in one year but this is practically not happening to most of the consumers. They are trapped in a vicious circle of borrowing again and again with many taking as many as 20 or more loans per year.
Payday Loans a Double-Edged Sword… they Help and Concurrently Hurt the Consumer
As the popularity of payday loans online lenders increases, the effects are being felt among the consumers as these non depository credit facilities are both helping and at the same time hurting the very consumer. Like a power saw, payday loans are a very excellent credit facilities for cutting through a financial emergency but again like a power saw, they will hurt serious if you do not use them correctly. These next paycheck credit facilities are aimed at serving specifically very short term pressing financial needs.
There is need to emphasize that they are only intended for very pressing and urgent need for cash and where a borrowers cannot obtain the money from other sources. While the payday loans online credit can be very attractive for the consumer in a financial crisis, it can be a trap to a vicious circle of borrowing. Although the loan is designed to be repaid within two weeks or one month, this is not the case because studies show that payday loan borrowers are taking numerous loans in a year.
From a study conducted by the Consumer Financial Protection bureau (CFPB) it has been established that more than one-third of people who borrow payday loans take about 11 to 19 different next paycheck loans in a period of 12 months. And that does this means?
These credit facilities are designed for one time or occasional borrowing in order to take you through a financial crisis you are facing. The loans typically range from $300 to $500 and can help solve a very urgent small ticket expense that you MUST resolve. In the CFPB report, it was also revealed that about 14 percent of borrowers were taking out 20 or more payday loans in the same period of 12 months.
These loans are very beneficial to the right consumer because they are obtained quickly and easily. The payday loan process has typically the shortest application process that you can find in the market today. If you need money to pay a bill today so that you do not damage your credit report, these loans are there just for that one time urgent need. Similarly if you are faced with an urgent need such loss of a loved family member and you need bus fare to go home and you are cash-strapped and do not have any cash in your account or pocket, then again these loans can rescue.
You may need these loans if you want to buy a life-saving drug or medication or pay your house rent. So, you can see the kind of emergencies these loans can handle. This means that they are not good for every other financial need because they carry a big risk. In a few hours or less than 24 hours, you can have money in your account and resolve your emergency.
In addition, the loans are easy to qualify because they are no credit check loans. All you need in order to obtain this loan is an active checking account, a monthly income from a job or business and the proof of your resident. These payday loans online credit facilities eliminate the cumbersome and frustrating bank application process, which entails filling out lengthy forms and worst of it all, checking your credit report.
Just the mere requesting for a credit report check by a bank lowers your score even if you have not been granted a loan. In addition, these loans are useful when you have been turned back by banks and other depository institutions.
However, the trap is that most of these loans will take a better part or large chunk of your next paycheck. This means that you will not have enough money for your regular expenses and therefore, the likelihood of going back to the same payday loan shark lender is high. This way, you may end up borrowing a 2nd, 3rd, 4th ... and even the 10th payday loan before the end of the year. This is how these loans are transformed from the intended short-lived debt solution to a long term borrowing.
There is need to emphasize that they are only intended for very pressing and urgent need for cash and where a borrowers cannot obtain the money from other sources. While the payday loans online credit can be very attractive for the consumer in a financial crisis, it can be a trap to a vicious circle of borrowing. Although the loan is designed to be repaid within two weeks or one month, this is not the case because studies show that payday loan borrowers are taking numerous loans in a year.
From a study conducted by the Consumer Financial Protection bureau (CFPB) it has been established that more than one-third of people who borrow payday loans take about 11 to 19 different next paycheck loans in a period of 12 months. And that does this means?
These credit facilities are designed for one time or occasional borrowing in order to take you through a financial crisis you are facing. The loans typically range from $300 to $500 and can help solve a very urgent small ticket expense that you MUST resolve. In the CFPB report, it was also revealed that about 14 percent of borrowers were taking out 20 or more payday loans in the same period of 12 months.
These loans are very beneficial to the right consumer because they are obtained quickly and easily. The payday loan process has typically the shortest application process that you can find in the market today. If you need money to pay a bill today so that you do not damage your credit report, these loans are there just for that one time urgent need. Similarly if you are faced with an urgent need such loss of a loved family member and you need bus fare to go home and you are cash-strapped and do not have any cash in your account or pocket, then again these loans can rescue.
You may need these loans if you want to buy a life-saving drug or medication or pay your house rent. So, you can see the kind of emergencies these loans can handle. This means that they are not good for every other financial need because they carry a big risk. In a few hours or less than 24 hours, you can have money in your account and resolve your emergency.
In addition, the loans are easy to qualify because they are no credit check loans. All you need in order to obtain this loan is an active checking account, a monthly income from a job or business and the proof of your resident. These payday loans online credit facilities eliminate the cumbersome and frustrating bank application process, which entails filling out lengthy forms and worst of it all, checking your credit report.
Just the mere requesting for a credit report check by a bank lowers your score even if you have not been granted a loan. In addition, these loans are useful when you have been turned back by banks and other depository institutions.
However, the trap is that most of these loans will take a better part or large chunk of your next paycheck. This means that you will not have enough money for your regular expenses and therefore, the likelihood of going back to the same payday loan shark lender is high. This way, you may end up borrowing a 2nd, 3rd, 4th ... and even the 10th payday loan before the end of the year. This is how these loans are transformed from the intended short-lived debt solution to a long term borrowing.
More Seniors Opting for the Highly Preying Payday Loans...A Study Reveals
The subject of payday loans has received a lot of attentions and speculations but one notable thing is that aging citizens are turning to using these loan facilities. According to report released by Center for Responsible Lending, it shows that about 25% of consumers opting for cash advance credit offered by banks are using their social security funds. You may be wondering if banks are offering these high interest loans but the truth is that they are indeed offering such loans but under different names.
The banks refer to these loans as fast cash, cash advance, and so forth. However, the latest statistics on short term loans with high interest rates seem to be impacting the seniors at an age where these older people should be refraining from debt. The fact that a significant number of bank payday loan borrowers fall under the seniors who are using their social security resource may not be a welcomed thing.
Banks are said to be offering short term loans which attract interests as high as 250 to 300 percent in APRs. Although most of the payday loans require that you have a source of income such as employment, for the seniors, they are using their social security benefits to qualify for these loans. In that study released by CRL, it also showed that in 2011, the average bank payday loan customer took close to 19 loans in a year.
As the payday lending industry continues to defend itself, perhaps for the senior consumer, this may not be the right option. At an old age, there are many uncertainties that may strike and need emergency cash but opting for high interest rates may not be a good solution. In old age people tend to suffer from health conditions because of the reduced immune systems and poor circulation of blood.
You may have frequent visits to the doctor as well as numerous treatments that take substantial amount of money. Nevertheless, this does not mean that the best way to get cash to meet these financial needs is to go for these loans. For one, these loans are easy to obtain and you will not have headaches when applying for them. There may be no credit check when getting approval for the loans. This perhaps is one reason, which entices the old to opt for these loans especially those with bad credit score.
But there are better options such are credit unions or even peer to peer lending. Banks may also provide personal loans at a very competitive rate. The question is; whether you as a senior, you will get approval for the low interest loans when you are in bad credit. The fact that over a quarter of payday loan borrowers are social credit recipients, it means that seniors may be carrying more debt, which locks them out from acquiring low interest loans issued by banks or other financial institutions. This is perhaps another reason why they opt for the payday cash advances.
The major problem is that they are borrowing at a time when they should keenly be watching their debt burden. This is a time when they can actually ill afford such financial burdens and they need to refrain from taking these loans and search for other better financial solutions. And, as an associate state director for advocacy for AARP noted, seniors are getting their social security benefits in the bank electronically and as soon as it is deposited there, the payday lenders are scraping it up.
This is certainly “swindling” the social security benefits of the seniors, a scenario that may lead to huge debt burden. Although banks seem to reject the label payday loans, they offer these credit facilities under different names like Fast Loan for Bank of Oklahoma, Easy advance for Guaranty Bank, and Direct deposit advance for Wells Fargo Bank, among other similar names.
The banks refer to these loans as fast cash, cash advance, and so forth. However, the latest statistics on short term loans with high interest rates seem to be impacting the seniors at an age where these older people should be refraining from debt. The fact that a significant number of bank payday loan borrowers fall under the seniors who are using their social security resource may not be a welcomed thing.
Banks are said to be offering short term loans which attract interests as high as 250 to 300 percent in APRs. Although most of the payday loans require that you have a source of income such as employment, for the seniors, they are using their social security benefits to qualify for these loans. In that study released by CRL, it also showed that in 2011, the average bank payday loan customer took close to 19 loans in a year.
As the payday lending industry continues to defend itself, perhaps for the senior consumer, this may not be the right option. At an old age, there are many uncertainties that may strike and need emergency cash but opting for high interest rates may not be a good solution. In old age people tend to suffer from health conditions because of the reduced immune systems and poor circulation of blood.
You may have frequent visits to the doctor as well as numerous treatments that take substantial amount of money. Nevertheless, this does not mean that the best way to get cash to meet these financial needs is to go for these loans. For one, these loans are easy to obtain and you will not have headaches when applying for them. There may be no credit check when getting approval for the loans. This perhaps is one reason, which entices the old to opt for these loans especially those with bad credit score.
But there are better options such are credit unions or even peer to peer lending. Banks may also provide personal loans at a very competitive rate. The question is; whether you as a senior, you will get approval for the low interest loans when you are in bad credit. The fact that over a quarter of payday loan borrowers are social credit recipients, it means that seniors may be carrying more debt, which locks them out from acquiring low interest loans issued by banks or other financial institutions. This is perhaps another reason why they opt for the payday cash advances.
The major problem is that they are borrowing at a time when they should keenly be watching their debt burden. This is a time when they can actually ill afford such financial burdens and they need to refrain from taking these loans and search for other better financial solutions. And, as an associate state director for advocacy for AARP noted, seniors are getting their social security benefits in the bank electronically and as soon as it is deposited there, the payday lenders are scraping it up.
This is certainly “swindling” the social security benefits of the seniors, a scenario that may lead to huge debt burden. Although banks seem to reject the label payday loans, they offer these credit facilities under different names like Fast Loan for Bank of Oklahoma, Easy advance for Guaranty Bank, and Direct deposit advance for Wells Fargo Bank, among other similar names.
Friday, November 15, 2013
Payday Loans: Are the Easy Fast Cash Payday Loans a Better Option?
Until you face a situation where you do not have cash in your account and no one to lend you money, you may not know the importance of payday loans. Financial stability is an aspect that many people strive to achieve but it doesn’t always happen to many people. Even with a substantial income stream and good personal financial planning strategies, at times you run short of cash and you are placed in an urgent need for money to settle a financial emergency need. This is the high time you realize the benefits of payday loans.
These types of loans are specially designed for the most pressing financial needs and its imperative to point out they may not be the right loan facilities for everyone.
There are immediate benefits that are attached to these types of short term loans and these include;
• Easy application process.
• Disbursed within a short time.
• You do not need to provide your credit worthiness.
• Can apply online.
When you are faced with a cash emergency such as medical bills, you need money in the least time possible so that you can resolve the financial need. With the conventional financial institutions, the process of loan application may not be easy and it may take you a while. This is where payday loans come in handy.
These cash advance loan facilities can help you when you need cash fast and have no alternative to get the money. The loans can be applied and released pretty within hours or a day. The process is simple and does not require you present a lot of information about your credit worthiness.
With the challenges people are facing from bad credit report, the payday loans have provided a relief for those people seeking for financial assistance when they need them most. Banks and other financial institutions are shying away from lending people with bad credit and this means that people cannot access loan facilities from these institutions.
Even in cases where people have stabilized in their finances, bad credit reports continue to affect them for years thus being locked out from accessing loan facilities from the traditional banking institutions. This is the reason why payday loans have been praised of offering tailored services that are most beneficial to people who are still suffering from effects of bad credit.
In addition, these payday loans can easily be applied online and may not require you to fax information or wait in queue in a payday loans store. It is also important that people anticipating to borrow these fast cash, they understand that there are pros and cons of the loans.
Although these loans are very convenient to obtain, they can also be quite technical in their payment. They mature pretty fast and require that you have a promising employment in order to be able to pay them. One of the limitations is that these loans have a relatively very high annual percentage rate APR. This means that they may not be appropriate for long term loan facilities.
If you have to take these loans, you need to ensure that you observe strict repayment plan to avoid any delinquencies. If these loans are borrowed appropriately, these can indeed help repair your credit report. When you are borrowing payday loans, you need to understand the benefits and limitations so that you do not mess up on the repayment, which can worsen your credit report.
These types of loans are specially designed for the most pressing financial needs and its imperative to point out they may not be the right loan facilities for everyone.
There are immediate benefits that are attached to these types of short term loans and these include;
• Easy application process.
• Disbursed within a short time.
• You do not need to provide your credit worthiness.
• Can apply online.
When you are faced with a cash emergency such as medical bills, you need money in the least time possible so that you can resolve the financial need. With the conventional financial institutions, the process of loan application may not be easy and it may take you a while. This is where payday loans come in handy.
These cash advance loan facilities can help you when you need cash fast and have no alternative to get the money. The loans can be applied and released pretty within hours or a day. The process is simple and does not require you present a lot of information about your credit worthiness.
With the challenges people are facing from bad credit report, the payday loans have provided a relief for those people seeking for financial assistance when they need them most. Banks and other financial institutions are shying away from lending people with bad credit and this means that people cannot access loan facilities from these institutions.
Even in cases where people have stabilized in their finances, bad credit reports continue to affect them for years thus being locked out from accessing loan facilities from the traditional banking institutions. This is the reason why payday loans have been praised of offering tailored services that are most beneficial to people who are still suffering from effects of bad credit.
In addition, these payday loans can easily be applied online and may not require you to fax information or wait in queue in a payday loans store. It is also important that people anticipating to borrow these fast cash, they understand that there are pros and cons of the loans.
Although these loans are very convenient to obtain, they can also be quite technical in their payment. They mature pretty fast and require that you have a promising employment in order to be able to pay them. One of the limitations is that these loans have a relatively very high annual percentage rate APR. This means that they may not be appropriate for long term loan facilities.
If you have to take these loans, you need to ensure that you observe strict repayment plan to avoid any delinquencies. If these loans are borrowed appropriately, these can indeed help repair your credit report. When you are borrowing payday loans, you need to understand the benefits and limitations so that you do not mess up on the repayment, which can worsen your credit report.
Monday, November 11, 2013
Wonga Releases 12 Portraits Film...What Does A Movie Has To Do With A Payday Lender?
Wonga released a 28- minute film, which apparently did not feature its name, nor the puppets that are associated with its site and ads. Wonga seems to be sympathizing with its exploits that are in pain accusing the payday lender of reaping money from consumers who are regarded as financially unstable. The release of the movie comes at a time when Wonga is under pressure from the MPs accused it of imposing extra-hefty interest rates that are as high as 5,853%.
Whereas the movie may give the impression that consumers are happy with the payday lender, this might not be the case. If those who feel they have been exploited by this lender could be featured in a similar movie, it would be tears of agony and bitterness. But, who is to blame for the pain caused by payday lender to consumers?
Gary Tarn, the BAFTA-nominated filmmaker was granted a free rein to produce a film for Wonga without an editorial control by the lender. This would create the impression that the lender was not biased in the content of the film. The series featuring 12 portraits of Wonga customers talking of their passions has been cited as an expression for many who feel that these loans have helped them greatly but their voices have never been heard.
All we hear is the tainted image and accusations of preying consumers of their hard-earned money by payday lenders but few seem to be excited about these lenders. The anguish and pain consumer are experiencing overwhelms the joy expressed in the 12 Portraits film footage. Whether it is a consolation gimmick or voice for the majority who have benefited and are happy about this lender, the feelings about payday lending are far from happiness.
Wonga is the most profitable payday lender in Britain, but its profitability may be resting on bitter feels. After all, much of the revenue generated by these cash advance service providers is derived from the fees and charges levied on consumers who rollover balances or take multiple loans. Payday loans are not intended for long-term financial solutions in the first place.
Any payday company capitalizing on penalizing its consumers for failure to repay their first loan as agreed on the term has a hidden agenda. Payday loans should only be borrowed once and should be repaid after the given period of lending. However, lenders lure consumers to become repeat customers or rollover their balances, and this is where the problem starts.
These lenders should discourage rolling over of balances or obtaining multiple loans within a given period because after all, the blame for preying consumers erodes their reputation and image. It might have been easy for Wonga to find 12 people who could speak, something passionately about the company, but what about the thousands of consumers struggling with heftily priced loans? Who would help them air out their voices?
The subject of payday lending is very sensitive, and although the lenders say, the loans are for emergencies, consumers need to be informed on what is important and what is urgent. Every other financial need might be important but not an emergency. Many consumers who borrow Wonga payday loans have misplaced priorities and misunderstanding of what the implication is. A payday loan should never be rolled over and multiple borrowing should never be entertained. These loans are too costly to bear whenever there are rollovers and multiple borrowing.
Nevertheless, it cannot be assumed that these loans do not benefit consumers. A few people can attest to the fact that payday loans have helped them in a way they could never have been assisted . This should be praised and acknowledged but majority of borrowers are never happy with structure of the lending system and they feel reaped off their money. The 12 Portraits may just be another corporate video that is deemed to conceive the truth from the eyes.
Unfortunately, even if people can see the joy in the hearts of those who passionately praise the work of Wonga, the film might not erase the ill feelings of thousands of consumers who in one way or another feel they have been exploited. Consumers should borrow wisely and understand that payday loans pose a real danger to their finances. Installment loans are the new form of payday loans, which seem to be growing fast but although they attract less interest rates, they are also highly priced. Wonga loans can only help you when you are in critical need of cash but not just another emergence.
Gary Tarn, the BAFTA-nominated filmmaker was granted a free rein to produce a film for Wonga without an editorial control by the lender. This would create the impression that the lender was not biased in the content of the film. The series featuring 12 portraits of Wonga customers talking of their passions has been cited as an expression for many who feel that these loans have helped them greatly but their voices have never been heard.
All we hear is the tainted image and accusations of preying consumers of their hard-earned money by payday lenders but few seem to be excited about these lenders. The anguish and pain consumer are experiencing overwhelms the joy expressed in the 12 Portraits film footage. Whether it is a consolation gimmick or voice for the majority who have benefited and are happy about this lender, the feelings about payday lending are far from happiness.
Any payday company capitalizing on penalizing its consumers for failure to repay their first loan as agreed on the term has a hidden agenda. Payday loans should only be borrowed once and should be repaid after the given period of lending. However, lenders lure consumers to become repeat customers or rollover their balances, and this is where the problem starts.
These lenders should discourage rolling over of balances or obtaining multiple loans within a given period because after all, the blame for preying consumers erodes their reputation and image. It might have been easy for Wonga to find 12 people who could speak, something passionately about the company, but what about the thousands of consumers struggling with heftily priced loans? Who would help them air out their voices?
Nevertheless, it cannot be assumed that these loans do not benefit consumers. A few people can attest to the fact that payday loans have helped them in a way they could never have been assisted . This should be praised and acknowledged but majority of borrowers are never happy with structure of the lending system and they feel reaped off their money. The 12 Portraits may just be another corporate video that is deemed to conceive the truth from the eyes.
Unfortunately, even if people can see the joy in the hearts of those who passionately praise the work of Wonga, the film might not erase the ill feelings of thousands of consumers who in one way or another feel they have been exploited. Consumers should borrow wisely and understand that payday loans pose a real danger to their finances. Installment loans are the new form of payday loans, which seem to be growing fast but although they attract less interest rates, they are also highly priced. Wonga loans can only help you when you are in critical need of cash but not just another emergence.
Friday, September 13, 2013
Consumers Up For Payday Loans In Spite of Heavy Payback Interest Rates
Consumers seem to defy their conscience and are willing to pay for the high interest rates being charged by payday loans online lenders. Although this does not come as a surprise considering that traditional banking institutions are turning down many consumers, it means that these consumers are really determined to carry the burden. Interestingly, the aged people who should now be observing strict financial spending are now resulting to using payday loans.
In whichever angle or perspective you think about the fast cash advance, the reality is that they are very costly. With payday loans interest rates reaching as high as 700 APRs or annual percentage rates, then there is a trap here. First, payday loans are only meant for occasional or one time use. In a year, you should not borrow more than one or two fast cash loans simply because the more you borrow or roll over the balance, the more you are paying for the loan.
These loans can save you when you are in trouble and cannot obtain funds from elsewhere. They can make you cross the bridge in that difficult moment but they should never be used every now and then. Payday loans can help you pay for credit balance in time before you face penalties and taint your credit score. They can be used for emergencies such as hospital bills, telephone, and electricity bills.
Remember the way in which you pay your bills says something about your creditworthiness. The solution to good money management is not using payday loans but rather seeking for ways to manage your cash. One reason why millions of consumers are opting for payday cash advance is that they are the easiest to obtain. When you are unexpectedly caught up in an emergency financial situation, you can resolve it within a few hours by seeking for a cash advance online lender.
These lenders are many but you have to be careful when seeking for the right lender. You may be risking your credit card information and therefore you should check through the payday loans reviews to discover the most reputable and trusted payday lenders. The toptenreviews website provides an honest review of the leading and most trusted fast cash advance lenders. You can check them and compare their interest rates.
Another good thing with these fast cash advance online lenders is that they do not put more emphasis on your credit score. Bad credit loans are not easy to obtain and the process may be tedious when you are dealing with traditional banks. The ability to walk on a payday store or log on to the web and apply for a fast cash loan easily and fast is what drives consumers to preferring these credit services.
Within one hour, you can have cash in your checking account and the approval process is very lenient. This means that you can easily meet a troubling and pressing financial need and be able to move ahead with life. The only problem is that the lending structure of payday loans online facilities is very loose. The lenders do not emphasize on the ability of the lender to repay the loan and they are more focused on the collection.
To be able to repay a loan, the lender has to assess your income, your regular expenses, and unplanned expenses and from that perspective, award you a payday online loan that goes hand in hand with your income and expenses. This will prevent you from getting into trouble when repaying the amount back. But it seems that payday loans online lenders want you to become a repeat customer just by making sure that you don’t repay the amount in the next paycheck. You either roll over the balance or take another loan. This is something that is creating a cycle of debts among the payday loans consumers.
In whichever angle or perspective you think about the fast cash advance, the reality is that they are very costly. With payday loans interest rates reaching as high as 700 APRs or annual percentage rates, then there is a trap here. First, payday loans are only meant for occasional or one time use. In a year, you should not borrow more than one or two fast cash loans simply because the more you borrow or roll over the balance, the more you are paying for the loan.
These loans can save you when you are in trouble and cannot obtain funds from elsewhere. They can make you cross the bridge in that difficult moment but they should never be used every now and then. Payday loans can help you pay for credit balance in time before you face penalties and taint your credit score. They can be used for emergencies such as hospital bills, telephone, and electricity bills.
Remember the way in which you pay your bills says something about your creditworthiness. The solution to good money management is not using payday loans but rather seeking for ways to manage your cash. One reason why millions of consumers are opting for payday cash advance is that they are the easiest to obtain. When you are unexpectedly caught up in an emergency financial situation, you can resolve it within a few hours by seeking for a cash advance online lender.
These lenders are many but you have to be careful when seeking for the right lender. You may be risking your credit card information and therefore you should check through the payday loans reviews to discover the most reputable and trusted payday lenders. The toptenreviews website provides an honest review of the leading and most trusted fast cash advance lenders. You can check them and compare their interest rates.
Another good thing with these fast cash advance online lenders is that they do not put more emphasis on your credit score. Bad credit loans are not easy to obtain and the process may be tedious when you are dealing with traditional banks. The ability to walk on a payday store or log on to the web and apply for a fast cash loan easily and fast is what drives consumers to preferring these credit services.
Within one hour, you can have cash in your checking account and the approval process is very lenient. This means that you can easily meet a troubling and pressing financial need and be able to move ahead with life. The only problem is that the lending structure of payday loans online facilities is very loose. The lenders do not emphasize on the ability of the lender to repay the loan and they are more focused on the collection.
To be able to repay a loan, the lender has to assess your income, your regular expenses, and unplanned expenses and from that perspective, award you a payday online loan that goes hand in hand with your income and expenses. This will prevent you from getting into trouble when repaying the amount back. But it seems that payday loans online lenders want you to become a repeat customer just by making sure that you don’t repay the amount in the next paycheck. You either roll over the balance or take another loan. This is something that is creating a cycle of debts among the payday loans consumers.
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