Former Google Exec Sees Payday in ZestCash
By DailyFinance ( DailyFinance ) -- A former Google executive has moved from the world of Internet searches to the world of high-interest, short-term lending. He says his operation, ZestCash.com, offers an innovative way to help the poorest borrowers avoid financial emergencies. But is this just a slick veneer putting a shine on the classic payday lending business? chief information officer Douglas Merrill founded online-only lender ZestCash, which uses some fairly high-level Google-esque algorithms to assess its borrowers' creditworthiness. And the site certainly looks better than your typical payday lender. Those sketchy outfits usually operate out of rundown storefronts in lower-income neighborhoods, offering quick cash infusions at jacked-up interest rates to people with nowhere else to turn. But friendly looking ZestCash does essentially the same thing: Its loans ring up at triple-digit interest rates. For example, a three-month $800 loan will cost nearly $550 in interest and fees at the 412% interest rate that ZestCash charges. The site is one of a number of new businesses popping up to cater to a growing segment of Americans: The poor and credit-challenged who don't -- or can't -- use a bank. As high unemployment and falling wages continue to push more Americans into poverty, financial innovators like Merrill are on the lookout for new ways to milk profits out of this demographic. Firmly on the 'loan shark' end of the spectrum Merrill says that his new model for assessing a borrower's creditworthiness and setting installment payments means he can offer lower rates than standard payday operators. But when one is talking in either case about interest rates of more than 400%, the degree of difference is arguably meaningless.400 pay day loans - News
Merrill says that his new model for assessing a borrower's creditworthiness and setting installment payments means he can offer lower rates than standard payday operators. But when one is talking in either case about interest rates of more than 400%,
And if you can't pay $101 this week, what are the chances you'll be able to afford $237 next week? This is hardly better than online quick-cash lender, Checkngo.com, which offers a 14-day payday loan for $800 in the state of Utah, with a $200 fee,
Proponents of a 36 percent ceiling say payday loan interest rates can reach as high as 400 percent, which creates a cycle of indebtedness for such customers. City attorney Todd Greenburg reversed his opinion that the city had the authority to limit
That's the equivalent of 400 extra cases for every day of the year. What's even more worrying is that cases relating to “debt remedies” are up by 14%. These are clients who have taken out loans to pay existing debts. In extreme cases their entire
Most payday borrowers have nine repeat loans per year and pay 400 percent interest. Currently, not only are the Big Banks failing to cut off funding for the predators, they are actually “adding payday loans to their arsenal of predatory loan products.
100 Day Pay Day Loans | youwebdir.com
Most of us are familiar with payday loans by now. They have made a big impact in the United Kingdom in the past five years. There is a basic format for the usual payday loan and it is a loan that is granted from one payday to another. It is usually a short term, high interest loan. The longest these loans are normally given for is 30 days. Many if not most pay day loans are for 7-14 days.
However there have been many difficulties with the usual pay day loan process because often the borrower is unable to pay the loan back on the next pay day as expected. Then the borrower can extend or “roll over” the loan. This means the borrower can pay only the finance charge on the next pay day and roll over the principle to the next pay day. When this happens the borrower gets caught in a cycle of ever increasing debt to the pay day lender.
In order to address this issue, some lenders such as simple payday now offer a longer term “pay day “loan. If it is a longer term then what makes it a pay day loan? It is a “pay day” loan or a cash advance because the requirements for the loan and process for getting the loan are the same as for the shorter term pay day loan. The similarities between the shorter term loan and the 100 day loan are:
You must be 18 and a citizen of the United Kingdom. You must have a checking, savings or debit card account. You must have a source of income. There is a short online application. There is no credit check. There is no application fee. There are no documents to fax. Funds are in your bank account within 24 hours. Some lenders will grant the loan and provide the funds within an hour of applying.The difference is if you borrow 400 pounds at a finance fee of 25 pounds per 100 borrowed, you would owe 100 pounds in finance fees on both loans. The short term loan means you will owe 100 pounds in finance fees and 400 pound principle on the first pay day after you got the loan. It does not matter if that pay day is in 3 weeks or two days. What you owe is the same.