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Payday Loan Debt: Comparing It To Other Debt

When we talk about debt, we usually think about the total of what we owe regardless of how it was accumulated or who we owe it to. Payday loan debt included. While some of us may define being in debt by our home mortgage or student loans, for others debt may be determined by our past financial mistakes. No matter how much we owe, how long it will take us to pay it back, or how we got there… it’s all considered debt. It’s only when we look at each type of debt individually that we can understand all of the different types of debt out there. It is then that we can respect the fact that whether we owe $1 or $1 million, to family or payday loan lender, that we are expected to payback what we borrow because it’s all considered debt.*Mortgage Debt~ This type of debt is defined by a first mortgage on a home, a home equity line of credit, or any other type of loan that is secured by owing a piece of property or real estate. A lien will be placed on the property until the loan is paid off. This type of debt may come with an adjustable-rate mortgage (ARM) which will increase over time over a fixed-rate which stays the same for the life of the loan. With a home equity line of credit, which can also be considered a “second mortgage”, the lender is paid back only after the first mortgage is paid in full. The average repayment term on a home mortgage or line of credit is 15 or 30 years but there are 10 years ARM’s available as well.* Auto Loan~ Incurring debt with an auto loan means borrowing a set amount for the purchase and then paying it back over a fixed amount of time with a monthly payment (usually 24-60 months). The interest rate will be fixed for the life of the loan unless the borrower decides to refinance for a lower monthly payment.*Payday Loan~ Payday loans are short-term temporary loans meant to help people out with emergency financial issues or unexpected costs. They are unsecured with no collateral necessary in order to be approved. Most lenders don’t ask for credit history. Borrowers are expected to pay back their loan with there next paycheck but often times payday loan lenders will extend a person’s repayment period. Interest rates are higher than most loans and are fixed. The types of loans are best for people who are able to pay back their loans quickly.*Student Loan~ Most often granted by the federal government, this type of debt is used for higher education. Interest rates are usually much lower than other forms of debt and repayment periods are usually 10 years, giving the borrower plenty of time to graduate, find gainful employment, and payback what they borrowed. These loans can carry extremely high balances depending on where the borrower went to school, how many years it took them to finish their education, and how many degrees they sought.*Credit Card(s)~ This type of debt comes from the purchasing of good and services without having to pay up front. Creditors approve card holders for a specified amount in which they can use on a revolving basis provided they make their monthly payment on time and in at least the minimum amount required. Interest rates are based on the borrower’s credit score and can be some of the highest rates paid out of all forms of debt.While borrowing on credit can be a good, and sometimes necessary financial means, it is important to understand how each type of debt works and what is best for your individual financial scenario.

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Implications in Different Employment Contracts

In UK law there are many rights and obligations associated with employees. To know about these rights, first of all we have to look up the definition of employee.”An individual who has entered into, or works under contract of employment” (ERA 1996)The contract of employment may be made written or orally. It is important to differentiate between employment and self employment. Each type of contract has different implications regarding taxation, healthcare and protection laws. Two basic tests have to be performed to check whether it is employment or self employment.These are mentioned below.Control Test:The court will consider whether the employer has control over the way in which the employee performs the duties. If employer has control then it will be the contract of service (employment).IntegrationIf employee is so skilled that he cannot be controlled in the performance of his duties then it will fall into the contract for service (self-employment). The distinction between employed and self employed is very essential because certain rights and obligations arise in each case.So implications are mentioned below:TaxationThere are number of deductions can be made by an employer for income tax under PAYE from salary of employee. But self employed person is directly responsible to the HM revenue and customs for tax due.Protection:There is legislation for the protection and rights of employee including minimum period of notice and remedies for unfair dismissal. As there is no employment contract in contract for service, so self employed person is not entitled for these rights.VATEmployees do not have to get register for VAT but self employed has to be registered for VAT if he meets the criteria for compulsory registration for VAT.BankruptcyEmployees are the preferential creditors of the company in the case of liquidation or bankruptcy. Contractors or self employed persons are treated as non preferential creditors if employer is liquidated.

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