How to Mine Dogecoin 2021

After the price gains that Dogecoin (DOGE) has seen over the past year, the cryptocurrency has drawn interest from traders, investors, and those who want to mine it. Mining DOGE requires less computing power than some other crypto currencies, like Bitcoin.

Here’s what you need to know about mining Dogecoin:

Basics of Crypto Mining

Here’s a quick, simplified rundown on crypto basics and how the mining process works.

•   Blockchain networks are the highways on which cryptocurrencies travel.

•   A blockchain is a type of distributed ledger technology (DLT).

•   The computers, called “nodes,” maintain the blockchain network.

•   Some nodes, called “miners,” can add new blocks of transactions to the network.

•   Miners solve complex mathematical problems to process transactions and achieve consensus on the network, ensuring everyone agrees on the validity of transactions.

Mining crypto is like mining for gold in that the process requires time, equipment, and energy. But unlike gold mining, computers do all the work in crypto mining.

A Brief History of Dogecoin

Developers Billy Marcus and Jackson Palmer launched Dogecoin as a fun way for people to learn about cryptocurrency. The meme coin traded at a price of a tiny fraction of a penny, so people could send it to each other for fun while learning how to use crypto wallets.

Dogecoin began in 2014 as a joke. Based on a famous meme of a Shiba Inu dog with grammatically incorrect phrases surrounding it like “much style,” “very fashion,” or simply “wow,” DOGE had almost no real value for several years.

In 2018, the altcoin reached more than $0.01 as cryptocurrency began to go mainstream for the first time. The price of DOGE then crashed and stagnated for several years. Then, in 2021, Dogecoin reached record highs around $0.70 before crashing down to about $0.24 at the time of writing.

DOGE is currently the #10 largest cryptocurrency by market cap. You don’t have to mine Dogecoin in order to acquire it. You could also purchase it on an exchange, or use a Dogecoin faucet.

What is Dogecoin Mining?

Mining Dogecoin involves running powerful computers known as nodes that process transactions for the network. In exchange for this work, miners receive block rewards of newly minted DOGE.

A new block of transactions is mined approximately every minute on the Dogecoin network. The block reward is 10,000 DOGE, or about $2,000 currently. Unlike Bitcoin, which releases fewer coins over time, there is no limit on how many Dogecoin miners can ultimately find.

How to Start Mining Dogecoin

There are several things you’ll want to consider before you begin mining Dogecoin.

Requirements Before You Get Started

The requirements before getting started include:

•   Basic personal computer knowledge

•   Familiarity with cryptocurrency wallets

•   A reliable source of electricity

•   A desktop or laptop computer with Windows, Mac OSx, or Linux

•   A DOGE wallet

Running mining software can take a lot of CPU power, so the computer being used for the job probably won’t be much good for anything else while the miners are up and running.

Both the miners and the computer running them will need to be plugged in almost 24/7 for maximum profits. Miners can also generate substantial amounts of heat. This is something worth keeping in mind, as you may need additional fans or other cooling equipment.

Solo vs Pool: Dogecoin Mining

Miners will need to decide whether they want to mine solo or with a pool. The benefit of mining solo is that 100% of the block reward will go directly to you. But it could be weeks or months before you find a block because there is so much competition.

Most miners choose to join a mining pool. Pool miners receive rewards in proportion to the amount of hashing power they contribute. However, they also have to pay a small fee in exchange for using the pool.

Those who are new to mining might find using a pool to be the best option.

Dogecoin Mining Hardware

While it could be possible to mine DOGE with your computer’s CPU, it could damage the device due to overheating and might not be very profitable.

Instead, you might consider either a GPU (graphic processing unit) or a Scrypt ASICs (application-specific integrated circuits), which is a device specifically created to mine cryptocurrency.

The prices of these types of hardware vary, but a low-end GPU might cost around $400. Scrypt ASICs, which are used to mine Scrypt-based coins like Litecoin and Dogecoin, can cost anywhere from $700 to $17,000 or more.

A single desktop or laptop computer can run numerous mining machines.

Dogecoin Mining Software

Once you’ve chosen a mining pool, and obtained the necessary hardware, the final step in mining Dogecoin is setting up the appropriate software.

Make sure the mining software is compatible with the mining hardware you’ve chosen.

Once you’ve connected your hardware to the computer that will run the software, you connect the pool with your crypto wallet, where it will deposit your Dogecoins. The pool owners and software developers have instructions for that on their websites.

Some mining software options include programs like CudaMiner, CGMiner, or EasyMiner. CudaMiner is only for GPUs while CGMiner and EasyMiner work with either GPUs or ASICs.

Dogecoin Cloud Mining

If you opt to mine through the cloud, you won’t need physical hardware or software. This mining option simply involves buying a contract for a certain amount of hashing power over a certain amount of time. In essence, you’re renting computing power from someone else.

Be careful though, there have been many cloud mining scams over the years.

Recommended: What is Bitcoin Cloud Mining?

Is Dogecoin Mining Worth It?

Mining Dogecoin may or may not be worth it depending on several factors.

The most important variable in any mining profitability equation is the cost of electricity. Having access to low-cost electricity can make mining much more profitable. Renewable energy sources like solar and hydroelectric are popular among miners for this reason.

If figuring out how to mine Dogecoin, acquiring the needed hardware, and accessing affordable electricity don’t seem like difficult hurdles to conquer, then Dogecoin mining could be worth it.

The other big factor is, of course, the price of DOGE in relation to a miner’s local fiat currency or in relation to Bitcoin (when Bitcoin goes up or down, many altcoins tend to follow).

Dogecoin mining could also be an interesting way to learn about cryptocurrency mining in general. Using smaller miners that don’t take much electricity, you might choose to mine some DOGE for the learning experience. This is commonly referred to as “hobby mining.” Hobby mining generally isn’t profitable unless the coin being mined happens to see a huge price spike at just the right time.

Recommended: Is Crypto Mining Still Profitable in 2021?

How to Sell Your Mined Dogecoin

Unless you’re planning to HODL your Dogecoin, you’ll likely want to sell you DOGE after you’ve mined it. Selling DOGE requires using a crypto exchange. You can choose from a number of centralized or decentralized exchanges.

After getting set up on an exchange, find the public key address (also known as a deposit address) for your DOGE wallet. This is the address you will need to send the mined Dogecoins to in order to sell them.

Once the coins have arrived on the exchange, you can trade them for the currency of your choice. That could be U.S. dollars, a stablecoin like USDC, or Bitcoin, for example.

The Takeaway

You don’t have to be a tech genius to mine Dogecoin. But having some previous experience with computers and crypto will be an advantage. The process also requires a substantial investment required in terms of time and money to get started.

There’s an easier way to acquire Dogecoin. Simply buying cryptocurrency that has already been mined can be faster and cheaper than mining. An easy way to do that is via the SoFi Invest® crypto trading platform, where users can trade Dogecoin and several other popular cryptocurrencies.

Photo credit: iStock/Aleksandr Zotov


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
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Source: sofi.com

Sell Your Gold Safely for a Fair Price

You’ve got some gold you want to sell. Some of your late aunt’s jewelry, maybe. Or your grandpa’s coin collection. Some old earrings that don’t have partners anymore. Or a really hideous bracelet you never wear. You could use the cash much more than the knotted lump of old chains in your jewelry box. But selling gold can be intimidating.

We’re sure you’ve seen the signs promising quick cash for gold. What about an online buyer? Maybe you got a mail solicitation. Authorities warn about ripoffs, and knowing how to get a fair price in a volatile market is a challenge. But if you have some gold jewelry or coins or other gold you would rather cash in, there are ways to sell it safely and for the best price.

The key to this transaction is your comfort level and trust that the person you’re selling to is reputable. So one of the first rules is to do your research and shop around.

Pandemic Affects Consumer Gold Sales

More and more consumers are looking to sell gold items, according to Gary Smith, past international president of the American Society of Appraisers (ASA), even if gold prices aren’t particularly high right now. Part of the reason for the heightened interest in selling? It’s a bit dark: The high number of deaths from COVID-19 has left survivors to sell property owned by their deceased relatives, Smith said.

Also, people facing financial hardship because of the pandemic are looking to sell gold and other items. “People have actually come into our facility with very low-value jewelry,” said Smith, who owns PA Gem Lab in Montoursville, PA. “They need money and they’re willing to sell grandpa’s class ring. It is a sad state and people are hurting.”

With all this need, scams abound, according to Smith. So it’s wise to be cautious when selling your gold and jewelry. As with most things, knowledge is your key to success.

Before Selling Your Gold, Talk to an Appraiser

The first step, Smith said, is to talk to an appraiser. Smith pointed to the ASA, as well as the National Association of Jewelry Appraisers and the Appraisers Association of America as the major organizations in this area. In addition, he said there’s an organization for retailers called the American Gem Society. 

Appraisers who belong to one of these organizations must abide by strict codes of conduct and ethics, Smith said. All three of these outfits maintain databases on their websites where you can find an appraiser near you. For a small fee — perhaps as low as $20 — one of these independent appraisers can give you a quick assessment of what you have and what it should fetch, along with whether a piece of jewelry has intrinsic value beyond the gold weight and if the gems are real.

That should be enough, Smith said, to give consumers what they need to know to sell their items for a fair price. A seller shouldn’t need an expensive, written appraisal, such as might be required for insurance coverage.

“Most appraisers are pretty lenient that way,” Smith said. “We’re here to help and from ASA’s standpoint, we’re here to educate the general public.” Appraisers, he said, “want people to get value for their money.”

Shop Around Before Selling Your Gold

Amanda Gizzi, spokesperson for jeweler trade organization Jewelers of America, says that getting more than one offer and selling to a reputable purchaser are important steps to selling gold and jewelry safely for a fair price.

“Shopping around is a good way to understand the average price you can expect,” Gizzi said. “If you can find a jeweler that you like to buy jewelry from, you may find you get a higher amount if you use the money toward another jewelry purchase.”
Kate Mars, who lives in Arlington, Virginia, went by recommendations from people she trusted when she sold jewelry and a coin collection from a safe deposit box left when her father died.

Through the estate lawyer, she found a coin dealer in nearby Frederick, Maryland, where the dealer gave Mars a “sense of security” as he went through her books of coins and told her what had value.

The jewelry had been appraised for the estate and none of it was particularly valuable, Mars said. She took that to a jewelry store that was recommended to her — and that had been in business for a long time. “The people were nice,” she said. “They looked everything up…Even if I could have made a few more bucks (going somewhere else), I am happy with the experience.”

They also helped by providing the documentation she needed as executor of her father’s estate.  And note that for everyone selling gold or jewelry, getting a good receipt should be part of the process. It should include all the details of the transaction, including the name and address of the buyer, the date of the sale and the weight, fineness, prices and names of all precious metals involved. 

How Much Do You Get for Selling Gold?

A variety of sources online, such as kitco.com, will give you the spot price of gold. Don’t expect to get that amount, though, for old jewelry or coins. For one thing, those are wholesale values, and you are selling to a middleman, who is going to need to make a profit when he resells your property.
Smith, the past international president of the American Society of Appraisers  said some places that post signs offering to buy gold pay just 40 to 45% of the value. Pawn shops may pay just 20%. So what’s a fair value? Consumers should sell to someone who will pay 65 to 88% of the value of an item, according to Smith.

Why can’t you get more? There are several reasons. For one, businesses that buy gold are usually required by state law to hold onto items for a set number of days before selling them, Smith said. This can be a gamble because of the volatility of gold prices. The purchaser of your gold also will likely sell to a refiner or to a middleman who sells to refiners. The gold will pass through two or three sets of hands before it is ultimately sold for its value.

“Gold jewelry isn’t always very heavy, so the price that something was purchased for will not be the same as what you sell it back for,” Gizzi said. “Remember, the retailer that buys the gold, has to process it, clean it, and oftentimes melt it down to make it into something else before they can resell it.”

Another important variable that will affect price is the gold’s purity, measured in karats. Pure gold — think bullion bars — is 24 karat. But pure gold is soft, so it’s usually mixed with other metals to make it harder and more durable such as when used in jewelry. 

The karat measurement tells you how much pure gold is in the piece. The proportions of pure gold and other metals will add up to 24. So, if your jewelry is 18K, or 18 karats, that means it has 18 parts of gold plus six parts of other kinds of metal. A 10K piece of gold is 10 parts gold with 14 parts of other metals.

Should You Sell Your Gold Online?

Like with almost every other business transaction, the internet is an option for selling your gold. Ebay, for example, has a marketplace where sellers can send a photograph of their item and receive a quote — without sending in their item. Notably, their buyback partner, APMEX, only accepts bars, coins and rounds.
If you have coins or bullion, Smith said, selling the items on eBay is “better than a pawn shop.” But he prefers local in-person transactions to online sales. “Basically you know who you are dealing with,” he explained. “I guess I’m old school inasmuch as I like to deal face to face. If I don’t get that ‘warm fuzzy vibe of trust’ I go elsewhere.”

Special caution is warranted, though, if you elect to mail your items to a potential purchaser as part of an online sale. Make sure to take photographs of your items and make a list before mailing them out. Also, you should insure the package before mailing it.

Check Businesses Before Selling Your Gold

And as long as we’re discussing precautions, with potentially significant amounts of money changing hands, you want to do at least as much due diligence as if you were, say, trading in a car. In addition to professional associations and recommendations, you can check with the Better Business Bureau to find out if there are complaints against a business you’re considering, and if so, how they were resolved.

It’s smart to weigh your gold before taking it to a buyer — a kitchen or postal scale should give you a reasonable idea of the weight of your items. And make sure that when the buyer is weighing the gold, you pay attention to the procedure.

Is Selling Your Gold a Good Idea?

Is now the right time to sell? Should you wait for the price to go up, or will waiting risk losing money if the price goes down?

“Selling gold now is a good idea for those who need cash or want to use the gold to reinvest in a newer piece of jewelry,” Gizzi said. “Outdated jewelry that is broken or single earrings also make great items to sell.”

That being said, it’s possible to have regrets. “Always remember that once the piece is gone, you can rarely get it back,” Gizzi explained. “Just because a piece of jewelry is outdated, doesn’t mean that it won’t come back.” 

Source: kiplinger.com

Rent-to-own vs renting: which is best for you?

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information. 

If you’ve ever heard of the concept of rent-to-own (RTO), it probably sounds very appealing to you. After all, the biggest criticism of renting is that it feels like money down the drain. Rent-to-own seems to fix that, with your rent payments eventually counting toward your property purchase. But if rent-to-own is really as good as it looks, why aren’t more people doing it?

Keep reading for a complete breakdown of rent vs. rent-to-own to understand which option is right for you. 

Rent-to-own explained

As a concept, rent-to-own is exactly what it sounds like. You sign a contract on a property stating that while you’re renting it now, you can purchase the home at the end of a specific time period.

If you buy the property, a portion of your rental payments will count toward the purchase. Rent-to-own contracts can range from a couple of months to a few years. Most contracts don’t extend past a couple of years. 

There are a few critical components of the rent-to-own process that everyone should know about:

  • Option fee: To get into a rent-to-own contract, you typically have to pay a one-time, nonrefundable option fee. This fee is essentially a payment for getting the rent-to-own option. Typically, this fee is between 1 and 5 percent of the property’s final purchase price. 
  • Base rent: Base rent is the monthly rental payment you and the landlord agree on. Your contract will state what portion of your rent payments will apply to your purchase. For example, if your rent is $1,500 a month, your contract might say that $500 will count toward your principal payment at the end of the contract.
  • Rent premium: A rent-to-own contract typically means you pay higher-than-average rent (a rent premium) for the property. Many agreements will apply the rent premium to your principal payment when it’s time for the house purchase. However, if you don’t purchase the home, you typically don’t get the collected rent premium back. 

There are two main types of rent-to-own contracts: a lease-option and a lease-purchase agreement. In both cases, you sign a rent-to-own contract stating that the house purchase will be for a certain amount. In a lease-option contract, you get the option of buying the home when your contract ends.

If the agreed-upon price isn’t reflective of the current market value, you don’t like the house or you want to relocate, you can walk away. You won’t get your option fee or rent premium charges back, but you’re not expected to make the purchase. 

On the other hand, a lease-purchase contract states that you’ll buy the house at the end of the contract. If the housing market went up during that time, you’re getting the house for a great price, and all is well.

However, if the housing market has fallen or you’re in a worse-off financial situation, you’re now possibly stuck buying a home. 

Most people opt for the lease-option contract as it offers more flexibility. 

How is rent-to-own different from renting?

The main difference between rent-to-own and renting is that you get to build equity in your home with rent-to-own. This means your rent payments—in addition to paying for your shelter—also contribute to your financial future. 

Neither renting nor rent-to-own payments typically affect your credit. (Rent reporting is an option for some renters, but not all.) However, most people who choose a rent-to-own option do so because they have poor credit and can’t get a typical mortgage.

Rent-to-own buys them some time to improve their credit score so that at the end of the contract, they can qualify for a mortgage and purchase the home. 

While rent-to-own is excellent in many ways, it’s not without its risks. 

The potential downsides of rent-to-own agreements

If you’re considering the rent vs. rent-to-own debate, it’s essential to know the risks associated with RTO. Ultimately, you might not buy the house at the end of the contract. This could be for various reasons.

Maybe you aren’t approved for a mortgage, you don’t like the place after living in it for a while or you have a job offer in a new city. If this is the case, you’ll walk away in a worse position financially.

A rent-to-own contract charges fees and a higher rent price under the assumption that you’ll purchase the home. That option fee and rent premium were all for nothing if you don’t buy the house in the end. 

Additionally, if you sign a lease-purchase agreement, you could be forced to buy a home you don’t want. Considering a home is probably the biggest purchase of your life, it’s not a situation where you want to be locked into doing something. 

For more information on rent-to-own, examples of contracts, red flags to look out for and ways to shop for the best deal, download the Complete Rent-to-Own Guide for Prospective Homebuyers.

Lastly, there are rent-to-own scams you should watch out for. Popular scams include situations in which the landlord doesn’t own the home, the home has significant damage to it or the property is in foreclosure.

Founder of real estate investment firm Property Cashin, Marina Vaamonde, states, “It is very critical that every prospective buyer understands that the transfer of the property deed doesn’t occur until the closing takes place.” So, if the owner doesn’t keep up on their payments and foreclosure occurs, the rent-to-own contract is void. 

Should you rent-to-own or rent?

Which option you should choose depends on your circumstances. The type of people who should consider rent-to-own instead of renting are: 

  • Those who want to test out homeownership
  • Those with poor credit or without significant savings
  • Those who want their monthly payments to go toward building home equity
  • Those with low incomes

If you’re considering signing a rent-to-own contract, always involve a professional real estate agent. Essentially, this is a home purchase agreement, so a Realtor can help review the contract and make sure you’re fairly represented. 

You should not do rent-to-own if you want the flexibility of regular renting or you’re not interested in homeownership yet. 

Make a financial plan for the future

As mentioned, many people who choose rent-to-own feel that they’re on the cusp of homeownership but they just need to save more or improve their credit. If you’re considering rent-to-own, the first step is to understand your situation.

Check your credit so you know what your options might be going forward. Can you get approved for a mortgage now? Do you think you can improve your credit in a few months or a year?  If you’re too wary of rent-to-own, work on improving your credit and building your savings until you can afford a mortgage you’re comfortable with.

The credit repair specialists at Lexington Law can work with you to review your credit report to make sure it’s accurate.  


Reviewed by Vince R. Mayr, Supervising Attorney of Bankruptcies at Lexington Law Firm. Written by Lexington Law.

Vince has considerable expertise in the field of bankruptcy law. He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Lexington Law is not an RTO company. Any content provided on this website regarding the topic of RTO is nothing more than a resource Lexington Law believes might be helpful to readers of its website. Lexington did not write this content. It was provided by a third party. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

The Problems with Online Payday Loans and Fast Cash Lending

Life happens, which means sometimes you need cash fast, and you just don’t have it. Whether you need to pay for an emergency root canal or have unexpected home repairs, sometimes life just doesn’t wait for your next paycheck.

If you’ve spent some time researching how to access cash quickly, you might think that online payday loans are the answer. Lenders that offer payday loans typically promise you things like quick applications, no credit checks, and expedited approvals. They say you’ll get the cold hard cash you need the very next day. It’s an easy solution, and hey, what could possibly go wrong?

How Do Payday Loans Work?

Payday loans are so called because they’re meant to be paid back the next time you get a paycheck. They’re generally for small amounts, and don’t require collateral — or even necessarily a credit check — to get them.

The catch? Payday loans come at a price—and a high one, at that. They can have interest rates of more than 600%, depending on the lender you choose and which state you’re in. (Some states have stronger protective laws, including rate caps, than others.)

Such high interest rates, not to mention other associated fees, can quickly lead to situations where you end up getting behind on the loan and have to borrow more and more in order to pay it back — especially since each loan might come due in only two weeks or a month. Soon you’re in a hole so deep you might not know how to get out. It can be costly, greatly damage your credit, or even lead to bankruptcy.

How Much Does a Payday Loan Cost?

The short answer: a lot. But let’s look at an example.

Say you take out a $500 payday loan at an annual percentage rate (APR) of 300%. You would only pay that full 300% if you took a whole year to pay the loan off, because the APR is what you would be charged in interest over 12 months.

However, even if you only borrow money for one month, you’d have to pay 1/12 of 300%, which translates to 25%. Here’s where the math gets ugly: 25% of $500 is $125, which means that when your loan comes due at the end of its very short term, you’ll owe $625 — which might be pretty tough to meet, especially if you’re in a situation where you needed a payday loan in the first place.

What Is a Direct Payday Loan?

Payday loans are offered by a wide variety of vendors, but mainly, they all break down into two categories: direct payday loans and those offered through a broker.

Direct payday loans are those wherein the entire loan process, from application to funding to repayment, is all managed by the same company. Although these can be slightly better than indirect loans — which may involve multiple fees, longer funding wait times and harder-to-pin-down communication — they’re still a bad idea in general.

Why Is it Best To Avoid Payday Lending?

Other than the possibility that you can get money quickly if you have bad credit, there aren’t many benefits associated with payday loans. You’ll end up paying a significant amount in interest, and you’re usually expected to pay the money back in a very short period of time — usually not more than 90 days, but two weeks on average.

The interest on your loan can also compound daily, weekly, or monthly. This means that interest charges will start accumulating on the interest you already owe, which will inflate your loan balance even more.

Depending on how much you borrowed and your financial situation, compounding interest can make it incredibly difficult for you to pay back the loan. Many times borrowers end up taking out additional loans to pay off the payday loan, which can lock them into a seemingly endless cycle of debt.

You’re also unlikely to be able to borrow a large amount of money because payday and fast cash loan lenders typically have low maximum borrowing amounts.

Just to twist the knife, you won’t even be building your credit if you do manage to pay the loan back on time, because most of these lenders don’t report your behavior back to credit bureaus. In contrast, above-board lenders will report back to credit bureaus when you’re paying your bills on time and in full, and that can boost your credit score.

What Are Some Alternatives to Payday Loans?

While in an ideal world, you’d avoid any kind of consumer debt, sometimes it’s simply unavoidable. Still, there are financially favorable alternatives to consider before you sign up for a dangerous payday loan.

Paycheck Advance

The best kind of money to borrow is money you’ve already earned. While not every employer offers it, a paycheck advance can be a relatively low-risk way to fund last-minute emergencies. An advance on your paycheck basically means getting paid earlier than you normally would, with the balance deducted from your future paycheck.

But tread carefully: many employers offer paycheck advances through apps and platforms that may assess a one-time fee, or even charge interest. While the rates may not be as astronomical as payday loan rates, it’s still worth taking a second look at the paperwork to ensure you understand what you’re signing up for ahead of time.

Debt Settlement

Another option is debt settlement, which is where you offer a creditor a lump sum payment on a delinquent debt — a lump sum that often ends up being far less than the original amount you owed.

However, doing this does require some negotiating, and sometimes even some legal know-how, which is why many people seek the help of professional debt settlement companies. This, too, is tricky, because scams abound, and some debt settlement companies may try to charge exorbitant fees to “eliminate your debt,” all without actually doing any work on your behalf. The FTC has more information on debt settlement and how to look for a reliable firm, if you choose to go this route.

Personal Loans

Many personal loans are unsecured loans — meaning no collateral is involved — that can be used to pay for just about anything. And although they tend to have higher interest rates than secured loans, like mortgages or auto loans, those rates are still much lower than payday loans.

With its lower interest rate and longer term, a personal loan will likely cost you less money than a payday loan in the long run. And some online personal loan lenders can process your application quickly and even get you the money you need in a matter of days.

Unlike payday loans, you have to go through a credit check to qualify for a personal loan. However, if you have a steady income and meet the lender’s eligibility requirements, you’re likely to qualify for a lower interest rate than you would if you used an online payday loan.

Your repayment timeline may probably be much less stressful if you opt for a personal loan rather than a payday loan. Personal loans come with the option of longer terms — a few years instead of a few months.

And because you can pay your loan off over a longer term, your monthly payments might be more manageable than a payday loan. There also tend to be fewer fees attached to personal loans, and you might be able to borrow more because personal loans have higher loan maximums.

Personal loans aren’t much more difficult to apply for than payday or fast cash loans. You can typically get pre-qualified online by answering a few questions about your income, financial history, and occupation.

The Takeaway

Of course, it’s always important to repay debts on time and in full to avoid late fees and exorbitant interest charges, but a personal loan is generally more manageable than a payday loan would be.

If you need cash fast, but you want to borrow money from a reputable lender without risking out-of-control interest payments, a SoFi personal loan might be right for you. Learn more today.


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Source: sofi.com

A Guide to Unclaimed Scholarships and Grants

Maybe you’ve heard that billions of dollars’ worth of scholarships and grants go unclaimed every year. Unfortunately, some money is, yes, left on the table each year, but billions in merit- and need-based aid are claimed.

Of the federal government’s annual budget of $32 billion for student grants, $2 billion is unclaimed, according to researchers at EducationData.org.

The beauty of scholarships and grants is that you almost never need to pay them back. Who doesn’t love gifts? But acquiring them will take at least a little effort.

Two Types of Aid to Lay Claim To

Financial aid can be need-based or merit-based.

Need-Based Aid

Federal need-based aid is determined by the expected family contribution, as calculated by the Free Application for Federal Student Aid (FAFSA®).

The Pell Grant, the Department of Education’s biggest grant program, is geared toward students who demonstrate significant financial need, but the total cost of attendance at a particular college also plays a role.

It doesn’t get much better than grants for college, like snagging a Pell Grant as high as $6,495 for the 2021-2022 award year.

It has been estimated that more than $2 billion in annual Pell Grant money goes unclaimed, but applying for the Pell is simple: by filling out the FAFSA®. In fact, schools must determine a student’s Pell Grant eligibility before calculating eligibility for other federal student aid programs, according to the National Association of Student Financial Aid Administrators.

Any student who could use even a little college financial aid has nothing to lose by filling out the FAFSA. And even if you are not eligible for federal aid, realize that most states and schools use FAFSA information to award non-federal aid.

FAFSA information will also determine whether a student qualifies for federal work-study, when undergraduate and graduate students with financial need are given part-time jobs.

Some private colleges and universities will also want students to fill out the CSS Profile, which determines eligibility for institutional awards and grants.

Merit Aid

Merit scholarships are awarded by colleges, employers, individuals, businesses, nonprofits, states, religious groups, and professional and social organizations to academic or athletic achievers, as most of us are aware, but merit aid also may be determined by community involvement; level of dedication to a field of study; race; gender; teacher recommendations; and other criteria.

The awards are not based on financial need.

The biggest source of “free money”? Colleges, according to a recent College Board Trends in Student Aid Report. Thanks to competition to attract students , nearly every college and university in the country offers merit-based aid in some form.

So it could be worth researching different schools’ merit aid offerings.

To sniff out unclaimed private scholarships like a truffle hunter, you could start by thinking about all the ways you have, well, merit; making lists of opportunities and eligibility criteria; and pursuing only the scholarships you’re best qualified for.

There are all kinds of scholarship search sites out there, from BigFuture to Unigo. (Be aware of sweepstakes on some sites that masquerade as scholarships.)

The Department of Education recommends the following tactics to find scholarships:

•   Talk to your high school counselor.

•   Use the Department of Labor’s scholarship search tool to sort more than 8,000 opportunities for student aid.

•   Inquire at the financial aid office at your college of choice.

•   See if your employer or your parents’ employers offer assistance.

•   Head to your local library’s reference section.

•   Look for scholarships offered by foundations, religious or community organizations, local businesses, or civic groups, as well as organizations (including professional associations) related to your field of interest.

Why Would Any Scholarships Go Unclaimed?

So is it true there are obscure scholarships left unclaimed? There is no database that can give precise answers, but it makes sense that when specific parameters exist around a particular scholarship, fewer students will qualify.

For example, scholarships exist for North Korean refugees who are permanently living in the United States. Applicants must have been born in North Korea or the child of someone born in North Korea.

Let’s say you don’t fit those parameters. Other unusual opportunities include the following:

•   If you dazzle your friends with your ability to make prom outfits using only duct tape, then you could win a $10,000 Stuck at Prom scholarship . Seriously.

•   Or maybe you have the best plan ever to survive the zombie apocalypse. If so, you could apply for the Zombie Apocalypse Scholarship ($2,000).

•   If you live in the Phoenix area, you’re a tall graduating senior, and, if you’re a finalist, you’re game for being interviewed and measured for the chance to gain all of $250, you could stand up to the challenge of the CATS Tall Club program.

Keeping an Eye Out for Scholarship Scams

Plenty of scholarship and grant money is out there waiting to be claimed. Unfortunately, though, there are also financial aid scams , including scholarships that aren’t legitimate. The Department of Education offers tips to protect yourself, including:

•   Know that you don’t need to pay to find scholarships or any other form of financial aid.

•   Check information about scholarship offers at a public library and/or online.

•   Talk to the financial aid department at your college of choice to verify legitimacy.

Also, before students begin a search, they may want to be aware of “scholarships” that are actually sweepstakes because their information may be sold to third parties.

The Takeaway

Finding unclaimed scholarships and grants — free money — is the ideal way to fund college. To cover all costs, many students will then need to take out federal student loans, and some will turn to private student loans.

Although private student loans do not carry the benefits and protections of federal student loans, they can fill gaps when you’ve considered all of your federal grant and loan options but your expenses still exceed your means.

SoFi offers private student loans with competitive rates, flexible repayment options, and no fees.

It takes just three minutes to check your rate.


SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Source: sofi.com