Payday Loan Lowdown

I’m really not surprised to know that payday loans are one of the fastest growing businesses across the United States. I mean if you cannot make ends meet with your earnings, you would go in for a fast cash loan. And that explains how there are more than 22,000 payday stores across the country. And our lawmakers prefer to ignore this festering problem. Abqtrib.com reports:

The closest New Mexico has come to curbing the payday and car-title lending industry is a set of proposed regulations worked out by the governor’s and attorney general’s offices and announced in May. If they pass the muster of public input, they could go into effect as soon as next month.

Read more: Lawmakers work to make payday loans more manageable

Irrespective of the many names that have been attributed to them, payday loans survive and thrive because of their immense popularity. Their popularity stems from the fact that they are easily and quickly available to the person in need. You may just have been put in the unenviable position of unexpectedly needing some cash and being “caught short”.

You might have had an unexpected medical bill or car repair bill, or you might have to travel unexpectedly, like in the case of a death in the family. Others who need quick cash use it to pay their everyday expenses, like rent, groceries, utilities, etc. Whatever the reason, you need that cash and you just don’t have it. So, what do you do? Walk into the nearest payday loan center, complete the formalities and walk out with the money you require. Simple!

It is quite possible to find many people going for the first time to a payday lender for short term loan and on the contrary his visits increases in future course. This is because of the relatively high interest rates and fees that often accompany such short-term loans. Quite annoying but that’s reality.

To address that Michigan took a lead by favoring customers on short term loan rates rules being made to go through refinement with changes in sliding fee scheduled and capping fees with incremental decrease depending on the size of the loan.

The new guideline is supposedly going to permit customers a maximum of two outstanding loans at once. The regulation on payday lenders is now going to prevent fraud, abuse and illegal activity. This will also be beneficial in terms of no ill effects for the payday lenders and that too, regardless of their size.

According to a research, the nonprofit centers that are available as responsible lending concerns estimate more than 90 percent of the small, short-term and high-cost loans go to repeat borrowers. Now with a change in Michigan rule…there could be an increased lending at other outlets too, even if they are not happy about the change.

Payday loans are short-term loans issued against next payday. If you wish to avail that, will you be able to avail that? Sounds silly to you but there lies the flick. Lenders are smart, especially those who are dealing in payday loans. Since the interest rate on such loans is usually high, lenders tick for those who are high in debt or have a history of using high-risk lenders. They go by some conditions to make you qualify for lends.

For you have to have a job or receive a regular income and make at least $1000 per month. Then you have to write personal check to lenders for the amount to be borrowed and also, add a specific fee. The cost of payday loans varies from company to company and hence the criteria changes with changing hands. The good thing is that there is no dearth of payday loan lenders and you can approach them online too. At the end, you have to be eligible and the key lies with the lenders.

It is all fine and good to sermonize about saving money and keeping it for a rainy day. But how many of us are actually capable of doing something like that? Very few. And the number of people who are unable to make ends meet, is increasing. Rising gasoline prices, job layoffs, increasing insurance rates, high student loan interest rates… our finances are already stretched taut. So imagine what will happen if your car breaks down — where will you get the spare cash to pay to correct such a simple problem?

It’s never the big things that bring us down. At the cost of sounding a bit dramatic — all it takes is a little pebble to destroy a space shuttle when it is in outer space (Bet you didn’t know that one). Well to get back to where I was, if a small, unexpected expenditure threatens to throw your monthly plan out of gear, you need help to get back on track quickly. And that’s where a payday loan works.

Irrespective of the many names that have been attributed to them, payday loans survive and thrive because of their immense popularity. Their popularity stems from the fact that they are easily and quickly available to the person in need. You may just have been put in the unenviable position of unexpectedly needing some cash and being “caught short”. You might have had an unexpected medical bill or car repair bill, or you might have to travel unexpectedly, like in the case of a death in the family. Others who need quick cash use it to pay their everyday expenses, like rent, groceries, utilities, etc. Whatever the reason, you need that cash and you just don’t have it. So, what do you do? Walk into the nearest payday loan center, complete the formalities and walk out with the money you require. Simple!

The names are varied and interesting but at the end of the day, all these payday loan stores are similar in one aspect — they try to squeeze you dry of your last dollar. According to national consumer group ACORN, a vast majority of these stores are placed in minority communities, preying on the poor and elderly and dragging low-income wage earners and people who rely on monthly government assistance into deeper debt cycles. Businessreport.com reports:

Beth Butler, an ACORN community organizer in Louisiana, says she recently attended a meeting of the group’s national officials, and payday lending was a hot topic. She says ACORN has supported legislation at the local, state and national levels with the goal of limiting the growth of what she calls "predatory lenders." "They fight us tooth and nail," Butler says. "Some of these payday lenders are owned by major banks. So the big financial institutions are lined up against us."

Read more:The loan peddlers

You’ve heard a lot in favor and against payday loans. But what exactly are these loans and how can you use them. Here is a simple lowdown on payday loans for the uninitiated.

Payday loans are short-term loans for employed people. This helps employed people to tide over difficult situations where they need money immediately and cannot wait till their salary is due. These loans are very convenient and handy, but have one small problem — a high interest rate. Interests on payday loans have been known to cross the 500% mark!

The good thing about payday loans is that you don’t have to wait for a credit check by the company. A payday lender doesn’t need to know your credit history and they will not bother to ask you for it. While payday loan companies differ in the information that is required, most of them ask for the following information when you apply for a loan: Proof of employment, proof of a checking account, last bank statement, social security and driver’s license numbers, and proof of residency.

To apply for a payday loan, you only have to give your lender a personal check for the amount borrowed plus a fee. This check is cashed on a future specified date. And how do you get the amount? Once the company approves your payday loan, the amount is deposited into your account. This is done pretty quickly, usually by the next business day. If you cannot repay your payday loans on the date specified, you can extend the loan period. You will only have to pay an additional fee.

Payday loan stores are all over Kansas and according to recent figures, there’s been a recent growth surge in the industry, which leads to a surge in debt for Kansans. Credit counselors claim to be seeing an increasing number of people forced into debt thanks to this surge in the availabilty of payday loans. 49abcnews.com reports:

Those who work in the payday loan industry said they are most often used by people with legitimate emergencies, like needed medicine for a sick child or necessary car repairs.

Read more: Benefits, consequences associated with payday loans

Live in Kansas and plan to take a payday loan? Then it is important that you know a few facts about payday loans and more importantly about the law before you do so. Kansas.com reports:

Payday lenders can assess only one charge for a returned check. They must stamp "Negotiated as part of a loan made under K.S.A. 16a-2-404. Holder takes subject to claims and defenses of maker. No criminal prosecution" on the back of the check. That means you cannot be prosecuted for bouncing a check to a payday loan company.

Read more: Thinking about a payday loan?

The Navy is busy fighting a different kind of enemy and that too on home turf! Sounds intimidating doesn’t it? Well, that’s how the Navy is reacting to payday loans. According to the commanding offcer of the Naval Base Point Loma: they are going to ‘defeat the predators’. These payday lenders have made a huge dent into the financial stability of military members and their families. These shops, identifiable by their big signs and attractive offers, are sprouting up all over the region outside the gates of Navy and Marine Corps bases.

The problem has now gotten so bad that it can no longer be ignored and needs to be dealt with on a war footing. And that is exactly what the Navy plans to do. One of the ways it can do this is by helping Sailors to become knowledgeable about the financial resources available to them that are designed to help them out. Navycompass.com reports:

"Congress appropriates millions of dollars, and we have millions more in volunteer-donated dollars that are designed to help Sailors in financial need," said Capt. Mark Patton, commanding officer of Naval Base Point Loma. "It’s not just for a guy in trouble; everybody ought to use these resources because they’re designed to help you build a financial plan. Fleet and Family Service Centers, Navy-Marine Corps Relief Society, and several of the patriotic credit unions in the area are there to help Sailors."

Read more: Navy Preying on Predatory Lenders