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April 30, 2020

Payday Loans In USA

You are likely to experience financial turbulence at some point in your life and going to relatives or banks is not always the solution. Where else do you turn to at such a time of need?

Payday loans are the most popular forms of lending to low-income earners in the United States of America!

In most cases, borrowers of these quick loans take more than what they expect. These loans are generally below $500 and are characterized by an annual interest of 400% making it ten times higher than other forms of lending in the USA.

Payday loans are most popular in the USA because unlike other financial institutions that require borrowers’ credit scores or collateral, they only require a proof of source of income.

Financial experts have argued out that payday loans take advantage of the low-income earners. This group is economically vulnerable hence can easily be coursed into taking new loans to settle the old ones.

Do consumers of payday loans act on their own best interest while taking these loans?

Evaluation Context

Payday loans are accessible in 32 states of the US and outlawed in 18. In 2016, Americans were reported to have taken $35 billion in payday loans and repaid with $6 billion interest and fees. Nationwide, more than 80% are either renewed or rolled over with another payday loan within two weeks.

In Indiana, regulations of payday loans environment are similar to that of other US states. According to studies that were conducted in 2017, payday loans borrowers averagely took 6 loans annually. Lenders average income was estimated to be around $28750.

New Payday Regulations

In 2017, the consumer financial protection bureau introduced new regulations aimed at taming payday lenders. In the new laws, lenders are required to ascertain the borrower’s ability to repay the loan prior to advancing the loans. It also prevented the lenders from making more than two attempts to debit borrower’s bank account. However, the latter was cancelled by the Bureau In 2019 and the implementation of the former rule delayed.

Payday Loans USA Statistic

  • 12 Million Americans take payday loans out each year
  • In 2017 there were 14,348 payday loan storefronts. To put that in perspective McDonald’s had 14,027 locations
  • The average loan is $375
  • Every year an average of $9billion in payday loans fees
  • 75% of payday loans are taken out by consumers who have used them before

USA Online Payday Loans

Technological advances have made it possible for most payday lenders to provide their services online. This has relieved the burden of lenders having to deal with more paperwork while seeking financial help.

The requirements of accessing payday loans online are relatively easy to meet as one is only required to be of legal age, possess a U.S passport and a social network account of one of those various platforms. You will also be required to provide your phone number and email address but they shall not be shared with a third party.

What you will get?

Apart from offering you dependable and convenient payday loans, online lenders disclose all other related charges. No collateral is required and they ensure that you’re comfortable with all their decisions. They often offer exactly what they promise.

Benefits

Merits of getting payday loans include,

Fast; payday loans applications are approved immediately on providing all the required information. Unlike the traditional payday loan application process that may be long and tedious, online lenders offer simple and quick application procedures.

You get your payday loan within hours after applying. However, in some cases, your loan might take a day to be approved.

Convenience; unlike traditional payday loans where you have to meet loan officers and make numerous follow-ups, online lenders allows gives you the convenience of making all the required application process from the comfort of your home.

Protection of your credit score; the short loan repayment period may seem uncomfortable but enables you to work hard and settle the loan in them hence protecting your credit score.

To prevent the payday loan borrowers from extortion, some jurisdictions regulate the annual percentage rate (APR) that lenders can charge.

Let us now take a look at Federal regulations in various states.

District of Columbia regulations

From January 9, 2008, the interest rates that can be charged by payday lenders was capped at 24%, making it similar to the interests charged by banks and other credit unions. Payday lenders are also required to obtain a license from the District Government before allowed to commence their operations.

Outlawed in Georgia

Despite the fact that Georgia law outlawed payday lending for over 100 years, the state was unsuccessful in closing down the industry until the 2004. In that year, laws made payday lending a felony, allowed for racketeering charges and allowed potentially costly class-action lawsuits. In 2013 this particular law was used to sue Western Sky, a tribal online payday lender.

Regulations in New Mexico

In New Mexico loan fees are capped, total loans by consumers are restricted immediate loan rollovers are prohibited; where a borrower takes out a new loan to settle a previous loan, under a law that became effective on November 1, 2007. On defaulting, lenders are required to automatically offer the borrower 130 days extension without charging them any fees and interest. Furthermore, the legislation requires borrowers to wait for 10 days before taking another payday loan on settling their previous debt.

The law allows loan repayment period to run from 14 to 35 days with a $15.50 cap fees on every $100 borrowed.

Sunset Operations in Arizona

The usury laws in Arizona bars payday loans lenders from charging more than 36% interests on loans annually.

After the expiration of laws that exempted payday lenders from 36% cap in July 1, 2010, Terry Goddard, state Attorney General initiated Operation Sunset. This operation aggressively pursued payday lenders who violated the lending cap. As a result, most payday loan companies closed shops in Arizona.

Economic Effects of Payday Loans in USA

As much as payday loans provide quick financial solutions to borrowers, it also has effects on the USA economy which includes,

Massive job loss as a result of the introduction of online payday lenders. In 2013 alone over 14500 jobs were lost.

Most borrowers have become bankrupt. In 2016, it was reported that over 56,246 payday loan borrowers became bankrupt.

If you’re looking forward to getting payday loans in the USA, all you need to do is meet some standard requirements. Basically, the most important one is proving that you have an income source and you’re capable of repaying the debt.

TOP 10 Payday loans websites USA

Here are My Quick Loans top 10 Payday loan websites in the USA

1 – www.paydayme.com – Paydayme is our number 1 choice in the TOP10 USA Payday Loan Websites. They offer payday loans from $100 – $5,000. Quick and simple application form and cover numerous states.

2. greendayonline.com – Green Day Online offer loans from $100 and $1,000.

3. cashnetusa.com

4. www.acecashexpress.com

5. www.1hourloanusa.com

6. personalmoneynetwork.com

7. www.lendup.com

8. www.checkngo.com

9. checkintocash.com

10. af247.com

 

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