Payday loans are often referred to as ?sleazy business? but many people both in the United States and UK are taking advantage of payday cash advances on a regular basis. There are people who use these short term loans to leverage their personal finances between paychecks. There are others who simply have to use them because there are no other alternatives left to get a loan. It is true that financial conditions and the social-economic environment in which many people have been pushed to the edges of survival, have contributed to high demand for payday loans.
These loans have induced criticisms from consumer groups, state attorneys and churches due to their exorbitant finance charges. As a result, some states like, West Virginia, slapped interest rate caps on small consumer loans.? In West Virginia there is currently a cap in effect of 31% APR. All but few payday loan operators have effectively left the state because providing loans to people with bad credit at such a rate is simply infeasible due to high default rates on such loans. The same happened in Georgia where payday loans are effectively banned. According to the opponents, many payday loan customers get entrapped in a so-called debt cycle when they renew and take out new loans just to keep up with the finance charges.
The above legal constraints have pushed many consumers to look for alternatives to payday loans. Also, some turned to the Internet in search for online cash advances. So, what are some feasible alternatives?
If your credit score is fair, you certainly can find a provider who may lend at a lower, capped rate. You can also apply for an overdraft line of credit. Those with good credit can apply for emergency cash loans from companies like OneMain Financial. But what to do if your credit score got tanked by the recent economy? You don?t really have many options except online payday loans some of which are not regulated by state laws, or title loans, which are still regulated.
With online cash advance loans you have to be careful to avoid fraudulent sites. It will be best to seek reviews before going through with the application. See a reference below where you can find legit consumer reviews of payday loan online lenders.
Title loans, such as those that involve your car title, may be an option but it is a risky one because you do not want to have your car repossessed in case you can?t pay the loan back. These loans are still subject to state regulations because they charge high interest rates. While payday loans are small $100-$1,000 advances, car title loans can be issued for larger amounts.
Banks like Wells Fargo, provide paycheck loans to their customers but they still charge triple digit interest rates and, in states with interest rate caps in place, these loans are unavailable.
This analysis was provided by the analytics department of Payless Payday Loans LLC that publishes reviews of online payday loan lenders and tracks legal issues related to payday loan industry in the US
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