March 23, 2010 – New York, New York — Pay lending practices have become a national issue. In Arizona, the state senate is preparing to vote on these practices. The bill would continue to let pay day lenders to charge high interest rates on pay day or short term loans. Both parties who are in favor and in contra of the bill held events on Tuesday to persuade both the public and lawmakers.
The public has already voiced their opinions in 2008 regarding pay day lending practices who adamantly were opposed to allowing payday lenders to permanently remain open. Payday lending for consumers was not supposed to be a permanent financial lending option. However, due to the vicious cycle of debt loans that were meant to be paid back in a period of two weeks are still being paid back years later. If this Arizona bill is passed, it will override the public’s opinion.
Those who are in favor of the pay lending services include those who will lose their jobs if the bill is not passed. Supporters of the bill passing argue that pay day lending is a consumer’s choice and it is not the fault of those providing the services that the borrowers are too irresponsible to pay back what is owed on their own volition.
The debate is difficult because the opponents of the bill claim that the payday lending industry takes advantage of those borrowers who the lenders know will be unable to pay back the short term loan. Not only this, but they also can charge up to 400 percent on every 100 dollars that is taken out which creates a cycle of debt nearly impossible for some to get out of.
Josh Jackson, Spokesperson for PaydayRate says, “Many actions are being taken to allow payday lending to continue to be a service for the public but to also shield consumers from unfair payday lending practices.”
About PaydayRate: PaydayRate is the leading online payday industry watchdogs. At PaydayRate, the payday watchdogs have made learning about Payday Loans fast and easy. Nobody makes it simpler, to understand the pros and cons of emergency payday lending. PaydayRate allows visitors to do their research before deciding on a payday loan. In addition, PaydayRate allows Visitors to share their experiences with companies on its educational forum.
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March 2, 2010 – New York, New York — A bill has been passed regarding payday loans which will tremendously impact the payday lending industry in Colorado. This bill is seeking to cap payday loans at 36 percent instead of the regular flat fee that the lending companies are currently charging. Payday loan fees are high especially when they are compared to annual rates. However, the payday loan is a short term loan with small amounts being loaned out. Loans are between $250 and $2500 to be paid back in about a two week window frame. On a $500 loan, you would have to pay an interest rate of $75.
These loans are commonly taken out in cases of financial emergencies. Only people with steady full time jobs are allowed to take out such loans as the loaning companies require one’s employment information and payment stubs to verify that the borrower is currently working and can pay back the loan. According to the Attorney General’s office, the average loan asked for in 2008 was for $369.
Payday loans will reportedly be only allowed one at a time if the bill passes in Colorado. However, Colorado payday borrowers have on average only requested between one and six loans in 2008 (72 percent of borrowers). Only 5.8 percent of the 303,462 loans taken out in 2008 took out more than 13 loans in total, which is a very small percentage nationally. The reason why this legislation is threatening is because it could entirely wipe out payday lending. With an interest rate cap, these small loans will go out of business and basically eliminate the industry in the state of Colorado.
Josh Jackson, Spokesperson for PaydayRate says, “Colorado is currently in a difficult position. In a matter of months we will know what the voters of the nation believe will happen to the payday loan.”
About PaydayRate: PaydayRate is the leading online payday industry watchdogs. At PaydayRate, the payday watchdogs have made learning about Payday Loans fast and easy. Nobody makes it simpler, to understand the pros and cons of emergency payday lending. PaydayRate allows visitors to do their research before deciding on a payday loan. In addition, PaydayRate allows Visitors to share their experiences with companies on its educational forum.
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March 2, 2010 – New York, New York — It is true that financial emergencies come up and we need methods to pay off these financial bumps. However, a credit card law was passed and was recently taken into effect which will inhibit banks from using unethical lending practices which make most people climb into a long cycle of debt. This law was put into effect because lenders have charged outrageous interest rates. These companies defend themselves by stating that the reason why they use their particular lending practices is because they lend to high risk borrowers, for this reason high interest rates and fees are charged.
Payday lenders are common resources for quick money as 19 million people used at least one last year. Borrowers basically take out a short term loan between $250 and $2500 which they will pay back on their next paycheck. There is a fee of about $15 to $30 of interest charged for every $100. Some states allow for the loan to roll over to the next month while in other states the payday loan is illegal. With an annualized rate, this small interest rate can reach up to 391 percent.
If you do not have a credit card or a debit card, you can use a prepaid card which can be used to make online purchases. These cards are filled with cash and are rechargeable. There are fees that are also included such as monthly maintenance fees, cash withdrawals from the ATM. Inactivity fees, balance inquiry fees and fees for bill pay.
Subprime credit cards are another line of credit that borrowers can use. These cards normally carry many fees. In the first year of use there is a 25 percent capped rate and the APRs can be set around 79.9 percent with the possibility of a raising rate. Processing fees can also be charged. Therefore, there are many types of credit possibilities for borrowers that are becoming threatened by new passing legislature.
Josh Jackson, Spokesperson for PaydayRate says, “the lending industry is going through a difficult time but borrowers may also be hitting some tough times as well if they have no other options for receiving money through payday loans. ”
About PaydayRate: PaydayRate is the leading online payday industry watchdogs. At PaydayRate, the payday watchdogs have made learning about Payday Loans fast and easy. Nobody makes it simpler, to understand the pros and cons of emergency payday lending. PaydayRate allows visitors to do their research before deciding on a payday loan. In addition, PaydayRate allows Visitors to share their experiences with companies on its educational forum.
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March 02, 2010 -New York, New York — Payday loans can be very beneficial for people who are in need of a short term loan that they can pay back by their next paycheck to save themselves from a small financial crisis. One never knows when an emergency will arise, so having a payday loan option can be very beneficial for many people. However, many people, especially in Wisconsin, have noticed how many people have fallen into a cycle of debt especially among the young and the low income families, due to taking out these short term loans.
In order to fight against the traps of lending companies, a group of legislators are finally speaking up for those who have been taken advantage of. This group is looking to eliminate auto title loans, restrict the loans to $600 and only allowing borrowers to take out one payday loan at a time. One of the amendments that did not make the cut was the interest cap rate of 36 percent which would have helped borrowers to not be taken advantage of. Many people believe that if the interest cap is included and approved, that the entire pay day lending industry would be eliminated along with the valuable option of turning to a payday loan in the case of a financial emergency.
Payday loans are normally taken out for an amount between $250 and $2500 with borrowers being allowed to take out more than one loan at a time. This encouraged a lot of roll overs and enhancing one’s cycle of debt. Large interest rates that reach into the hundreds are charged which make it nearly impossible for people to get out of debt. The payday lending industry may be under attack but it is not without reason. The decision surrounding payday lending will be difficult as these companies will be losing millions of dollars, their existence is threatened and the borrowers who are responsible may not have the option for a loan during their most difficult period.
Josh Jackson, Spokesperson for PaydayRate says, “The choice will be difficult for voting on the future of payday loans. ”
About PaydayRate: PaydayRate is the leading online payday industry watchdogs. At PaydayRate, the payday watchdogs have made learning about Payday Loans fast and easy. Nobody makes it simpler, to understand the pros and cons of emergency payday lending. PaydayRate allows visitors to do their research before deciding on a payday loan. In addition, PaydayRate allows Visitors to share their experiences with companies on its educational forum.
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March 2, 2010 -New York, New York – The Wisconsin Assembly finally approved a long standing bill that is set to regulate and transform the payday lending industry in the state of Wisconsin. This bill was approved with a vote of 59 to 38 after being locked away behind closed doors after numerous hours of debating and discussion. This vote is crucial for people who take advantage of payday loans which are short term loans that a borrower must payback with his or her next paycheck.
Those who are unable to pay back the loan which creates a cycle of debt for many people. These loans are commonly used by people who are unable to receive typical loans or come from low income families. With the passing of this bill, payday lending will still be available but without the abusive practices that companies in the payday lending industry are accustomed to practicing.
Many Republicans were not in agreement with the bill as they believed that the bill placed too many restrictions on payday lending. This would then effect people who need payday loans greatly as well as the lenders themselves. Payday lenders will still be able to charge high interest rates but they will not be able to enforce outrageous interest percentage rates. Recently, an amendment was shut down after a 56 to 41 vote in the assembly that would have placed a cap on the interest rates to charge at the most 36 percent.
Payday lending in Wisconsin has rapidly grown throughout the years with 530 payday lending stores. In 2008, these lenders gave out $723 million alone in Wisconsin. The supporters of the bill claim that these changes will be beneficial and control borrower’s habits as they will only be able to take out one loan at a time with a maximum take out or $600, which includes interest. There will be no rollovers since this practice creates the cycle of debt as the interest rates rise.
Josh Jackson, Spokesperson for PaydayRate says, “The passing of this bill is a victory for every victim of payday lending debt in Wisconsin.“
About PaydayRate: PaydayRate is the leading online payday industry watchdogs. At PaydayRate, the payday watchdogs have made learning about Payday Loans fast and easy. Nobody makes it simpler, to understand the pros and cons of emergency payday lending. PaydayRate allows visitors to do their research before deciding on a payday loan. In addition, PaydayRate allows Visitors to share their experiences with companies on its educational forum.
