Are payday loans about to disappear? Maybe.
If you have an emergency, like a utility shut off notice, broken furnace, car broke down, medical needs, don't be afraid to apply for a payday loan. There are many consumer protection companies that say payday loans are a complete rip-off to the people that need them. These are the same people leading the charge to get rid of payday loans and payday lenders, forever.
Don't believe the hype.
Here's how it works: Let's say you need to borrow some money. Payday loans can range from $50 up to $1500. If you need to borrow $200, you would payback $230 for a 14 day loan. This works out to an Annual Percentage Rate(APR) of about 391%. Sounds expensive, doesn't it. Well that rate only applies if you were to take out this loan 26 times during the year for 14 days.
Does this happen? Yes. There are some borrowers who payback, and come back and borrow the next day. But that's not the point. Everyone doesn't. Payday loan critics
use this rate in their never ending attempts to get rid of payday loans.
If you use this credit option responsibly, for emergency situations, you're paying 15% using the example above. I just think that if a person needs a payday loan, he or she should be able to get one without some politician telling them that they can't.
Payday lenders are under assault throughout the country at the moment. In Ohio, voters passed Issue 5 last November which changed the way payday loans are being done here. The new law required credit counseling, lower interest rates, a four payday loan minimum per customer per year, and the creation of a database to keep track of borrowers and their activities conducting payday loan business. Other states have shut down payday lenders completely.
Most payday loans in Ohio are now referred to as small loans. One of the countries largest payday loan companies, Advance America, offers only $200 and $500 loans in some parts of Ohio. Many other payday loan companies have been forced to closed their doors.
So if you need a payday loan, make sure you keep yourself current about what's going on in the industry in your state. Trust me, no matter what anyone tells you, there is no easier way to get the money you need than from payday loans.
