Payday Loan Report - Everything you need to know about payday loans, and how to beat the system.

Payday Loan Companies Change Practices (for the Good)

I'm a believer of free market. As long as the nature of payday loans are properly disclosed, and the industry stops misleading marketing, I don't see an issue with the high interest rates. We have to allow borrowers to make decisions based on free will.

"Under pressure from lawmakers and consumer groups, the payday lending industry on Wednesday announced changes to educate borrowers and help customers who have trouble making payments on short-term loans. ... The biggest change would give customers more time to pay back a loan with no financial penalty. This "extended payment plan" would be available at least once a year and provide borrowers between two and four extra months to pay off loans. Other changes include a $10 million national ad campaign warning that payday loans are not a long-term financial solution and a ban on ads that promote payday advances for "frivolous purposes" like vacations. Consumer watchdogs remained skeptical. "This does not solve the problem of triple-digit interest rate payday lending that traps borrowers and ..." Full Story

Payday Loan ABC Tracks Industry Developments

If not for the news section, Payday Loan ABC is just a me-too payday loan site that seeks to solicit online applications from people in bad credit and in urgent need of cash. It provides up to $500 next-day cash advance to almost all states (excluding AR, CT, GA, NJ, NY, PA, PR, WV, and VT). All you have to do is to fill up a quick application that usually includes a paystub copy, a voided personal check, recent bank statement and contact information. Funds are usually deposited to your checking account in the next business day. The news section of Payday Loan ABC is certainly interesting. It is definitely not for payday loan applicants -- it tracks legal developments, federal agency research, regulations and ... Full Story

Do You Know The Pros and Cons of Payday Loans?

Short term instant loans are known as payday loans. These are cash advances that are to be returned with interest on payday. Within a few minutes of applying online the loan will be approved and you will have the cash within a couple of hours. All it needs is your name, address, and bank details. Most often, the people who advance these loans do not perform a credit check. There are several online sites like www.personalcashadvance.com/ that advance up to USD 500 instantly. Also known as cash advance or post-dated check loans, the borrower can write out a check that can be cashed in on payday and avail the amount the check is for immediately. To get this instant cash the charge for every USD ... Full Story

Online Payday Loans: Try At Your Own Risk

Bankrate reminds us that online payday loans may well be scam that extracts your personal information.

"For starters, you'll provide an amazing amount of personal data -- Social Security number, driver's license number, mother's maiden name and, of course, your name, address and employment information -- to the Web site. You'll also give your checking account number and bank routing number, so the lender will have access to your account. The lender will deposit your loan into your checking account and dip into your account to extract interest, fees and the principal. Some require that you fax them your latest pay stub, most recent bank statement, photo ID and a voided check. But to whom are you giving this information? More than likely you won't have a clue. Many Web sites that pop up when you do a search for something ..." Full Story

Payday Advance Interest Rate Capped At 36% For Servicemembers

This kind of policy may bring unintended results. Like minimal-wage law, this maximum-rate law will discourage payday loan providers to underwrite more loans for servicemembers of the country. And at the end of the day, those who are underpaid by DoD will have one less way to get relief.

"Consumer loans to servicemembers will be limited to 36% annual interest next year under a law President Bush signed Tuesday that is aimed at store-front lenders clustered around military bases. The law is a response to "payday advance" stores that market short-term loans, typically charging $15 or $20 per $100 loan for periods of up to two weeks or a borrowers' next payday. Borrowers generally renew loans several times before paying them off, and the fees result in effective annual interest rates of 400% or more, a Defense Department study concluded. Congress approved the limits before adjournment this month. Bush signed it into law as part of a larger defense bill. Military officers pushed for the law, saying the loans saddled low-paid enlisted men and ..." Full Story

How To Avoid Payday Loans?

Although this article was published eight years ago, the advice it offered is still sound.

"The Consumer Federation of America offers these alternatives: - Make a realistic budget and build a nest egg of savings to avoid the need to borrow small sums to meet emergencies and unexpected expenses. Just $300 in a savings account would save payday loan borrowers the steep fees. - Shop for the lowest cost credit available from cash advances on credit cards, small loans from a credit union or a small loan company. Consider asking your employer for an advance or turning to friends or family when an emergency arises. Put in writing a good faith agreement to pay them back by a certain date. - Some community-based organizations may make small business loans to individuals. - Ask for more time to pay utility bills ..." Full Story

Alternatives To Payday Loans

There are other options. Consider the possibilities before choosing a payday loan: - When you need credit, shop carefully. Compare offers. Look for the credit offer with the lowest APR - consider a small loan from your credit union or small loan company, an advance on pay from your employer, or a loan from family or friends. A cash advance on a credit card also may be a possibility, but it may have a higher interest rate than your other sources of funds: find out the terms before you decide. Also, a local community-based organization may make small business loans to individuals. - Compare the APR and the finance charge (which includes loan fees, interest and other types of credit costs) of credit offers to ... Full Story

Payday Loans Are Costly Cash

Check cashers, finance companies and others are making small, short-term, high-rate loans that go by a variety of names: payday loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans. Usually, a borrower writes a personal check payable to the lender for the amount he or she wishes to borrow plus a fee. The company gives the borrower the amount of the check minus the fee. Fees charged for payday loans are usually a percentage of the face value of the check or a fee charged per amount borrowed - say, for every $50 or $100 loaned. And, if you extend or "roll-over" the loan - say for another two weeks - you will pay the fees for each extension ... Full Story