Another Attempt to Put a Cap on Payday Loan Interest Rates

Lawmakers are passing a bill as a second attempt to control the industry of payday lending. During the previous year, lobbyists and politics had a big role in creating legislations for the purpose of regulating an industry that is said to take advantage of vulnerable residents.

The sponsored act of Rep. Gordon Hintz, D Oshkosh entitled Predatory Lending Consumer Protection Act blocks auto title loans and sets limits to the loan amount. Specifically, the maximum amount must be at 35% of the gross monthly income. However, this act did not put the same cap of 36% to interest rates.
Spending huge amounts, lobbying lawmakers and contributing to campaigns were all done by the payday lending industry to fight the bill.

At present, two Republicans namely Rep. Evan Wynn, R-Whitewater, and Sen. Glenn Grothman, R-West Bend, are submitting a proposal to the legislature for a 36% limit to payday loan interest rates.
This new bill is also co-sponsored by Hintz. It was Wynn who sought information from Hintz and banking industries to work on the proposal. Wynn praised the work of Hintz and his colleagues in the previous session and blamed lobbyists for the failure of the interest rate cap proposal.

A Payday loan is a small amount, high interest loan with a short payment period. Typically, a payday loan is paid on the next paycheck of the borrower. The usual charge amounts to $20 for every $100 of loan. However, when the borrower fails to pay during the specified period, the debt is rolled over and the interest charges pile up.

The payday lending industry began in Wisconsin in 1995. Back then, interest rates were at 18 percent maximum. Eventually, 17 payday lenders emerged in the state. At present, there are about 550 of them.
According to Hintz, it is expected that the payday loan industry is preparing to prevent the bill on interest rate cap from becoming a law.

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Considerations Before Taking a Loan

Despite what analysts are saying that the economy is somehow improving, many Americans are still applying for a bad credit loan. This can either be an unsecured personal loan or a cash advance payday loan. Before taking out either of these two loans, always think about the interest rates and high fees that come with these loan types.

As summer 2011 begins, many economists are predicting for the improvement of the whole economy. This will result to higher interest rates and mortgage rates. To prepare for this, it is best to pay all debts with high interest rates before another increase happens. Without doing this, debts may become higher.

Bad credit unsecured loan requires a credit check and is usually charged with higher interest rates. The interest rates are most likely relative to the credit status of the borrower. Thus, the worse the credit background, the bigger chance of getting a higher interest rate. As an example, some lenders charge almost 20% for borrowers with very poor credit standing.

The other type of bad credit loan that does not require a credit check is the cash advance payday loan. The trade off for not having to go through a credit check is the payment of upfront fees. The average fee is from $15 to $35 for every $100 of loan. This may seem to be a small amount. However, when the loan amount is too high, the fees can easily add up to hundreds of dollars.

Regardless of the type of loan to take, always determine how to pay them. Applying and getting a loan without any idea how to come up with the payment may result to a bigger debt problem. Much worse, it can lead to a credit crisis that can turn one’s credit score from bad to worse.

What to Consider Before Taking an Unsecured Loan or Cash Advance Payday Loan

The huge drop to 8.8% of the unemployment rate has led many analysts to predict the improvement of the economy. However, they still see the challenge of many borrowers with bad credit rating in paying off their debts especially the interest rates it incurs.

The usual types of loan bad credit borrowers are applying for are unsecured loan and cash advance payday loans. Although these two loan types are the only options that bad credit borrowers can choose from, they realize that these loans cause their debts to pile up. Because of this, it is important to conduct a thorough research before deciding to obtain any of these two types of loans.

For unsecured personal loans, it is best to go through the credit check process to be able to determine the rate of interest of the intended loan amount. In terms of cash advance payday loans, even if credit check process can be avoided, consider the fees that go with it. The average amount of upfront fees is from $15 to $35. This estimated amount is charged for every $100 of the loan amount. These fees change depending on the lender and the state from which the borrower applies for a loan.

Before taking any of these two loans, prepare an exit plan. This means that the borrower must know how to exactly settle the loan. Without this preparation, the borrower will struggle in making monthly payments for an unsecured loan or fully paying a cash advance payday loan.

Bear in mind that cash advance payday loans have to be paid in full using the borrower’s next pay check. Without doing this, the fees will reset and the borrower will incur more and higher charges. When this happens, the interest and loan payment will increase. Consequently, it will add up to the list of the borrower’s debt.

Online Payday Loans Come with Many Benefits

Online Payday Loans Come with Many Benefits

The World Wide Web has created our lives much simpler in several ways. We can now shop in the capability of our houses, pay our bills online and keep in touch with friends and family members online. Yet another excellent benefit offered by online is the fact that we can apply for online payday loans from our home computers. Payday loans, or short-term financial loans, were first offered only by ‘brick and mortar’ financial institutions, which required that we had to go a banking institution, sit down with a loan company and discuss the reasons the loan was needed. Now we are able to submit an application for online payday loans from home anytime of the day or night, 7 days each week. The convenience of shopping for a loan from home is great and there simply is no easier way to borrow much-needed income.

The process for applying for payday loans online is extremely straightforward and easy to understand. With high approval rates and instant online decisions being made and no need to email or send paperwork in many instances, the money is simply deposited into your bank account shortly after your application. Typically you’ll be sent a loan settlement via e-mail, of which you will agree to, and therefore the funds will be transferred to your bank account. Quite often the lenders will make it simple to repay online payday loans. You are able to assume to be told that the repayment will be debited from your debit card on your next pay day advance or on the agreed upon payment date.

These loans are perfect in the event you need money rapidly and if you are sure you can pay off the loan on your next payday. You can use these online loans for paying ‘final demand’ or emergency payments, medical or dental treatment, school fees, vehicle repairs and a whole lot more. It isn’t generally suggested to use these loans for impulse shopping or for times when you feel like splurging on items that you don’t actually need.

The downside to online cash advances is the high interest rate charged. On average, you can expect to pay 25% interest on loans, which means if you borrow $100, you will need to pay off $125. If you’re thinking that the interest rate is high, you are right. Given that no credit checks are performed, these loan companies are taking a large risk knowing that numerous borrowers will not have the ability to repay the loans.

On the other hand, one of the main benefits of on-line payday cash loans is the reality that they need no form of security like a car or a house, which makes them safer than secured loans. Applying for a secured loan is much riskier, especially in these unsure times. In the event you were to lose your job for instance, you might also end up losing your car or your house if you ended up defaulting on that loan. With online payday loans, you’re given the confidence of knowing they are short-term and far less uncertain.

How to Apply for Online Payday Loans Even with Poor Credit

How to Apply for Online Payday Loans Even with Poor Credit

Getting a payday loan online would be the easiest and most convenient method to get a cash advance fast. Top rated payday lenders can give the lowest interest rates and versatile pay-off terms (around 120 days!) without any credit report checks or faxing of documents.

Many people are apprehensive about their poor credit whenever they apply for a loan. But the truth is your credit score has absolutely no sway on the credit choice when it comes to payday loans. A lot of people who apply for this kind of personal loans, have less than perfect credit score which explains why loan companies have to add a high risk premium to the interest rate on the loan. Because of these high risk quality, payday loan lenders happen to be regulated and even outlawed in some states.

In many instances, you can qualify for a loan around $1,500 in funds if your bank account is in good position. And the perfect part is that you will not need to pay it back in two weeks: you are able to select a long-term loan and repay it in several small installment payments. Today, you will find companies with massive online lender networks specializing in installment payday loans for people with bad credit.

Another important aspect has to do with the application process itself. Due to diverse state rules and borrower’s profiles, there’s no such thing as the best payday loan provider for everybody. Some people may get great rates and loans and other people get refused by the same lender. Some people are instantly approved with out any supporting documents and others have to fax a pay stub for employment verification, again, required by some states. So, your best bet would be to apply to several top loan providers and go with the loan that fits your scenario best.

How quick can you get your money?

The majority of online financial institutions are set at the Money Overnight method, so you’ll be able to receive your money next business day given that you apply just before 4 p.m., EST. The money is usually wired via direct down payment to your checking or savings account.

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