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Some Facts About Payday Loans

Posted on June 3, 2008
Filed Under Business, Society |

Before even jumping into something, say signing up for a service, one has to learn some things about something. To cut the long story short, let us try to define first what a payday loan is. Payday loan (also called a paycheck advance or payday advance) is a small, short-term loan that is intended to cover a borrower’s expenses until his or her next payday. Typical loans are between $100 and $500 and are due in two weeks, with interest rates of up to 400% APR. On a two-week loan, fees average $15 for each $100 lent. The loans are also sometimes referred to as cash advances, though that term can also refer to cash provided against a prearranged line of credit such as a credit card.

It is always good to know about the product or service in which you are signing up for. Payeveryone.net has come up with a short list of a few facts that can help with your future pay day loan endeavors.

  1. Pay day loans are often called by other names such as cash advances or deferred deposit loans.
  2. Pay day loans are meant for short term use only and are not intended for long drawn out payments.
  3. Pay day loans can save your financial status if you happen to be in a money emergency.

According to the Enquirer.net, in Ohio, the Ohio Senate passed legislation Wednesday that would cap payday loans, drastically reducing annual interest rates that typically exceed 300 percent.The Senate voted 29-4 to pass House Bill 545, which passed the House two weeks ago and would cap annual interest rates on payday loans at 28 percent.

Gov. Ted Strickland is expected to sign the bill later this month, giving Ohio one of the strongest payday lending consumer protection laws in the nation.

“This is one of the greatest days in recent years for Ohio consumers,” said Tom Allio, chairman of the Ohio Coalition for Responsible Lending, an early proponent of payday lending reform. “Our coalition has worked three hard years, and we finally find ourselves on the doorsteps of a bill-signing ceremony at the Statehouse.”

Opponents of the bill, including Mason-based payday lender Check ‘n Go, say 6,000 workers at payday lending shops will lose their jobs if the bill becomes law.

So, if you are in need of a cheap payday loan, study the laws in your location and the terms and conditions of the company you are filing your application to.

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