Know the payday loan laws and save money

The recent years have witnessed a skyrocketing number of payday loan lenders; the reason being the profitable return rate on short term loans. The high ROI has prompted many companies to cash in on the idea of payday lending. However, the rapid growth of payday lenders has also instigated unfair practices. To combat the illegitimate payday loan lending, Congress has enforced laws. But sadly, most of the consumers are not aware of the fact that majority of states have laws regulating payday loan.

If you’re one of those customers who is unaware about the state laws limiting personal loan practices, then be careful! Each state has a law that regulates and limits the maximum advance amount, the amount is usually between $100 and $500. But there are lenders who offer payday loans or short-term personal loans by charging the cash advance fees well over the state limit.

Prior to payday loans laws, people who were in tough situations or were suffering from were getting hit with enormous amounts in fees. Sometimes as much as 800 percent annual interest! Presently most of the states have put on a limitation on the interest rate that can be charged and the lenders are coerced to abide by it. They are by no means can charge triple digit rates to financially challenged consumers.

Thus, if you aware of the payday loans laws of your state you’ll pay what you’re supposed to and no one can take advantage of your vulnerable financial condition.



By - Brandy