It’s the middle of the month and you can’t pay the electric bill. You can’t pay it. You’re short. We’ve all been there. What are your options?
Try a Payday Advance
The process is simple. The bank provides a short, unsecured loan to the borrower. The borrower must provide a verification of employment (pay stubs, bank statements, etc.) during the loan process. And finally, the loan must be repaid on the borrower’s next pay day.
In the retail market, borrowers who need a small loan to pay a bill – usually have the dire circumstances – visit a payday lending store for a cash loan. Payday advances are also known as payday loans. The borrower is obliged to write a post-dated check in the amount of the loan plus fees and return to the store to pay the loan in full. In cases where the borrower fails to repay the loan, the payday lending store will cash the post-dated check.
Applying online for a payday loan is straightforward. Potential borrowers can easily apply online through the site link or via fax. Here are some general steps to this loan process:
- Check each bank or financial institution’s sites for specific details.
- Complete an online application.
- The payday loan is deposited to the borrower’s bank account.
- On the borrower’s payday, the loan amount and any associated fees are charged to the borrower’s account.
For more information on how to get a payday advance loans, visit Consumer Federation of America’s PayDay Loan Consumer Information site.
Payday Advance Loans by State
Payday advance loans are legal in 33 states. According to data from the Consumer Federation of America, Georgia, New York, New Jersey, and Arkansas effectively ban payday advance loans by legal means. Five states – Maine, Oregon, New Hampshire, Ohio, and Montana – allow payday loans in the form of postdated checks, but at a lower interest rate than standard payday loan rates.
According to the Consumer Federation of America, eight states and the District of Columbia restrict payday lending through caps in interest rate related to APR or annual percentage rate. The eight states are: Arizona, Connecticut, Maryland, Massachusetts, North Carolina, Pennsylvania, Vermont, and West Virginia.
Payday Loans by Nation
In Canada, payday advance loans are limited by usury law. Since 2006, the provinces now regulate payday loans following legislation through Canada’s parliament. All payday lenders operating in British Columbia must be licensed by the Consumer Protection of British Columbia.
In a 2010 report, Britain’s Office of Fair trading recommended introducing legislation to aid consumers in making informed decisions. While interest rates vary, the British government has called for a maximum limit for interest rates. Any company offering credit to consumers must have a consumer credit license from the Office of Fair Trading.
Britain’s Credit Action reported on the prevalence of ads for payday advance loans on Facebook. Due to U.K.’s strict laws on advertising for credit, the Facebook ads for payday loan lenders are in violation of British law. Any ads – print and television – or websites for consumer credit must feature the full name of the lender.
Credit Action asserts that lenders must show the typical APR or annual percentage rate in ads. In cases where the ad includes phrases like “poor credit history,” “low credit rating,” or “refused credit,” the APR must be shown. In addition, if the ad compares the terms of one lender to another, or offers incentives to encourage people to apply for credit, or shows typical APR prominently in the ad or on the site, the APR must be prominently displayed on the site, rather than hiding it. The typesize of the annual percentage rate must be at 1.5 times larger than the typesize of other information, including comparisons, incentives, references to poor credit, etc.
Australia’s Ministry for Financial Services announced a reform to include a national cap on short-term contracts offered by payday lenders for loans for $2,000 or less. If legislation passes, lenders may only charge up to 10 percent of the amount borrowed.
The reform will change the National Consumer Credit Protection Act of 2009. Proposed legislation will prohibit any refinancing on small contracts. Lenders of payday advance loans and other short-term loans must disclose to consumers the availability of other options. Payday loan stores must inform consumers about options while Internet-only sites must provide a link to the ASIC site.
Australia’s Consumer Action Law Centre proposed a natural interest-rate cap for consumer credit at 48% APR. The number of lenders of short-term loans has increased by almost 10 times since 2002. In Australia, loans with an APR of 400% are commonplace, hence the action of the Consumer Law Centre.
Do you want need a payday advance loan? Apply for a payday loan: