Always do your research when searching for the best payday loan options. As with any industry there are companies to trust and companies to avoid. When researching your best options for payday loans or cash advances keep an eye on the news. Recently a payday loan company in Massachusetts has been barred.
BOSTON — Online payday lender barred from Mass.
BOSTON – An online payday lender accused of charging excessive rates has been blocked from doing business in this state as part of a settlement with Attorney General Martha Coakley’s office. Rio Rancho, N.M.-based FastBucks also will repay $35,000 in fees and interest to consumers and $10,000 to the state as part of the settlement. Coakley accused FastBucks of charging unfair interest rates on its loans that sometimes exceeded 600 percent. When consumers were unable to repay the loan principal and interest, FastBucks extended the loans and tacked on additional fees. A spokeswoman for Coakley’s office said at least 20 Massachusetts consumers have been identified as doing business with FastBucks.
http://www.wickedlocal.com/mansfield/newsnow/x43860602/BUSINESS-IN-BRIEF-Online-payday-lender-is-barred-from-Massachusetts
A new bill introduced by Bill Dodd might have ramifications for those of you in the market for a payday loan. Remember to always to keep yourself informed.
Dodd says his new consumer-protection provisions are designed to prevent abusive lending — but he’s got a record of missing his target on this issue. His credit-card bill, signed into law last year, has both reduced the availability of credit and increased its cost.
Reductions in credit directly result in declines in job creation. We know, for instance, that the two most common sources of funds for starting businesses are home-equity and credit-card debt. The bursting of the housing bubble largely eliminated the first option; now Washington is trying its best to kill the second.
Dodd’s proposed “consumer protections” would reach beyond credit cards and restrict the availability of all forms of credit, while raising costs.
The bill would expand the depth and scope of federal financial regulation, raising both regulatory and litigation costs that are ultimately passed on to the consumer. Dodd gives his proposed bureau almost unlimited authority to decide which products and services it can regulate.
The increased cost of offering products to higher-risk borrowers would likely result in many of those products being eliminated from the marketplace, reducing credit for the very individuals who need it the most.
George Mason University Professor Joshua Wright estimates that the Dodd bill’s credit restrictions would reduce job creation by 4.3 percent — about 60,000 fewer jobs every year.
Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/dodd_jobs_killer_YiIK9mow10vcdfvdaMq1PL#ixzz0lcTPKYJR
A payday loan (which can also referred to as a paycheck advance or payday advance) is a short-term, small to medium size loan whose purpose is to cover a borrower’s expenses until his or her next payday. These types of payday loans are also referred to as cash advances, though that description can also refer to cash provided against a previously arranged line of credit such as a credit card. There is legislation regarding payday loans which varies widely between different countries and, within the USA, between different states.
Borrowers generally visit a payday lending store to secure a small cash loan, most times payment is due in full before the borrower’s next paycheck (usually this falls a two week time frame). In the United States, the typical finance charges on payday loans are in the range of 15 to 30 percent of the loan amount for the two-week period, in other words this translates to rates ranging from 390 percent to 780 percent when expressed as an annual percentage rate (APR), something that need to be kept in mind by the borrower. As collateral the borrower usually writes a postdated check to the lender in the full amount of the loan plus fees. Then on the maturity date, the borrower is supposed to return to the store to repay the loan in person. If for some reason the borrower doesn’t repay the loan in person, the lender will process the check via their bank or through electronic withdrawal from the borrower’s checking account.
If for some reason the account is short on funds to cover the check, the borrower may now face a bounced check fee from their bank in addition to the costs of the loan, and the loan may incur additional charges and/or an increased interest rate as a consequence of the failure to pay. For those customers who cannot manage to pay back the loan when due, members of the national trade association are required to offer an extended payment plan at no additional cost. In some states like Washington, extended payment plans are required by state law.
As is the norm with many loan application payday lenders will need the borrower to bring one or more recent pay documents in order to prove that they have a steady and ongoing source of income. The borrower is generally also required to provide recent bank statements as proof of financial status. Each individual lending insitution has their own underwriting criteria.
