Payday Loans Are They a Ripoff

If you can not access to credit and loans need fast, you can follow for a payday loan. The idea sounds appealing: the lender to deposit $ 2000 in your bank account and credit automatically repaid from your next salary. You need no collateral and no credit check.But before going to the office loan, do your homework. Here are some key facts you need know.1. What is a payday loan? According to the U.S. government loan, payday loan a "closed, consumer unsecured personal interest defined, excluding any credit card transaction, according to a consumer credit indefinitely, with a maturity of 91 days or less, where the amount to finance up to $ 2,000 with an interest rate of no more than an APR of 36%.

"In other words, short-term, high interest.To guarantee, the lender may require, payday loans, a check for the full amount plus the fees paid, or is in a legal access to your bank account for the total amount owed. The check is dated for the next payday. On this day,, payday loans, the lender will cash, payday loans, checks or debit card, will your bank account. This gives the lender an automatic mechanism for recovery and the legal right,, payday loans, payday loans, collect.

2. Payday loans are legal in the world? No! They are regulated by individual states. Illegal.They Some states are also illegal for members of the U.S. military. made a provision of military law is prohibited by the 2007 Act to permit lenders payday and / or car loans as military personnel. Lenders are also prohibited from charging more than 36% of interest owed military. In calculating the interest rate, additional taxes, fees, insurance premiums or, payday loans, credit card must included.

3. What are the interest rates for this type of loan? Very high! Why? Since the lender usually requires only to have a job and a bank account in the past sixty days. The loans are usually the people who have bad credit and no collateral. These types of high-risk, payday loans, borrowers of interest can, as high as 600% APR.What say? It is a composition typical payday loan: Loan amount: $ 1500, payday loans, Your Next Payday: 14 days for every $ 100 borrowed from todayFee: $ 20your effective April: 521.

43% Total billed: $ 300Total debited your account 14 days from today: $ 1,800 Two weeks after moving the $ 1,500 loan, the lender will deduct $ 1,800 of them. If for some reason the amount is not there, you must still pay the fee of $ 300 for this period of fourteen days, payday loans,, payday loans, . You pay $ 300 every two weeks to pay the original $ 1,500. When your next salary will receive 14 days later, she has $ 1,800. This means that, payday loans, if you forget your amortization period first, you end up paying a total of $ 2100.

4. Payday loans are controversial? Yes! In many states are considered usury and illegal. But attempts to regulate the payday loans was more controversial. Congress is considering the payday loan reform act of 2009 (HR 1214 IH). This law apparently regulate payday loans, but consumer groups are opposed. request in a letter to U.S. Representative Luis Gutierrez, the sponsor of the bill, several groups, including the National Consumer Law Center, that human resources is the 1214 congressional authorization for loans single payment at the rate of 780 percent effective interest for a week or 390 per cent effective interest rate for two weeks.

The limit hiring of fifteen cents for every dollar borrowed seems reasonable, but it allows creditors to $ 75 for a typical loan of $ 500, the next pay day because of the free. For the average customer, it takes nine loans per year, allows providers to HR 1214 to, payday loans, collect $ 675 cost of financing a loan of $ 500 is taken from an eighteen weeks.Imagine pay more than the financial, payday loans, costs of the loan amount ! Before considering a payday loan, exploration and wonder if really the best choice for you.