All About Payday Loan Cash Advances

Need a few bucks ‘til payday? You finally snagged that hot date you’ve been trying to get for months now, and your wallet’s on a crash diet? Just drop by your neighborhood Hold-a-Check and your worries are over. It’s so easy, takes just a few minutes of your time, and you don’t have to pay it until your next payday. No credit check, no multi-page forms, just bring your drivers license, a pay stub or two, proof of your address, and of course, your check book. Never mind that your account balance resembles the price sticker on a package of Bic pens at your local dollar store. It will all be taken care of in a week or two, right?

If this sounds somewhat familiar, you certainly aren’t alone. Thousands of working people and those on fixed incomes use the services of payday loan companies every day. Many of these people are steady customers, some taking out a new advance right after paying the preceding one. Many consumer groups contend that these are the folks that are targeted and coveted by the cash advance companies.

Generally, a customer writes a check for the amount they receive, plus the fee for the lender, a fee that amounts to interest rates as high as 911% for a one week loan, 456% for a two week loan, and 212% for a one month loan. (Consumers Union, publisher of Consumer Reports; www.consumersunion.org). For many people who find themselves in financial trouble, these companies can be their only means to help. So many people don’t or can’t have bank accounts, have negative credit reports, or are among the working poor, and have few options when faced with money shortages. Those with checking accounts often feel they have no choice but to go to a payday lender. Those without checking accounts end up using pawn shops and title loan companies. Many companies do payday advances as well as title loans.

Payday loan companies can be found in communities all across the country. They seem to be found in low income areas and close proximity to military complexes. The rules and fees for these services vary greatly from jurisdiction to jurisdiction, and in some areas are apparently free of much regulation at all. The problems that are often caused by dependence on these companies have caught the attention on many state and federal government entities and particularly the United States military. Some states have enacted limits on the amount they can charge, and the collection tactics they can use. Others are studying the problems and some have legislation pending. One wonders what kind of control any authority could impose on those lenders who use the internet as their primary source of business.

There are arguments on both sides of the issue of payday lending, but is factual that these lenders do provide a necessary service for many people, many of them have initiated fairer fee structures, and know that they are increasingly being watched. On the other hand, many practice predatory lending, unfair and possibly illegal collection methods, and continually fight attempts to place restrictions on their business practices.