Home - Mortgage Loans | Personal Loans | Bad Debt Loans | Foreclosure Loans
Apply for a Loan | Best Auto Loans | Best Bad Credit Auto Loans | Best Bad Credit Loans | Best Bill Consolidation Loans | Best Cash Advance Loans | Best Credit Cards | Best Credit Repair Tips | Best Debt Consolidation Loans | Best Free Credit Reporting Tips | Best Home Equity Loans | Best Mortgage Loans | Best Pay Day Loans | Best Personal Loans | Best Products on the Internet | Best Unsecured Loans
Great Financial Advice
Apply for a Loan
Latest Financial News
Rate Lock Advisory
Best Products
Join Our Mailing List
Contact Us
Loan Articles Index
Auto Loans
Bad Credit Auto Loans
Bad Credit Loans
Bill Consolidation Loans
Cash Advance Loans
Credit Cards
Credit Repair Tips
Debt Consolidation Loans
Debt Reduction Loans
Foreclosure Loans
Free Credit Reporting Tips
High Risk Loans
Home Equity Loans
Home Loans
Lawsuit Loans
Mortgage Loans
Pay Day Loans
Personal Loans
Products on the Internet
Real Estate Services
UK loans
Unsecured Loans
Loan Article Index
Loan Articles A-G
Loan Articles H-Q
Loan Articles R-Z
Mortgage Calculators
Mortgage Calculator
Mortgage Amortization Calculator
Rent vs. Buy Calculator
How Much Can I Afford Calculator
Auto Payment Calculator
Click here to Sign up for Email and Newsletter


redhotloantips fat loss

Payday Loans - Legal Loan Sharking?

Written by: Joe Spalding

Each day, in cities across America, people go to payday loan companies, seeking a temporary escape from their financial problems. But that quick fix comes with a hefty pricetag attached--interest rates that can run 400 percent or more on a two-week loan. The fees on such loans, in fact, can become so huge that they rival monthly rent bills.

Supporters of the payday loan industry say that such shops are simply providing a public service, and that there's great demand for emergency loans in today's economy. They also point out that borrowers are not coerced into obtaining loans, that people apply for the money knowing the costs involved.

However, there's a growing body of evidence to suggest that payday loan companies target the working poor, minorities, and military families. In other words, these lenders are accused of preying upon some of the most vulnerable members of society, the kind of people who don't have a financial safety net to fall back on.

For instance, the head of the consumer protection group known as WashPIRG in Washington state has stated that the aim of the industry is to take advantage of a certain group of targeted people. WashPIRG further states that payday loan guidelines can be confusing, causing borrowers to become caught in a web of debt. Moreover, payday loan operations are often largely unregulated, since they may be exempted from state usury laws, which place limits on the amount of interest lenders can charge customers.

And payday loan outlets tend to be located in areas where they will attract the most traffic from people who may be least able to afford their services. For instance, in Washington state, more than 36 payday loan stores are situated within three miles of the Fort Lewis/McChord Air Force Base. Also, the lenders tend to locate in areas with a high percentage of black residents. Black areas might have as many as twice as many payday outlets as white neighborhoods. This is true, not only in South Seattle and other areas of Washington state, but also in Illinois and Louisiana, where payday loan operations tend to set up shop in minority and impoverished areas in Chicago and New Orleans.

As you might expect, the payday loan industry sharply denies that it targets blacks and the poor. In fact, the industry's spokespeople claim that their shops serve the middle class. For instance, one lender, Moneytree, contends that stores are positioned to be near banks and retail outlets and that demographics don't enter into the equation. And the industry points to statistics which indicate that borrowers earn, on average, $25,000 to $50,000 each year.

However, the Consumer Federation of America sharply disagrees. The consumer advocacy group maintains that payday loan stores cater to low-income people who hold jobs. While they may have a checking account and a regular paycheck, these wage-earners often have little in the way of savings. As a result, they are prime targets for emergency cash loans. And, once they become payday loan customers, they can find it difficult to break free of the debt spiral.

In their defense, representatives of the payday loan industry say that they discourage irresponsible borrowing. They also maintain that they are willing to create payment plans for those who have difficulty repaying their loans. And, in some cases, borrowers can pay back loans within a day without incurring any charges. Spokespeople for payday loan companies note that borrowers know about interest rates ahead of time and the requirements of the loan are fully disclosed.

However, there can be little argument that, once people take out a payday loan, the chances are great that they will be return customers. About 25 percent of payday loan clients used the service anywhere between 10 and 19 times a year--a statistic which emerged from a survey by Washington state's Department of Financial Institutions.

For someone who takes out a loan of $300, the fees can run as high as $600--an amount consumer activist groups label as excessive. And the problem may be growing. More than 20,000 payday loan shops operate across the nation. In some areas, borrowing for payday loans has doubled in the course of a single year. In fact, in some states, payday loans are now a billion dollar industry.

Despite the protests from payday lenders, it appears that the working poor and minorities are suffering as a result of payday loan practices. Without significant personal financial reserves, these people are easily lured into payday loan shops, with their promises of fast, convenient emergency loans. However, they can quickly find themselves mired in larger and larger mountains of debt--a cycle of borrowing which can be difficult to break. At times, the debt can be so great that borrowers contemplate bankruptcy. Therefore, payday loans can be seen as an obstacle in preventing the working poor from moving up the economic ladder.

About the author:

To learn more about the Payday Loan industry visit my site at http://www.onlinenofaxpaydayloans.com

Other Related Articles:

Warning: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected the timezone 'UTC' for now, but please set date.timezone to select your timezone. in /home/rliu008/public_html/redhotloantips.com/rotator.php on line 7

Warning: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected the timezone 'UTC' for now, but please set date.timezone to select your timezone. in /home/rliu008/public_html/redhotloantips.com/rotator.php on line 7
Secured business loans – equipping your business blue print with concrete groundwork
Somebody once said, ‘Business is not financial science; it's about trading, buying and selling. It's about creating a product or service so good that people will pay for it.’ So you are full of ideas and ready to take on the world. No matter how...read more

Crossing the Gap from this Home to the Next: Bridge Loan
So you're thinking of getting into a bigger house. You call up the real estate agent and make an appointment to go see what the market has to offer. Then you find it, the perfect "move-up" home. It's everything you've ever wanted in a...read more

Home Loans and Mortgages – Beware of New “Mortgage Elimination” Scam
The booming real estate market has allowed many Americans to become “equity rich.” They may not have a lot of cash on hand, but they might have equity in their homes worth several hundred thousand dollars or more. Unfortunately, this increase in...read more

Return to Home


Best Auto Loans, Best Bad Credit Auto Loans, Best Bad Credit Loans, Best Bill Consolidation Loans, Best Cash Advance Loans, Best Credit Cards, Best Credit Repair Tips, Best Debt Consolidation Loans, Best Debt Reduction Loans, Best Foreclosure Loans, Best Free Credit Reporting Tips, Best High Risk Loans, Best Home Equity Loans, Best Home Loans, Best Lawsuit Loans, Best Mortgage Loans, Best Pay Day Loans, Best Personal Loans, Best Products on the Internet, Best Real Estate Services, Best UK loans, Best Unsecured Loans
Subscribe to Mailing List | Private Policy | Unsubscribe | Site Map