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Free Payday Loans is Everyone’s Take

What’s all that big talk about the sky-rocketing interest rates of the payday loans? There some states and some companies in the US which are giving you free payday loan, if you are taking it for the first time. And, this is not unreal or fake. There is nothing fishy about it as well. The companies are neither charlatan nor sharks. They are quite reputed in their states. And, they are out there to help you. If you are struck with the medical bills, telephone bills, electricity bills or other such small expenditures and there is still some time for the salary to figure in your account, then you have to look for temporary monetary help. Friends could be your preference no 1, but you may not wish to disclose your plight to them. Further, there are chances that the finance is not readily available with them to meet your instant requirements.

That leaves you with no option but to seek cash advance loans from the payday loan stores. And if the first one is for free, with no or minimum conditions attached, there cannot be a better deal. The free loans are usually given only for less than the payday time, say expiry of 15 days or the pay date, whichever is earlier. And, you would be greatly mistaken to think whether these companies have fallen on bad days? They are very much ticking and prospering. They have done their homework well and have taken a calculated risk in giving you these freebies. They are working on probabilities or chances of your defaulting to make the payment on due date. And, their stats cannot be wrong since many have got into the payday loans debt trap and burnt their fingers. The stats are overwhelmingly in the payday loan stores’ favor. So, this new way of enticing you to take the ‘free’ bite and savior it for 15 odd days.

You default by a day and the price is paid. Interest rates will shoot through the roof and the dream- loan will become a stingy-surprise. Be sensible. Take the bite only when you are 200% sure of repaying the same within the due date. Another important thing to think is that what rates will be applicable to you for the next time you approach for the second payday loans. Will it try to make over for the loss, or endure it?

 

Rate Cap At 36% on Arizona Payday Loan Stores Puts a Lid on their Operations

If you do not fancy asking your friends about some amount of money to ward off some unforeseen financial exigencies, then the only hope is the payday loans. These high interest and small amount loans are best suited to provide you the much needed respite for meeting immediate money needs. With growing criticism for their tendency to push the people into a never ending debt spiral, the Arizona State of US has moved legislation capping the annual rate of interest at 36 percent.

This measure has prompted many payday loan stores to seriously consider closing their shops. They used to charge nearly ten times the current cap rate applied by the government. The stores contend that this is a huge reduction and an indirect way of pushing them out of this business. High operating costs, greater risks of default and many other considerations which made these stores charge higher amounts will simply result in innumerable losses, not to mention profitability. Some analysts believe that it will have immense repercussions.

For one, a natural question is: from where will the people meet their instant cash requirements since the banks do not lend small amounts and other lending options take too much time. This will create a big need gap. Secondly, if the payday loan stores do not shut down, they will certainly consider changing their business fundamentals. More strict credit checks will be conducted leading to more cases of rejection. But this will result in the needy people being not getting the due benefits. The stores may begin to charge some fees upfront to cover for some their risk. They might also start giving the loans for more than one pay period. This will enable them to earn more interest. Despite all these available options, there is no denying the fact that the profitability will be hit for sure.

People who support the decision of the government argue that since the payday lending is there, people are hesitant to look into other ways of making those extra small amounts. They contend that the cash advance loan companies have created this misconception that they are the best avenues for meeting their instant cash requirements. They believe the people are being misled by the advertisements that they are lenders of last resort and are preventing the people from being more responsible. Only time will tell what have been the real ramifications of this government decision.