Payday LoanS
Payday Loan - Not as Simple as It Appears
Payday Loans are designed to be quick and easy. And they really are as quick and easy as any type of loan can get. But underneath the quick solution, there are complications. This doesn't necessarily make Payday Loans a bad thing, it just makes it something to approach with care and a clear understanding of what to expect.
The Importance of Responsible Borrowing
To get back to the point of how quick and easy it is to secure a Payday Loan, the overall design is aimed at speed, because people like getting money, and they like getting it right away. In other words, a payday loan can hit two birds with one stone. That’s on one hand.
On the other hand, one needs to look underneath the blanket to understand the details. If the process is as straightforward as it is being advertised everywhere, then why is the contract several pages in length? Of course, few people take the time to read the contract. They simply take home the money within a few hours. So, why bother with the fine print? As result, only a smaller percentage of borrowers are aware of the contract terms, keeping a cool head in emergency situations.
The recent studies show that the people learn about details, the more responsible approach they demonstrate when paying back the existing loan. There are many benefits in borrowing money responsibly. First, a responsible borrower with proper budgeting skills can avoid long-term debt traps. The other important aspect is that responsible borrowing can help avoid possible late fees and other unexpected Loan charges. Everybody knows that a quick loan is specifically designed to prevent individuals from doubting their decision. Therefore, before the papers are signed, please read the agreement and sign the paper only when you need the money to cover a temporary cash shortage. Being able to assess whether a loan is going to help is a big part of responsible borrowing. However responsible borrowing is also based on borrower’s loan commitments. It is important to pay back the entire amount plus the agreed fees. The failure to pay back on time may lead to delinquency as well as potential problems with a credit history. It can ruin their chances of getting more significant and substantial financing down the line, not considering the emotional distress that comes with running away from loan companies and avoiding all calls.
The Restriction and Regulation of Cash Advance (Payday) Loans
The requirements to qualify for Payday Loans are minimal. All that is needed is an address, a phone number, and a permanent income, which should be enough to cover the repayment at the next pay date. No credit check is necessary, and the money is received almost instantly.
But thanks to this quick process, some states are warier about payday loan companies, which is why they have certain restrictions in place to protect the consumer. For example:
- New York
- Arizona
- New Jersey
- Georgia
- Maryland
- Montana
- North Carolina
These are some of the states that either restrict or prohibit Payday Loans or any short-term Loans with over 36% interest rate. However, there are states that don't restrict high rates. These include:
- Utah
- Delaware
- Idaho
- Nevada
- North Dakota
Please remember that, regardless of state or federal regulations, the individuals should be responsible and knowledgeable when borrowing money.
