What You Need To Know About Payday Loans
Payday loans are high-interest, short-term loans requiring little more than a checking account and a steady source of paycheck cash. If you have ever wanted to get a fast loan without going through the hassle of applying for and getting accepted, payday loans are the way to go. Payday loans come in all shapes and sizes and there is no limit on how many you can apply for or take out. If the borrower isn’t able to pay back the loan on time, he can either renew or roll over the loan to a new date, or just bounce the check and pay the bank and other associated fees.
Unfortunately, the CFPB (Canterbury Companies Privacy Act)
has resulted in many payday loan providers shutting their doors due to the statutory requirement that all lenders are licensed and follow the same guidelines when it comes to determining who gets to access credit. The Canterbury Companies Privacy Act states that all lending companies must be licensed by the local office of the Ministry of Business, Innovation, and Trade (MBIT). According to MBIT, all lending services need to offer a similar level of service regardless of whether or not they are licensed. This includes all payday loans and all title loans.
Title loans, however, are exempt from the Canterbury Companies Privacy Act
Because these lending services use a “different” form of collateral, the Canterbury Companies Privacy Act deems them exempt even from the requirement that all lending services be licensed. However, this exemption does not extend to active-duty service members. Active-duty service members must still abide by the guidelines set forth by the MBIT. When an active-duty servicemember fails to meet these guidelines, the MBIT can revoke his or her license to provide a service.
Payday loans are generally best-known as “at-home” loans
since most borrowers utilize a personal computer or a laptop computer to access their loan proceeds. Online payday loans typically require borrowers to fill out online applications that give the lender access to their borrower’s banking information. Once the lender has access to the information, the applicant usually has up to sixty-two hours in which to complete the application and meet the pre-qualification requirements required by each state. When the lender completes the application, he or she sends it back to the applicant via email. Once approved, the applicant then completes the requested amount of funds directly from their bank account or debit card.
Payday loan facilities
are available through a wide range of sources. There are payday loan stores located in many shopping malls and the financial districts of many major cities. On the other hand, there are also payday loans brokers who operate online and can be reached through email or phone. The Internet is the easiest way for many borrowers to find the right loan facility that meets their borrowing needs.
One disadvantage of payday loans is the high interest rates
In fact, the rate of interest can sometimes be as high as twenty-five percent. As may be expected, if a person does not have a very good credit rating, this interest rate may prove prohibitive. However, many borrowers who are otherwise capable of paying a regular installment of a certain amount on time will find these high-interest rates too much to bear, and they will usually repay their payday loans more quickly than they would like to.