Repair Your Credit | Payday Loan Truth vs. Fiction (Pt. 1)

By Steven Tarlow, your repair your credit news source

Facts and Fallacies of Payday Loans

Last time, we took a look at some of the advantages online payday loans have when you’re on the road to “Repair Your Credit.” Now let’s examine some of the truth and fiction that’s out there about the industry, so that you have more information to use when making decisions about how you’ll manage your short-term finances to rebuild and maximize your credit rating.

Currently, there are more than 11 states that have passed laws which have banned payday loan businesses from operating. The reason for this is largely based upon the fact that banks and credit unions take a rather monopolistic view of free competition.

In this case, payday lenders presented competition in the short-term consumer lending market, so banks managed to convince politicians through campaign contributions (and the promise of more to come) that they should regulate these cash advance lenders out of business. Numerous other states have capped or are considering putting caps on interest rates. Some of this is necessary to ensure that consumers are protected from those lenders who buck industry regulation and charge excessive rates, but for the most part, this damages the ability of honest lenders to operate. That in turn costs people their jobs.

Facing difficulties

Take Ohio as an example. They have capped short term loan APR rates at 28 percent. That dropped revenue at brick and mortar locations per $100 loaned from the standard $15 to $25 to a mere $1.08. Needless to say, this forced many to close their doors. Some have proven able to adapt their business plan, but regulators remain at their throats.

Wisconsin does not have laws against the payday loan industry, and the industry has remained in popular demand.

There is a media-created image of cash advance loan companies as monsters that target minorities and the poor. It’s all too easy for one business to label another in this way. Of course a business is looking to make a profit. It’s how the economy works. However, as we’ll see, there is no concrete evidence that these groups are targeted. The target for payday loans is people who need short-term cash. Mystery solved!

Payday Lenders Trap Borrowers in a “Cycle of Debt”

Many claim that payday loans trap consumers in a revolving cycle of debt. They blame the industry for faulty lending practices that ruin one consumer after another. Want to see how ridiculous that claim is? READ ON!

Previous Article

« Online Petition Aims to Stop Payday Loan Legislation

A group of pawnshop owners, payday lenders, their customers and their employees have joined forces online to try to stop Senate Bill 500. READ MORE ... shop
Next Article

GM Recall Affects 1.5 Million Vehicles | Oil Leak Could Cause Fire »

General Motors is recalling cars because of an oil leak that could start an engine fire. GM says it will replace the defective part for free. READ MORE ... Chevrolet Lumina

Enter your email address:

Email Delivery by FeedBurner

Discussion of Repair Your Credit | Payday Loan Truth vs. Fiction (Pt. 1)

This post has one comment

  1. Lroy Mann says:

    nice web information

    thank you

Trackbacks / Pingbacks

Comments are closed.

Other recent posts by Steven Tarlow

Payomatic: New York community financial services company

New York's largest check cashing chain, Payomatic strives to connect consumers with the financial services they need in their communities...
The home page of Payomatic.com, where clean design makes it easy to find what you're looking for. A smiling woman holding a prepaid VISA card invites New York customers to try out the financial services Payomatic has to offer.

Tiger sexting Joslyn James: Now a money-making venture!

Is Sexting Joslyn James a real way to get Tiger to apologize – again – or is it yet another money-making venture for a spurned mistress?
Former porn star Joslyn James, founder of the scandalous Tiger Woods text message Web site www.sextingjoslynjames.com, in sunglasses and a hot pink top.

Sandra Bullock, Jesse James split rumors ablaze

Rumors of a Sandra Bullock – Jesse James split are spreading like wildfire. Will Michelle "Bombshell" McGee bring down their relationship?
Sandra Bullock