Why Payday Loans Should Be Illegal

Should Payday Loans Be Prohibited?

Payday loans can be terrible. Pew’s latest research has shown that the following are true: Average payday loan borrower in two weeks, you will have to repay $400 but can only afford $50. What next? The continuous cycle of debt and additional $500 monthly fees.

Only 14% of borrowers can pay off their loans with their monthly budget.

Why do people use payday loans?

Payday loans are not beneficial for the borrower, so why would anyone use them?

These are the most common categories for payday loan borrowers:

  1. They are deep in debt and at the most desperate/darkest hour of their lives (i.e., debt, drugs, danger)
  2. They were either tricked or didn’t receive the marketing messages/sales offered to them and didn’t realize how bad it was.

Payday lenders are notorious for making misleading statements like “The cost to borrow loans is only $20 per $100 borrowed!”

They don’t tell you about the $20 fee they charge every two weeks. The average APR is around 20% APR on payday loans. You will pay more than $4 per dollar borrowed if you average 400%.

Who would not be open to this offer if they weren’t being deceived or if they were in a positive mindset?

This site has been removed from advertisers who claim to be payday lenders. It is a predatory model.

Should payday loans be prohibited?

The question is: “Should payday lending be allowed when it isn’t beneficial?” Or should we ban payday loans altogether?

With annual revenues of $7.4 Billion, payday lending is a large business. It is a thriving business with a strong lobby; it was a huge success, and the hall continues to maintain it.

Payday loans can be used in emergencies. Payday loans are a tool that can be used for emergencies. This could come in the form of additional cash flow for people who urgently need payday loan money.

  • Reduce your expenses
  • Increase your income
  • Selling stuff, you don’t need
  • Shelter food
  • Ask the business you owe money to if they can put you on a long-term payment plan
  • Consolidate your debt
  • debt negotiation
  • Rehab for drug addiction
  • Borrow money from your loved ones and pay them modest interest
  • Donating marrow

Street panhandling is even more enjoyable.

Are payday loans good for America? Are some people benefiting from it, but the majority of Americans are being hurt by higher debt levels?

All taxpayers pay the bill for assistance needed by those who have fallen on hard economic times.

In 13 states, payday lenders are already illegal.

 

Tags

district of columbia
north carolina
states and the district
capping interest
state law
finance charge
financial services
high cost loans
debt traps
final rule
reposible lending
credit cards
annual interest
36 percent
overdraft fees
rates at 36

 

Author: Alex Darwin

Alex is a former budget manager turned entrepreneur. He works mainly at home on his credit score advice website and writes a financial blog on the side. He hopes to expand his business into a full online lending company for bad credit as soon as he gets enough investors.