What is a Faxless Payday Loan?

A payday loan is a short-term loan to cover your spending needs. It is secured against your future paycheck. These loans have grown in popularity for years, and now this is the main tool of assistance to get you out of that sticky situation or get you that new luxury toy.

Your transaction information is completely private. What you provide to us stays with us! No one will ever know you took out a loan.

Payday Loan Reforms in Law

In the past several years, the amount of payday loan lenders has sky rocketed. More payday loan lenders have developed because of the profitable return rate on their short term loans. Since the service is so convenient, many companies have cashed in on the idea of payday lending. However, the rapid growth in lenders has caused Congress to enforce laws to prevent payday loan companies from taking advantage of their vulnerable customers.

First, the government pushed for states to put caps on interest rates. However, several states deregulated the caps in fear of lenders moving out of state. Although the caps seemed beneficial to consumers, many lending companies were including hidden fees into the loans. This caused a reform, which balanced Congress’ intervention and state governments push for deregulation.

Each state falls within one of the three categories of loan regulation. The first category ensures that all payday lenders follow the state’s small loan laws. Usually, under these laws the interest cap is set low-usually less than 36%. Also, these laws regulate lengths of the loans, along with prohibiting contract revisions by the lenders. This category of payday lending makes it virtually impossible for companies issuing payday loans to make profit. It is a way for states to force payday lenders to be fair to their customers.

The second category includes the states that allow lenders and consumers to agree on any interest amount. Each lender can modify their interest rates as long as the borrower consents to that amount. However, states that follow category two still always abide by the state’s small loan acts.

The third category allows pay day lending, but puts certain restrictions on it. The states that abide by category three have maximum interest amounts. For example, North Carolina can only charge up to 15% on a maximum loan of $300. By setting maximums, the government is able to regulate how much consumers are being charged for lending services. Also, by setting a maximum loan amount, the government can regulate how much debt a person can be in with a lending company.

In every category, there are laws that protect the borrower from spiraling into long term debt. The government intervention has helped many people from becoming over their head in debt, while still allowing them cash advances if they need them.

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