Cheap Cash Loans - Say What?
So you're looking at payday loans, wanting to find the best deal, the biggest bang for your buck. So you look, and you find $20 per $100, $17.50, maybe even $15. That's as low as you can possibly go, and $15 for a two-week max loan of only $100 is ridiculous, calculating into an APR of about 390%. So cheap payday loans are simply not an issue - they just don't exist. Mythical. Poof. Unheroic.
The magical realm of cash advances
Yet millions of consumers - cash strapped consumers at that - continue to flock to payday advance lending for financial solutions to financial problems with the full belief that they are getting a good deal or low cost advances. You want cheap payday loans? How about this:
- there is a maximum set up fee of $5 plus a maximum APR of 36%. that means, on a two week $100 advance, you will have to repay the $100, plus the $5 fee, plus 36%/12 months/ two = 1.5% of the loan amount, or $1.50. So instead of $15 per $100 borrowed your pay $6.50.
- As your fast loans roll-over and you delay their repayment you are not charged rollover fees, only the interest. So after a whole month you will own only $3, and after a year you will only owe $36.
Those would sure be some payday loans, huh? Really great stuff...and it almost happened.
The tragic quest of Senator Don Perata
The above scenario of truly cheap payday cash (from places like personalcashadvance) was the exact plan stated by Senator Don Perata (D- California) in his Senate Bill 834 to create "reasonable oversight of the cash loan industry." This example of low fee money would have revolutionized the entire industry, but the bill failed and we continue to see the high rates of today. Will visionary men like Senator Perata even attempt another go at expenses? Or will they just be beaten back by the Man in the House, or by consumers who simply want easy access to high-cost cash? The day of the payday lending is upon us! Who will rise to be the real Payday Lady? Senator Perata tried his hand, maybe yours will be the one to slay some real giants.
A payday loan by any other name- is still a payday loan
One of the tactics employed by the lending industry is to call these financial instruments by many other names. They took the faxing out of the process and called them no faxing payday loans. They must have gotten a lot of responses by people who did not have a checking account, because soon enough they started calling the same old payday financing savings account payday loans instead. Then they had to think long and hard about who else they had not yet taken advantage of and what did they come up with? A-hah, our armed forces, they said in unison, we have not taken nearly enough away from them so let's call our loans!
And the list goes on and on, presumably the pseudonyms will get more and more strange once they run out of ideas or the people catch on- then things could get interesting.