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A payday loan is basically a short term loan of not a huge sum of money anywhere ranging from around $100 dollars to a couple thousand dollars, which is meant to be paid back in a short time frame usually on the following pay date. This type of loan is granted to you by a financial lender with a small fee which is expected to be repaid the following pay check. This is usually used in emergency situations or when you need cash in between your pay dates to help get by; basically it’s your next paycheck earlier in the form of a loan.

Each financial lender, any reputable lender, will deal with you in a professional, respectable manner and respect you private information given to them. Every person applying for a payday loan is treated with great customer service in a courteous way. How the payday loan usually works? You get approved for your loan, the funds will be automatically deposited into your bank account that you provided. The same goes for repaying your loan, the lender will then withdraw the loan amount and any charges or fees that come with the loan directly from your account given. When applying online for a payday loan, most of the individuals are seeking immediate help for an emergency reason or something equivalent. Usually the payday loan is a last resort if you cannot borrow the money from family or friends. Nowadays there are thousands of payday loan companies there and even more on the internet, that will give you a short term payday loan. Say if there isn’t much time till your following paycheck, make sure that it’s the right decision to get a payday loan and it is definitely needed.

You can now apply for online payday loan advancement without a mess of paperwork and dealing with faxing or copying documents.  Usually the loans which you are required to fax paperwork or any other documents are secured loans, and will need all your personal information that needs to be given to your loan lender. This is definitely time consuming and can have a great cost on you as well. So if you don’t want to deal with the mess and headache then a payday loan seems to be your best choice to accommodate you.

The purpose of payday loan advancement is to get your hands on money quickly and easily, but it needs repaying with the following paycheck. Being able to repay these loans is not always as easy as it sounds, things will come up out of nowhere and you will need to file an extension for your payday loan. So be careful of your loan, make sure to do your homework finding the right payday loan, and make sure to read up on all the fine print of charges and fees and if something should happen and you need to file an extension.

Being responsible is a huge factor in getting a loan. Being able to take only what you can afford to repay and taking the money for the right reasons is a must. Taking a payday loan out to buy a television set may not be in your best interest because the fees and charges might end up costing you a lot more than expected, and may cause you to go into debt or hurt your credit if failed to repay this loan.

We can find more and more articles, devoted to the changes in regulation of payday lending industry. The main purpose of this regulation is to make payday lenders leave the finance market. It has already happened in Arizona, where a new bill was signed, which bans lenders to establish such an annual percentage rate on the payday loan that enables them to receive profits from the operations. Authorities in Arizona state that the interest rate of 36% is the maximum rate which can protect the payday loan borrowers. Because of this payday lending companies are only let to apply 36% rate, which means that they will receive $1.38 for a $100 loan, given for 2 weeks. These $1.38 fees will never cover operational expenses of payday lenders, even if borrowers will always repay their credit in the due date. In reality customers are not able to pay off their loans on time, which makes lenders charge no less than $15 fees for a $100 loan in order to cover their costs.

When I was reading numerous articles about “consumer protection”, I remarked that all the authors propose to protect borrowers only by banning payday lending options. But I haven’t seen any article yet, in which payday lending opponents offer some other alternatives for the customers who can’t use payday lending services any more because of their elimination in the state.

I think that if authorities really want to protect customers and do it by banning payday lending industry, they are to propose credit alternatives to borrowers. I consider that before imposing such restrictions, legislators should examine the lending market and reveal the level of the demand for payday credit and other short-term financial products in these markets. In my opinion, firstly we should study how the regulation has affected economic situation in the other states, where new protection bills have been passed, and only then take some measures.

So, there are particular reasons for legislators not to consider these issues. Were they really care of consumer financial protection, they would examine the recent report, issued by the New York Federal Reserve, in which economic consequences of eliminating payday loans are described. In this report states, in which payday lending services are allowed, are compared with those states, where all payday lending operations are banned. For example, more complaints about debt collectors and lenders, more bounced checks, and a high amount of applications for bankruptcy protection were recorded in Georgia, the State where payday loans are eliminated.

Another fact which needs careful consideration is possibility of appearing fake lenders. Those customers who have previously borrowed loans from the web stores, which were regulated by the state and are likely to be banned soon, now will be looking for other credit options and may be taking loans with even higher interest rates from so-cold internet payday lenders, which activities are not regulated at all.

The legislators only seem to protect consumers, in reality they do nothing but aggravate financial problems of customers. Instead of banning payday lending industry, they would better study the advantages of payday loans or offer some interchangeable and efficient forms of short-term credit.