Payday Cash Loans
Cash loans provide financial relief for those who have an unexpected expense and cash is a problem. There are thousands of lenders who offer cash loans and most of them can be found on the Internet.
Cash loans have come under great scrutiny by those who think the loans are taking advantage of those who are already in a financial crisis and are trying to fix the problem with a high interest and short payback term loan. Some states have taken measures to ban cash loans, but what the ban really does is take away the only opportunity some have for cash loans. Some people automatically equate financial difficulties, no matter how small, with fiscal irresponsibility. In some cases that is true, but most people are financially responsible but find themselves on the short end of the cash once in a while.
States that regulate cash loans do so because they see the benefit cash loans serve for those who have no other choice when it comes to obtaining short term cash. The loans have to be regulated just like banks and credit unions have to be regulated and that is for the protection of the financial customer. The regulations vary in each state, but most regulate the maximum loan amount that can be offered and the finance charge that can go with it. The states often regulate the number of times a loan can be rolled over and if a second loan can be taken out before the first loan is paid in full.
The biggest complaint lodged against the lenders who offer cash loans are the finance charges. The finance charges are usually from 15 to 35%, depending on the lender. That equates to $15 to $35 per hundred dollars borrowed. When the annual percentage rate is calculated, the APR comes to something in triple digits. Most people do not know or fail to acknowledge, the annual percentage rate is calculated out over 12 months for credit cards and bank and credit union loans, which makes the APR small in comparison. The shorter the loan term, the higher the APR will calculate out.
Cash loans should be regulated in all states, the same way banks and credit union loans are regulated. Sometimes the borrower only needs a few dollars for a couple of weeks, but yet banks want to saddle the borrower with much more of a loan than they need and a payment plan that includes years instead of just a couple of weeks. Sometimes the banks charge an early repayment fee, keeping the borrower tied to the loan a lot longer than necessary.
Banning cash loans does not solve the problems such loans are thought to bring. If someone needs quick cash, they will find a way to get it and it sometimes will not be pretty. Anyone desperate for cash without a legal way to obtain it will sometimes resort to crime. Breaking and entering homes and vehicles and grabbing the small things that will bring a few bucks, become a common way of life for those that have had a viable alternate of cash banned.