Frequently Asked Questions
What is a payday loan?
A payday loan, also called a paycheck advance or cash advance is a short-term loan that is intended to help a borrower with his/her expenses until their next paycheck. According to the Consumer Federation of America, typical payday loans vary between $100 and $1000 and average between two and four weeks. The average annual interest (APR) is estimated at 470%. Very often, the shorter the loan term the higher the interest.
How does a payday loan work?
Payday borrowers write a personal check or electronic access to their bank account for automatic withdrawal for the amount being borrowed including a finance charge. Lenders loan the borrow the amount in cash and hold the check until the borrowers next paycheck. At that time, borrowers can pay the loan off by paying the principle and finance charge, or simply the finance charge and roll the loan over to another month.
Are payday loans bad?
Although payday lending has come under controversial scrutiny in the last couple years, the truth is that there are situations when a payday loan is very helpful. However, just as with any other loan, but perhaps even more prevalent with payday loans, borrowers must practice responsible lending.
Who regulates payday lending?
Although payday lending is largely regulated at the state level, in 2006, Congress passed a regulatory law, namely The John Warner National Defense Authorization Act, capping the lending to military personnel at 36%. The Defense Department labeled the payday lending institution “predatory”. Some states, including DC and New Mexico have passed similar regulatory laws with maximum interest rates and Georgia banned payday lending entirely.
What is internet payday lending?
Internet payday lending is when a consumer or potential borrower fills out a form or online application and faxes it to the lender with the requisite information including bank account numbers and social security number, a copy of a personal check and/or bank statement. The payday loan is thereafter, directly deposited into the consumer’s account and on the due date the finance charge is automatically withdrawn by the borrower.
How much will a settlement help?
While there is no way to estimate your savings, because each payday lender has unique circumstances with many contributing factors. Payday loan settlement may reduce your monthly payments and ultimately eliminate your payday loan debt. You have nothing to lose besides 10 minutes of your time. So fill in the form and find out if we can help you get out of the payday loan debt cycle.