Connecticut Payday Loans Made Easy
Each year, Americans all across the country take out payday loans. In fact, about 19 million households take out payday loans each year, accounting for more than $30 billion in cash advance loans annually. These short - term loans are popular because they offer instant access to cash, which can be very helpful in making ends meet and taking care of emergency expenses, especially during tough economic times.
Payday loans, or deferred deposit loans, are a type of lending where the consumer borrows against an upcoming paycheck. The borrower will write a post - dated check to the lender for the amount of the loan (usually a small amount of $500 or less) plus interest charges and service fees, and the lender gives the borrower the cash they need instantly. On the date of the borrower's next payday, the check is cashed to pay the lender back.
These types of loans do come in handy in emergency situations, but they should not be used without exploring all other alternatives first. Payday loans have lots of finance charges and very high interest rates, typically equating to more than 400% APR.
For this reason, borrowers should only use payday loans in emergency situations and as a last resort. There are those times where fast cash is needed, but a deferred deposit loan should only be taken out once all other options have been considered.
Furthermore, it is important to ensure that taking out these short - term loans does not become habitual. It can be very easy to slip into the trap of relying on payday loans to get you by from paycheck to paycheck, and as the finance charges add up, paying off the loans and getting ahead financially gets more and more difficult. Studies have shown that habitual payday borrowers tend to take out loans for bigger amounts each time, causing themselves to get further and further behind financially.
Connecticut Payday Loan Laws
While payday lending is popular in many areas of the country, the practice is actually banned in Connecticut. Currently, it is illegal for any lender to offer these short - term, high - interest cash advance loans anywhere in the state. So, while there might be over 20,000 payday - lending stores across America, there are none in Connecticut.
Connecticut is one of 17 states where payday loans are prohibited by law. Some of the other states where these loans are banned include Arizona, Arkansas, New York, New Jersey, and North Carolina.
The chief reason behind the payday - lending ban in Connecticut (and other states) is to protect consumers. Some argue that payday loans can do more harm than good. They believe that while the need for emergency cash is very real in this country, the high interest rates of payday loans can place a severe strain on borrowers, putting them in a deeper financial hole than they started out in.
Many believe that deferred deposit loans have a tendency to target the working poor and military members. The appeal of fast cash can be very tempting for those living paycheck to paycheck, and studies have shown that many people who use payday lending end up taking out more than one of these loans, so they do have an addictive quality to them.
The Latest Information on Connecticut Payday Loans
Laws are constantly being changed and updated, so it is important that you stay current on the Connecticut fast cash loan laws. This page is for general information purposes only and is not intended to serve as a comprehensive legal reference.