Discerning Oregon Payday Loans
Oregon fast cash loans are controversial financial products that allow people to take on a short - term loan (payday loan) for a limited period of time. Typically, people who take on a payday loan will borrow money for a period of about two weeks although the loan terms can be longer or shorter depending upon the circumstances of the loan transaction.
Payday loans are controversial because they have some very bad aspects to them, but they are also the only financing option available to many people in specific situations where they really need to borrow money.
The bad aspects of payday loan relate to the cost and to the fact that it can become easy to get stuck in a debt trap that it is hard to get out of. Payday lenders charge very high fees to people who take these short - term loans, resulting in an annual percentage rate (APR) of 450 percent or higher in some cases.
The APR is the annual cost of borrowing money and is the way that loans are measured even when the loan is a short term one instead of a long term one. An APR on a credit card is usually below 30 percent and an APR on a mortgage is usually below 6 percent, so you can see just how high the APR is on payday loans when comparing these different financial products.
The other concern is that people may be trapped in a borrowing cycle. When you take a payday loan to get you through until payday, it costs you a lot more money to pay it back. This can result in you being short again and needing to take another loan to get you through until you get paid. You may continually repeat this cycle and not ever be able to stop taking payday loans and get out of debt.
These downsides are real and significant, but the fact remains that payday loans also provide credit to people who may need it and who may otherwise not be able to get it. Payday loans are one of the few financial products that allow short - term borrowing. They also allow you to qualify just based on having a job and a bank account, even if you have no credit score or if you have bad credit. This means that people who would be unable to get conventional loans are able to use a payday loan to get cash they need to deal with emergencies or to pay pressing expenses.
Oregon Payday Loan Laws
Because of the controversies surrounding payday loans and because of the significant downsides, many states have passed limitations or restrictions on payday lenders. Oregon is one of the states that addresses payday lenders and that has passed restrictions. The basic rules surrounding payday lenders can be found in 45 OR Rev. Stat. section 725A.064.
According to the Oregon laws, there is a maximum APR of 36 percent. Lenders are also permitted to charge a $10 fee on every $100 that they advance to a borrower. This can result in a 156 percent APR if you borrow $100 for 30 days.
Oregon also sets rules on the term limits for quick loans. Loans must last for between 31 and 60 days, giving debtors more time to pay back the loan without needing to extend it or to take another loan. There is no limit to the number of loans over the course of a year, however, and two rollovers are allowed when a loan has been taken out.
Stay Educated about Payday Loans
The laws for fast cash Oregon loans allow people to take payday loans but make sure that borrowers are protected and that the terms of these loans are at least somewhat reasonable. Understanding the payday loan rules in Oregon is important so that you can make an informed choice about whether this method of borrowing is an appropriate one in your particular situation.