The Truth About Pennsylvania Payday Loans
When you have an unexpected financial expense, it can be very stressful if you don't have the money. Especially if don't know how you will make your bills until payday. If you find yourself facing this situation, bank loans are not really going to help you since they have a long application process and are typically meant for more long - term borrowing. If you don't already have a credit card, borrowing money on a card is also not going to be a solution.
In this situation, the best option that is available to you may be a fast cash loan. Payday loans are intended to meet short - term financial needs. They get their name because they are quick loans meant to spot you some cash until payday comes around. Because their specific purpose is to lend you money temporarily, the term of most payday loans is about two weeks.
Payday loans serve a really important purpose because of the fact that they are one of the few financial products that makes this type of very short - term lending possible. Not just that but payday loans are unique in that you can borrow a small amounted of money very easily. Regardless of whether you have good credit, bad credit or no credit, you can get a payday loan with income and a bank account.
While these features make payday loans a useful financial product, however, there are also some very serious downsides to payday lending that make payday loans a dangerous financial product. Many people refer to payday loans as predatory loans or predatory lending because of the major downsides.
The big issue that most people have with payday loans is that this is one of the single most expensive ways to borrow money. Whenever you take on a loan, you need to pay some cost for the privilege of borrowing the money. This is normally called interest and is expressed in terms of the annual percentage rate (APR). APR is the cost of borrowing the money over the course of a year, expressed as a percentage of the loan. APR is an objective measure of the cost of a loan, even if you do not actually borrow the money for a full year like with payday loans.
Due to their short - term nature and due to the very high fees that are charged by payday lenders, payday loans have a really high APR. In fact, this APR can be more than 450 percent per year, when you could usually get even a high interest credit card with an APR of 30 percent or less. Paying this extra amount of money for a loan makes sense only if a payday loan is your only real viable option for borrowing.
Pennsylvania Laws on Payday Loans
In the state of Pennsylvania, those who want payday loans are not going to have a very easy time of finding such a loan. This is because the law has very strict debtor protection rules. In fact, under 63 Penn Stat. Ann section 2325, check cashers are forbidden within the state. Payday loans in general are not allowed in the state of Pennsylvania.
Fast cash Pennsylvania loans also has caps and limitations on what can be charged when you take out a small loan. For example, the caps mandate that the maximum small loan charge is $9.50 per year plus a $1.50 service charge for each $100 borrowed.
With these restrictions, payday lenders cannot operate legally in the state. If there is a lender offering you a payday loan, that lender is operating outside of the law or within loopholes and is behaving in a dishonest way so you should be very cautious and strongly considers walking away from the loan.
Stay Educated About Payday Loans
Whenever you wish to use a Pennsylvania fast cash lender it pays to be informed about the laws and requirements. When it comes to payday loans, for example, it is important to understand that the law forbids these types of loans. You should be sure that you keep up - to - date on any laws affecting payday loans so you will better understand your legal rights and can make more informed choices about what borrowing opportunities are available to you.