Payday Loans Questions

Rising graph composed of coin stacks
Dec, 21, 2011
After comparing the prices of payday loans, which usually hover around 15 percent, to other loans, often ranging from 3 to 10 percent, an obvious question is, “Why?” The short answer is because pay lenders have to price their loans that high in order to stay in business.  
Man in prison
Dec, 19, 2011
While theoretically a lender may be able to have a payday loan borrower arrested, the chances of this happening are slim to none with our justice system. Debtor’s prison was abolished in the United States back in the middle of the 19th century. Since then, debt and the failure to repay on loans are not considered criminal crimes, but rather they are civil crimes—which can only be compensated for with money, not jail time.
Man stressed out with papers in front of him
Dec, 8, 2011
Payday loans can be forgiven if a borrower files for chapter 7 bankruptcy. But not everybody qualifies for chapter 7 bankruptcy, as it has more stringent guidelines than other forms of bankruptcy. A bankruptcy lawyer can advise you on an individual basis as to whether or not your financial situation would allow for chapter 7 bankruptcy.  
Open checkbook
Dec, 5, 2011
While every lender is different, the vast majority of payday lenders will not issue a payday loan to those without a checking account.   The reasoning is because checking accounts allow for direct deposit, and lenders feel more secure if their borrowers have direct deposit established. That way, in the event a borrower does not live up to his or her end of the bargain, the payday lender can withdraw the amount owed from the borrower’s account. Without this safety net the lender is issuing payday loans of sometimes several hundreds of dollars to a complete stranger based solely on that stranger’s word.  
Open safe
Nov, 30, 2011
When a borrower finds himself in a position with multiple payday loans that he’s unable to payoff, one way of pursuing debt-freedom is by consolidating all of the loans into a single payment.   Single payments can provide a variety of benefits:
Man pulling his empty pockets inside out
Nov, 28, 2011
If a recipient of a payday loan finds themselves unable to pay back the loan’s balance after the agreed upon two week term, they can “rollover” their loan.   Rolling over a payday loan refers to taking out another payday loan for another two week term. However, borrowers should be especially careful when considering rolling over a payday loan. Rolling loans over several times over is what earns payday loans their bad reputation.   When a borrower rolls a payday loan over, the amount of interest agreed upon in the original payday loan will be charged at the end of the new two week period.  
Boardgame showing tiles spelling out "Best Deal"
Nov, 7, 2011
When borrowers begin searching for a payday loan, they usually do not see any percentage rates in the advertisements. It is not uncommon for payday loan websites and stores to express a loan’s costs anecdotally, using dollar amounts for consumers to gauge what they will owe.
Silver judgement scale
Sep, 20, 2011
Payday loans are often a controversial topic among both consumers and lawmakers. While a good source for fast cash, some suggest that these loans also come with some risks. As a result, there are many strict laws in states throughout the U.S. that cap the amount a loan can reach, set other limits and restrictions, and even prohibit payday loans within the state. For example, Alabama, Alaska, Virginia and Delaware cap payday loans at $500, California at $300, Louisiana and Minnesota at $350, Hawaii at $600 and Idaho and Illinois at $1,000.
Piggy bank with coins in front of it
Sep, 19, 2011
Most payday loans come from private specialty cash advance shops; however, more and more banks are offering a financing option similar to payday lending, except they list it under a different name. Banks offer what they call “direct deposit,” “checking account advance” or “direct deposit advance” loans, which allow borrowers to get emergency cash based on their paycheck.
Keyboard key displaying blue shopping cart
Sep, 12, 2011
Payday loans are often used to cover immediate expenses or to help borrowers attend to their financial obligations when employment checks or other resources aren't fast enough. The ability to secure payday loans online has made fast funding a reality for many borrowers. However, while such transactions are convenient for most, they still have a few basic requirements. Preparing for these requirements can ensure application and approval processes are completed as quickly as possible.

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