According to a payday loans news report, poor Americans are being forced to take a number of loans throughout the year in order to take care of day to day needs. It was found that about 70 percent of all those borrowing take payday loans which are known to have high interest rates; they do this so that they can pay recurring bills and in some cases for buying food.
This report comes in the wake of a host of economic difficulties including high rates of unemployment and increasing cost of living. Currently there is a plan to come up with policies at the national level that will be used to regulate the payday loan industry. Regulation of the banking industry news as it stands right now is done at the state level with each state having its own regulations on the same.
The report findings are based on surveys carried out on more than thirty three thousand individuals above the age of 18. The findings indicated that most of the people who are going for loans are those within the ages of twenty five and forty nine with household incomes of less than 40 thousand dollars. People making between 15 thousand and 25 thousand dollars happen to be the most frequent users of payday loans; almost twelve million Americans went for a payday loan over the last one year.
Some characteristics of payday borrowing
It was also found out that the amount of money that the borrowers eventually ended up paying for the loans was quite enormous; the approximate figure stood at 900 dollars, this includes interest and other fees; this figure was for a loan of 375 dollars. If this amount is anything to go by then it is quite evident that going for a loan is way more costly than using ready cash to take care of different needs.
Another finding was that the cost of taking a payday loan varied quite significantly depending on the lender and one’s state of residence. The lowest interest rate in this case stood at about 15% and the highest rate going in excess of 400%. Fifteen states have in place restrictive measures on loan shops, 28 allow store-front lenders to operate while 8 states allow them to operate but under very strict regulations in terms of interest and fees charged.
Why payday lenders are in business
About two decades ago the number of storefront lenders was quite low; nine years ago the number stood at three thousand. Currently, the number of storefront lenders stands at more than twenty thousand. There are also scores of online payday loan lenders and other more conventional lending institutions. These are things all potential applicants should know.
The report concludes that www.mypaydaylender.co.uk and similar establishments appear to be in business for the massive profit margins as opposed to helping needy customers. This reality coupled with a tough economic environment has seen an increasing number of people fall deeper into debt. Consumers are therefore advised to avoid taking such loans as much as possible unless in case of emergencies. This is however going to prove difficult as a result of the high cost of living.