Payday Loans
- October 27th, 2008
- Posted in Payday Loans . Politics
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I recently confirmed that it will be impossible to secure any payday loans in the very near future. Barack Obama support a national 36% APR cap on interest rates for all loans. This will effectively ban and outlaw personal loans outright. Why are politicians so against cash advance payday loans anyway?
The truth is this: the bad publicity of payday loans comes from the consumers, not the products. Let me explain. If you make $500 each paycheck, and decide to borrow $500 as a payday loan, how do you intend to pay that back? On your payday you won’t have enough to cover principal and interest. Is it the high interest rate that is the problem, or the fact that people are foolishly borrowing far more than they are capable of paying back?
Yet liberals often feel it is their “responsibility” to protect consumers from themselves. Since consumers are apparently not smart enough to manage their own finances, liberals have a “duty” to protect them from making poor financial decisions. Does that seem just a bit audacious to anyone else?
Obama is in favor of federal regulations on what he calls “predatory lending.” He says these evil lenders pray on the poor and susceptible because it’s easy to get them to borrow. Ask yourself one obvious question: why in the world would a someone lend money to a person who they know can’t or won’t pay them back? Does that make any business sense to you? Me neither…
Payday lenders provide a service that banks and most credit unions refuse to offer because of the high risk. As we now see, the home loan industry got a bit risky and the banks are paying for that now. Well, not really, the bail out is, but that’s another story altogether. What’s important is this- there are people who feel a lot of financial troubles and pressure (something I’m sure Obama and McCain know nothing about). When someone is out of money and yet has to pay bills or other expenses in order to survive, what are they doing to do? Family members can’t always pcik up the tabs. Soon payday loans won’t either…
It still baffles me that that strongest critics of payday loans are those who understand them least. Instead of shutting down the industry and increasing unemployment, why not invest that time and those resources to financial education programs? Why not help consumers make informed decisions when it comes to borrowing money? Why not trust Americans to make their own decision and live their own lives instead of deciding what’s best for them? WIth an inevitable Obama victory on the horizon, you may be getting a tax break, but don’t look to pick up that tax refund in the form of a cash advance. That option simply won’t exist for the next 4 years…
yes, it is true. cash advances do have a fee associated with them, but for a short term loan the fees are often less than bounced check fees, and credit card over-limit fees. for many people with bad or no credit, cash advances or payday loans are the only option available for somepeople. i agree with you completely that the american public should be able to make their own choices, and if they are too dumb to realize that they cant pay back what they borrow then anything that happens to them is their own doing. obama is not our “father” therefore it is NOT his job to tell us who, when, or how much money we as americans can borrow. this subject just makes me so mad. that liberals cant see past anything but a tax break is just sad.
I know many individuals who use payday advances. Whether you get a loan at a bank, or use a credit card; there is always fees associated with borrowing money. I know many people that saved A LOT of money by using payday loans, because they were able to get the money they needed, deposit it in their bank, and avoid the bank fees associated with bouncing checks. The fees they paid for their loan were 1/8 of what they would have had to pay on bounced check fees. If used properly, they are a great benefit.
With gas prices going up and up everyday, and school being back in session, there are bound to be those weeks were money is just a little shorter than you would like. that is where payday loans can help. they are fairly easy and simple to get, and the best part is no one even has to know you are getting one, not even your bank and they dont report to your credit….
Amen to payday loans comment. Absolutely true about what the people borrow should be their choice and they know it’s their responsibility to pay back the loan when it is due. Most people are smart enough to understand how the constracts work with payday loans and if they just ask and listen it will make perfect sence.
Its so easy for Obama to sit back and cut off payday lending because like you said, he has probably never even needed one. what about those young people that need gas in their car to get to school? or those mothers that need a little extra cash to pay for their childs daycare? or the teachers that wanna buy a little something special for their classroom or students? obama says hes for the students, mothers, teachers, ect. but what about the above mentioned ones? what are they supposed to do with no payday loans?
I agree with this post. The problem is that a lot of people don’t understand payday loans or the interest rates. I think the best thing we can do is try and educate people about payday loans. Payday loans should be for the least amount possible and paid off quickly.
I don’t think that the goverment should be able to cap the intrest on Payday Loans . It is the consumer right to go where they want to get money. Nobody forces them to use a payday loan service. The intrest rate is clearly stated before the loan process is finished.
Great information! I completely agree. I think it’s a cop out when people say that they were taken advantage of when getting a payday loan. There is information everywhere on what exactly a payday loan is. It is each consumers choice. Obviously it is sometimes taken advantage of unwisely, but again-it’s the consumers decision.
i agree with this blog. And yes, some people dont know what are the APR; why are they so high or sometimes low?.. that is why they have to know the rates before committing to one.
I hate the idea that politicians think they are helping people by limiting their financial choices. As you say, they refuse to actually look into the issue and see only APR’s that may seem high to uneducated, inexperienced eyes. The simple fact is that payday lenders are numerous because they offer a service the numerous people need in their lives. When this money option is shut down we will really have a financial nightmare on our hands. Good luck “Mr. President.”
Cash advance are really nice they can really be helpful when things are tight.
The bank is not going to lend 50.00 for a week, and they will not even consider giving a loan without pulling and basing it on credit.
I would rather go to a payday loan store and get a fast and convenient loan, then borrow money from friends and family. It is also a lot cheaper than bouncing a check, getting late charges, and a ding on my credit. Most of these places are really cheaper than what people think. I save a ton of money by not paying my credit union $27 every time I go over in my checking by even $2.00. It is important to use payday loans responsibily and only borrow what you can afford to pay back.