It seems that a payday loan can be without one important aspect, a payday.  That’s right! A payday loan, which are short term loans given to people without any credit check, also gives people loans based on unemployment checks, social security, or just about any check that comes in on a regular basis.

The special report, conducted by the Action News from KEPR in Washington, showed that the national chain lenders would provide a payday loan based on a unemployment check.  Typically, people who are collecting unemployment are without a job, thus the reason it’s called unemployment.  However, this means that a person doesn’t have to have a job in  order to get a payday loan.
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There is so much hype and news going on with the payday loans these days that many people might be confused as to how they really work, where people stand with them, and how to get out of payday loan debt.

Getting payday loans are easy, and many people find it to be even simpler online, as there are no faxes, no credit check, and in most cases, no employment verification required.  People are able to get a payday loans with nothing more than a bank account and id, and the money is deposited in their bank account within hours.  However, since payday loans are so easy to get, what happens if a person isn’t able to pay it back and can payday loans get you in trouble with the law. 
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Lately there has been a lot of press about payday loans. Many people are getting them just to stay afloat and not get behind on bills. This is because a lot of companies are either cutting their budgets, reducing hours and payroll, or simply laying people off and they don’t have enough to make their monthly expense budgets.  The problem is that there are folks that get cash advance payday loans to stay ahead, but they have a hard time paying them back and wind up getting more just to pay for the last ones.
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Defaulting on any loan is bad news and reflects negatively on a person’s ability to re-pay debt, but not all lenders report defaulting loans or local laws prevent them from doing so.  However, people have to know that there are many consequences to defaulting on cash advance payday loans and that these loans should be taken seriously in order to avoid further headaches, fees, and negative credit history.   We’ve had people ask us, “what if I default on my payday loan”, what do I do?
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Many places today advertise cash advance payday loans as being a quick and easy fix to cash problems. Although they do provide cash when money is tight, its a good idea to have a way to pay them back to avoid more fees and penalties that will make this already costly option even more expensive.

The reason is that short-term loans don’t provide installment payments. The money is loaned to the borrower for a short period, usually two weeks or until next payday, and they are charged a fee based on the amount of money borrowed.
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There is a lot of political debate as well as power teetering about payday loans these days and whether or not to continue regulating them, ban them altogether, or make a reasonable way of tracking and distributing these funds so that people don’t find themselves in trouble.  The key argument is that these loans pray on low income people and put them into a cycle of debt that makes it hard to get out of.  The opponents say that this cycle to often leads many to bankruptcy, but can payday loans put you into bankruptcy?

The Consumer for Responsible Lending seems to believe so and they support a campaign Federally to cap payday loans at 36%. 
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Cash Advance Reviews has a new forum, and we are looking for questions, comments, and general thoughts about cash advances and payday loans.  The forum is open to all and we are encouraging lenders, borrowers, critics, and others who would like to weigh in on this topic to register for free and join the discussion.  The following are some ways you can use the new Cash Advance Forum.
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The Obama administration announced Thursday April, 23 2009 that they will be looking into credit card companies and trying to put in place some legislation that will help to curb some of the fine print, unannounced interest rate changes, and yes the biggest headache for many Americans, the high late fees that are charge to accounts with a payment due that is 3 times less that the fee charged.  All we can say is that it’s about time.
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It seems everyone is trying to grab headlines these days, but its one thing to promote a point of view, and quite another to outright mislead people about it.  However, that is exactly what the CRL (Center for Responsible Lending) is doing.  In a recent article posted by the Earthtimes (read it here), they provide details and points that are very accurate and reflect the true structure of short term loans as well as provide many detailed points about why the CRL is misleading people with the press releases.
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There is a lot of buzz going around Twitter today about the payday loans industry and particularly a report about Congress allowing the short term loans industry to charge up to almost 400% industry.

This is because many had suspected that the federal government would step in and put a cap on the loans at around 36%, which is what they capped short term loans at for Military families just a few years ago. However, in a complete turn of events they ended up settling on a cap of about 391%, which is about 10 times higher that was thought.
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There have been many new laws and regulations either proposed, passed, in or in debate over short term loans, often called payday loans.  Many of the people that are bringing up the new laws and debate say that these loans lead to a ‘cycle of debt’ that cannot be broken and eventually lead people to bankruptcy.  However, contrary to popular belief, and to those that are trying to bring this debate to light as well as give it merit, short term loans do not lead to a ‘cycle of debt’ and that they don’t lead to bankruptcy.

A recent study that was conducted over a 6 year period from 200o to 2006, using state data from 1990 to 2006, by Clemson University and others, concluded that short term loans are not the cause of bankruptcies. 
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Payday Loans Without A Paycheck or Job

Yes, you are reading the headline right.  How can lenders give payday loans without a paycheck or job?  That is exactly what is happening in North Carolina.  NBC news affiliate WCNC is reporting that they investigated over a dozen payday loans lenders that are on a single street in Charlotte North Carolina and all of them said they would give a payday loan to a person who has an unemployment check.  This means that a person who is not working and does not have a job is able to borrow money, and they are getting cash based on the limited income they receive for unemployment.

The report then went to the state laws to see if it was legal or not, and to their surprise it is completely legal.  Which means a person doesn’t even need to have a paycheck to get a payday loan.  Not sure if this is the right thing or not, but certainly needs to be looked into more. 
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Should States Continue To Increase Loan Regulations

There has been a lot of news out over the past few weeks regarding the loan industry, and in particular the short term loan industry.  These loans cover cash advances, short term loans, personal loans, online payday loans, and other forms of credit that have a short time frame for paying back.

Often these loans have higher interest, but that is because they have less payments and a shorter time frame to pay back. This means that the company that is providing the loan can only make a limited amount of money on lending the credit to individuals. Unlike credit cards and other forms of long term loans where the interest may not be as high, but there are more payments and over the course of the loan a person is paying back much more money than they borrowed.
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Short-term Loans versus Credit Cards

There has been a lot of reports out over the past few weeks about the short-term loan industry and the new laws and regulations that many states have been putting on the books.  In most cases there restrictions are put into place to do two things.  One, is to protect consumers from what is called predatory lending practices, and the second is to protect the state from lawsuits and bailouts.  However, the first reason is somewhat short sided and is only looking at one industry, while trying to say it’s protecting people from predatory lending.  However, the big gripe that I have is where are the restrictions and protection for people against predatory lending in credit cards.

Credit card companies to me are worse than short-term loan companies.  There are few reasons for that and I’ll explain them below in detail.
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State Laws Moving In On Payday Loan Industry

Over the past year or so there have been many new regulations introduced into state laws regarding payday loans, short-term loans, and cash advances.  Often these regulations and laws are put into place to help protect consumers, as well as to set up oversight on the industry, and in some cases even produce additional  revenue for the states.  However, some states have put laws into effect only to realize that they’ve created loopholes that not only help the industry to continue operating with business as usual mentality, but even hurt consumers in some cases because the lenders moved their practices into open-ended loans where there weren’t as tough of regulations as the payday loan industry.
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