Pay Day Loans  Loan Sharking ReinventedPay Day Loans Loan Sharking Reinvented

We see advertisements for quick cash loans every day. These loans can be pay day loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans. Typically the borrower rights out a check for the amount of the loan plus a fee. This fee can range from 10% to 40% of the loan and the borrower usually has two weeks to pay it off in full. Most can't pay it off in time and end up owing, in some cases, more in fees than the amount of the original loan.

Some states like South Carolina have placed limits on the fee amount allowed. South Carolina law limits this fee to 15% of the amount borrowed. If you were to look at this in a yearly APR it would be 390% interest. Most states have usury laws which limit a yearly rate to 30% or under. Currently Pay Day stores slip by by stating that loans are paid off in 2 weeks so no violation has occurred and that they are providing a much needed service to people that have no where else to go.

The actuality is that most of these borrowers cannot repay on time and so they are forced to pay the interest and take out another loan to cover the principle. Currently the average borrower in South Carolina takes 10-15 loans to payoff. These statistics are similar in other states. Which means the borrower will pay $400 - $500 in loan fees on a $400 loan. This is usury and should be illegal as it is not helping anyone. It is predatory lending that just gets borrowers in deeper debt than before.

?Some will say, that little man has to have somewhere to go,? said state Rep. Eldridge Emory, ?Butif he gets money this way, he's just digging a hole deeper and deeper, and he's not going to get out.?

Several states like North Carolina have currently banned this form of predatory lending. Others are beginning to consider legislation to further control and possibly curb pay day loans. Still more needs to be done.

by David Maillie
References and Bibliography

David Maillie is an alumni of Cornell University and specializes in biochemical synthesis for public, private, and governmental interests. He holds numerous patents and awards for his research. For more useful information please visit:

Rated:NR/0 Votes
Add To My Article Reading List
Add To My Article Reading List
Print Article
More Article By David Maillie
More Article by David Maillie
More Articles From Loans
More Articles From Loans
Related Articles and Readings
Christmas Loans Taking Care of Financial High Tide of Yuletide By: Clarice Noelle
Can you feel the chill in the air? And there it begins to snow! Vast open spaces, roof tops, trees?. ? all covered with layers of white pure snow. Sure sign that Christmas is not far. Everything changes during Christmas time. Psychologically it breeds happiness, fun frolic, everything good and ...
Getting Loans for the Unemployed By: Tim Long
Because of the global financial crisis, many companies have no other resource but to cut down expenses and cut down employees for their business to survive This has led to a high unemployment rate and many are financially burdened because of ...
Education Loans By: Max Bellamy
Education loans are meant for people whose income is not high enough to attend school. With high education costs high and the availability of education loans, many people are opting for these loans.Educational loans are of many kinds: according to the sponsor (federal or private), according to the beneficiary (undergraduate, ...
Payday Loans Bridging The Void Between Paychecks By: Shruti Sharma
Emergency - the word is written everywhere in red and considered a danger sign. We all are afraid of what we will do if we encounter this emergency. The word emergency is usually associated with money. Generally a crisis situation involves the money issue. The payday is too far and ...
What You Need to Know About Debt Consolidation Loans UK By: John Mussi
Should you find yourself over your head in debt, you might want to start looking into debt consolidation loans UK . These loans are designed for the person who needs help in taking care of their outstanding debt, keeping them from bankruptcy.Much like conventional secured loans, debt consolidation loans UK ...
The information provided in this article and/or the comments is the sole responsibility of their respective authors and does not necessarily reflect the opinion of  does not endorse any article and/or comments published by our web users unless otherwise noted. 

Member Panel

login to submit articles and more


  • » Active Categories: 419
  • » Active Articles:252603
  • » Active Authors:31917
  • » Active Members: 38237
  • » Statistics Updated:
    - Tue Sep 1st, 2020 09:28AM EST