Inside Payday Loans

A lobbyist for South Dakota’s payday loan industry says the industry is well-regulated and there’s no need for the state Legislature to do anymore right now after tweaking the laws several times in recent years. Short-term credit exists to help people who can’t get loans elsewhere, and too much regulation could stifle competition and push interest rates higher, said Rex Hagg, a Rapid City lawyer representing the South Dakota Short Term Lending Association.

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The local payday loan industry has launched an aggressive advertising campaign to try to persuade the D.C. Council to reverse a vote that would limit the fees charged on short-term loans. Last month, the council voted 12 to 0 to give initial approval to a bill that would limit the rate charged for a $100 loan repaid within two weeks to 90 cents - a rate more in line with those of banks and credit unions. Currently, customers pay an average of $15 to $16 per $100. The industry maintains that such a cap could force payday advance firms out of business.

The association, which represents 41 of 48 payday loan stores in the District, is also conducting a poll to gauge how the public feels about payday loans, said Tyrone D. Bland, vice president of the association and government affairs director of ACE Cash Express, which has 15 stores in the District.

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Obviously using a cash advance company with a no credit check policy would be a blessing for many people; if their credit history is not up to the standard that the company expects, then they can still get the cash advance because of the many companies that won’t even check their credit history.  Not having to deal with a credit check can speed up the whole process of the cash advance loan.  You will be applying for a loan one day and then getting cash the next day, which is why so many people prefer to go for a cash advance loan rather than a normal loan. Why lower your credit and wait around for the company to make a decision when you could have the money the very next day?

These cash advance loans are a good way to rebuild your credit history and try to restore it to what it used to be, but if you don’t repay the loans within the time limit applied to them, then your credit history could take another knock and you could be turned down by the cash advance companies in the future because of your inability to pay them back on previous loans.  You may not have another way to repair your credit history.

Cash advance loans are a quick and easy way to get some extra cash when you need it the most, and thanks to the no credit check policies of some companies, the whole process is sped up.  But the no credit check policy can also cause people, who knew they would not be able to pay the loans back, to go into debt.  These people end up in some severe trouble. And if they can’t remedy these problems quickly, then they will more than likely end up filing for bankruptcy not long after.

Arizona’s major utility companies have ended a longtime practice of allowing customers to drop off electric and gas payments at payday-loan centers. Southwest Gas, Tucson Electric Power and Arizona Public Service Co. began the practice as a convenience to customers but learned of some potential problems last month.

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