Payday Loans: Regulation Perspective

There are many aspects to our lives which are regulated by the government. Every now and then there are new crazy ideas by some politician to control one more aspect of our lives. Just the other day on the radio, I heard about a mayor trying to regulate the size of sugary beverages that can be purchased. I personally don't think that one will go very far, but maybe the regulation should be on how much it truly costs to buy that jumbo soft drink. The idea of paying three dollars or more for something that costs only pennies is outrageous. It seems like it takes someone with fierce convictions to attempt these types of regulations. It would also seem to me that educating people on the pros and cons would be the best fight. If there was regulation on the size of soda fountain drink and I really wanted more, couldn't I just buy two? It comes down to making the best decisions for me. This applies towards financial decisions as well.

In the Payday Loan industry there are many states with statutes that regulate how much a person can be loaned and how much the business can charge. People have made decisions or choices concerning payday loans based on some accurate and other misconstrued facts. Most people make comments about the industry without knowing all the facts. It is true that payday loans can be harmful to some people's finances, but there are many others who find success by using these fast short-term loans.

I believe that responsible lenders and borrowers make or break the loan transaction. In many businesses, there are bad apples in the bunch. Those that prey on the poor or most financially vulnerable without having the income to support the payoff are not responsible lenders. They are making a bad name for the rest.

Payday loans are designed to be short-term loans. The interest rate is kept high to protect the risk involved with a no credit check loan. People with bad credit will still be approved, but as with any risky adventure, the cost is higher. Some people want to say that it is unfair. The fact of the matter is that people have choices, and if you choose to apply for the loan, you will have to pay a higher cost if you are not responsible for returning the money on time.

Applications are found online or at payday loan stores. They are short and easy to fill out. Online applications will require a bank statement to qualify you. A responsible lender will verify your information and follow any state lending guidelines. They will look at your payday loan history and your income in order to approve your loan. The bad apples will lend no matter what, but good apples will determine your approval status based on set guidelines.

Once approved, your money will come to you at the store, or in the bank the next business day from an online lender. The schedule to pay it off will be set up according to your pay cycle. The process is extremely simple.

There are 38 states that carry statutes for payday loan businesses. The National Conference of State Legislation generally summarizes these statutes as a means of reference if you are interested in what your state regulations are.

Do your research when shopping for a loan. Find a business who abides by any applicable regulations and know that you have found one of the good apples. Payday loans do work for people at various income levels despite reports that they are only for the poor. They are definitely less expensive than a bounced check fee when done right.