Page 49 - Book4E

lenders at all. A CFA survey of 100 online payday lenders and referrals sites discovered that many operate from outside the United States and, perhaps, out of reach of American laws. Through the survey CFA also found that loans of $200 to $2,500 were available, but $500 was the most-frequently offered. Finance charges ranged from $10 per $100 up to $30 per $100 borrowed. The most common rate of $25 per $100 translates into an annual percentage rate of approximately 650 percent if the loan is repaid in two weeks.
Bruce says the growth of online payday lending is presenting problems for state law enforcement officials and consumer advocates. For example, in 2007, the Massachusetts Office of Consumer Affairs and Business Regulation ordered 91 companies marketing Internet payday loans to cease. The companies were allegedly charging annual percentage rates averaging 300 percent and fees averaging $30. The state says none of the companies were licensed to offer loans to residents.
When all is said and done, resorting to a payday lender, whether online or around the corner, is the wrong choice. If you’ve found yourself frequenting such businesses for a quick fix of cash before next payday, think twice, and then think again. Resolve to live within the budget you’ve established and do all in your power to resist falling for payday loans and the subsequent pain of over-inflated interest rates that only compound the problem, not alleviate it.
Warning: Stay Away From Pay Day Loans 39