Its easy to argue that payday loans and auto title loans are just plain evil and should be banned completely. But the problem is, theres a demand for them. A Pew survey finds that most payday loan users say these loans take advantage of them but at the same time, most say the loans provide much-needed relief.
Fortunately, there are better ways to raise cash in a crisis. Sometimes, its possible to get by without borrowing money at all. You can sell off belongings or ask for an advance on your paycheck.
Pawn shops offer fast loans to people who often have nowhere else to turn. As the recession has deepened, more people have found themselves turning to pawn shops for personal loans. About 30 million Americans get no credit check loans from pawn shops each year, and the average amount 45 day cash advance individual loans is 80, according to the Pawnbrokers Association.
Here are 7 things to remember when considering a loan from a pawn shop. Pawn shops makes personal loans to people who bring in items as collateral. Common items that are pawned are jewelry, TVs, cellphones, cameras, guns, musical insruments, etc.
Borrowers receive a ticket that lists the items they pawned, amount of their loan, and when the money is due. Pawnbrokers are required to give police a list of items that have been pawned to screen out stolen merchandise. Although pawn shops offer fast loans, they aren't cheap.
While lending companies and their investors rake in money, however, the situation is more precarious for the more than 3 million Americans who take out online payday loans each year. The very purpose of an online lender affiliating with a tribe is specifically and expressly so that they can lend in violation of state laws, Ellen Harnick, a payday lending expert at the Center For Responsible Lending, told HuffPost.
And it's the poorest Americans -- the ones who need quick cash to address the most pressing issues in their lives -- who are most at risk. State regulators have taken numerous measures to protect borrowers, passing laws limiting the size and frequency of short-term loans and setting maximum interest rates that 45 day cash advance can charge borrowers.
Laws in 14 states and D. that outlaw payday lending make online, high-interest installment lending illegal as well. The Consumer Financial Protection Bureau is also in the midst of writing 45 day cash advance first federal payday lending regulations. But by working with Native American tribes, companies like Think Finance have largely managed to stay one step ahead of consumer protection laws. T he Think Finance-Plain Green business model is representative of these growing online payday lending operations.