Payday Instant Loan Interest Rate Controversy
There has been a great deal of debate recently in regards to the amount of interest being charged on payday instant loan opportunities. The majority of these loans are now provided online and there are new lending institutions appearing all over the online world. Across many states in the US, the government has cracked down on payday instant loan lenders and they have put a cap on the amount of interest that is allowed to be applied to a payday instant loan. This is great news for people wishing to obtain a payday instant loan, as they will have hardly any interest to pay when they take out a payday instant loan for a period of 2 weeks, however this is not great news for the payday instant loan lenders themselves.
Online short term loan lenders are offering a service to people who are struggling financially from one payday to the next. For the convenience and ease of this service, the lender will charge a high interest rate that is calculated annually. When you borrow a small amount of money over a 2 week period, although the interest rate is extremely high, it means you will need to repay the amount you borrowed plus the extra amount calculated from the interest rate and it would generally work out to be $15 to $25 in interest for every $100 that is borrowed. This is quite affordable when you are desperately in need of cash for an emergency and it just can’t wait until your next payday.
With the government capping the amount of interest that can be charged by payday instant loan lenders, it will mean that for every $100 you borrow, you will more than likely only need to pay about $2 in interest. As you can see, this is very rewarding for the person that needs to take out a payday instant loan as quickly as possible, however it is also the reason that many payday instant loan lenders are having to shut up shop because they simply cannot afford to offer their convenient services for free. Obviously the government is trying to protect the consumer from spiralling into further financial hardship, however these instant payday loans were designed with a specific purpose in mind, and that is to help people and families out with some much needed cash, perhaps even to put food on the table before the next payday comes around. If lenders are responsible and people applying for a short term loan can do so and stay within their budget, then the whole issue could be a thing of the past.
If you need a payday instant loan, have a look at the interest rate to ensure the lender is following government regulations for your individual state and read the terms and conditions carefully. The most important thing to consider is do you really need a payday instant loan or can you wait until your payday comes around again? If you desperately need the cash, then make sure you have plans in place to pay back the entire amount as quickly as possible.