Low Cost Payday Loans


While there is legislation trying to limit fees for a payday loan, you need to be careful and research who you choose because rates very greatly. A typical charge for a payday loan is from $10 (very low to $17.50 for every $100 borrowed, but, as was just stated, the rates are all over the board. One trick is to search on a term like "$10 for every $100 payday loan" or "cheap rates for payday loans". Advertising changes quickly, so the same term does not always work, but try serveral variations on the theme to identify the best vendor.

If you believe you are using a payday loan as a short term stop gap and you won't do it again, considuer this: A Wall Street analyst that analyzes the payday loan industry said "the average customer makes 11 transactions a year". This means that people who find payday loans a necessity, often get themselves into a hole they can't get out of. The interest rates can be hard to recover from.

U.S. Senator Dick Durbin (D-Ill.) introduced a federal bill that would cap interest rates, including all fees, at 36 percent, but this bill has not passed per this writing. For example, New Mexico has allowed payday lenders up to 417 percent annual interest rate charges. The rates vary by state, with the best being states like Ohio and Arizona.

The Military Lending Act was passed in 2007. This bill caps interest rates at 36 percent for types of loans made to military personnel and their dependents. Per the legislation, the lenders can't use post-dated checks and/or electronic debits.

Two tips:

1) If you can, try not to use payday loans. Alternatives exist: talk to a credit union for a short term loan or seek the advice of a consumer credit counselor.

2) There is a document by the consumer law center that shows payday loan laws by state. You can find this at:




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