What You Need to Know About Payday Loans in Tubac, Arizona
Although payday loans are prohibited in Arizona, many people still find themselves in need of emergency funds. Tubac, a beautiful historic town in the heart of Santa Cruz County, is no exception. In this article, we’ll discuss payday loans and why they are not a good financial tool for residents of Tubac.
Why Are Payday Loans Prohibited in Arizona?
Arizona state law prohibits payday loans because of the exorbitant interest rates and fees they charge. Prior to this legislation, payday lenders in Arizona could charge up to 459% APR on a $100 loan. This predatory lending practice led to many people falling into a cycle of debt and financial ruin.
The Cycle of Debt
Payday loans often trap borrowers in a cycle of debt. Here’s how it works:
- The borrower takes out a payday loan, which usually must be repaid in full within two weeks.
- If the borrower cannot repay the loan in full, the lender may offer to roll over the loan for an additional fee.
- With each rollover, the borrower accumulates more fees and interest.
- The borrower may end up paying more in fees and interest than the amount they originally borrowed.
- Unable to pay off the debt, the borrower takes out another payday loan to cover the expenses, continuing the cycle.
Alternatives to Payday Loans
Fortunately, there are alternatives to payday loans available to residents of Tubac.
Installment Loans
An installment loan is a type of loan that allows borrowers to repay the loan in fixed monthly installments over a longer term. Unlike payday loans, installment loans are not due in full on the borrower’s next payday. Installment loans often have lower interest rates and fees than payday loans, making them a more affordable option.
Credit Union Loans
Credit unions are not-for-profit financial cooperatives that offer loans and other financial services to their members at competitive rates. Many credit unions offer small-dollar loans with reasonable terms and interest rates, making them a good alternative to payday loans.
Interesting Facts and Statistics About Payday Loans in Tubac, Arizona
While payday loans are not legal in Arizona, that doesn’t mean that there isn’t a demand for them. Here are some interesting facts and statistics about payday loans in Tubac:
- According to a 2018 study by the Center for Financial Services Innovation, 32% of Arizona households are “financially vulnerable,” meaning they have difficulty covering basic living expenses like rent, food, and utilities.
- According to the same study, 22% of Arizona households have used a payday loan in the past five years.
- The average payday loan in Arizona is $255, with an average APR of 400%. Borrowers typically end up paying $75 in interest and fees for every $100 borrowed.
Apply Now
If you find yourself in need of emergency funds, TheGuaranteedLoans can help connect you with potential lenders. Keep in mind that we are a connector service, not a direct lender, and we do not make credit decisions. Our service is free, and the application process is quick and easy.
Visit our website today to learn more and fill out an online application. Our lenders have flexible repayment terms and may be able to offer you an installment loan with reasonable interest rates and fees.
Remember, payday loans may seem like a quick fix, but they can lead to long-term financial problems. Explore other options, like installment loans or credit union loans, before turning to payday lenders.