The Truth About Payday Loans in Lebanon, Connecticut
If you are looking for short-term loans, you may have heard of payday loans. But before you consider getting a payday loan in Lebanon, Connecticut, there are some crucial things you need to know.
What are payday loans?
A payday loan is a type of loan that is usually due on your next payday. These loans are designed for people who need quick cash to cover unexpected expenses. In most cases, payday loans are smaller than traditional personal loans and can range from $50 to $1,000. However, in the state of Connecticut, payday loans are illegal.
How do payday loans work?
Payday loans work differently from other types of loans. When you take out a payday loan, you typically provide the lender with a post-dated check or authorization to debit your bank account on your next payday. The loan amount plus interest and fees will be deducted from your account automatically. However, in Connecticut, lenders are prohibited from offering payday loans to consumers.
Why are payday loans illegal in Connecticut?
In 2010, Connecticut passed a law that made it illegal for payday lenders to operate in the state. The law was passed to protect Connecticut residents from the high-interest rates and fees associated with payday loans. The law also prevents payday lenders from charging more than 30% per annum interest on consumer loans under $15,000.
What are the alternatives to payday loans?
If you are in need of cash, there are some alternatives to payday loans that you can consider. These include:
- Personal loans: You can apply for a personal loan at your bank or credit union. Personal loans are typically larger than payday loans, and interest rates are much lower.
- Credit cards: If you have good credit, you may qualify for a credit card with a 0% introductory APR. You can use the credit card to cover your expenses and pay it off before the introductory period ends.
- Borrow from family or friends: If you have a good relationship with your family or friends, you may consider borrowing money from them.
Interesting Facts and Statistics About Payday Loans in Lebanon, Connecticut
- Payday lending is illegal in Connecticut
- The state limits the interest rate to protect consumers from high-interest rates and fees
- In 2016, the Consumer Financial Protection Bureau (CFPB) fined a payday lender over $5 million for deceiving customers in Connecticut and other states with illegal high-interest loans
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