Payday loans, also known as cash advances, are short-term loans that are typically due on the borrower’s next payday. These loans are often marketed to individuals who need quick access to cash for unexpected expenses or emergencies. However, in Kelly, North Carolina, payday loans are prohibited.
What are payday loans?
Payday loans are loans that are typically due on the borrower’s next payday. These loans are usually for small amounts, usually $500 or less, and are often marketed to individuals who need quick access to cash for unexpected expenses or emergencies. While payday loans can be helpful in certain situations, they can also be expensive and lead to a cycle of debt.
Why are payday loans prohibited in Kelly, North Carolina?
Payday loans are prohibited in North Carolina because of the high fees and interest rates that these loans typically carry. In 2001, the state passed the North Carolina Consumer Finance Act, which made it illegal for lenders to make payday loans in the state.
The North Carolina Consumer Finance Act sets out a number of consumer protections, including limits on interest rates and fees for loans. Under the law, lenders cannot charge more than 36% interest on loans of $25,000 or less. Additionally, lenders cannot charge more than $15 in fees for every $100 borrowed. These protections help to ensure that borrowers are not subject to predatory lending practices.
What are the alternatives to payday loans in Kelly, North Carolina?
If you need quick access to cash in Kelly, North Carolina, there are several alternatives to payday loans that you should consider. Some of these alternatives include:
- Credit unions: Credit unions are not-for-profit financial institutions that offer loans, including small-dollar loans, to their members. Credit unions often offer lower interest rates and fees than traditional banks or payday lenders.
- Community assistance programs: Many communities have programs that provide emergency assistance to individuals in need. These programs may provide assistance with rent, utilities, or other expenses.
- Credit counseling: Credit counseling agencies can help individuals create a budget and manage their debts. These agencies may also provide educational resources and assistance with debt repayment.
Interesting facts and statistics about payday loans in Kelly, North Carolina
- In North Carolina, payday lending was illegal for 16 years before the national ban on these loans in 2020.
- The North Carolina attorney general’s office has received hundreds of complaints about payday lending practices in the state.
- A study found that in North Carolina, borrowers who took out payday loans were more likely to file for bankruptcy than those who did not.
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