In State Road, North Carolina, payday loans are prohibited by law. However, that doesn’t stop some lenders from offering them, which can put borrowers in a precarious financial situation.
What Are Payday Loans?
Payday loans are short-term loans that typically have high interest rates and fees. They are often marketed to people who need cash quickly and have limited options for borrowing money. Typically, borrowers write post-dated checks or authorize an electronic withdrawal from their bank account for the amount borrowed plus the fees. If they can’t repay the loan on time, they may incur additional fees and interest charges.
In North Carolina, payday lending is prohibited under the North Carolina General Statutes § 53-281 and the North Carolina Consumer Finance Act. While payday lenders cannot operate in the state, consumers may be tempted to turn to online payday lenders who claim to be based in another state or country that allow payday lending. However, these lenders are often not licensed to do business in North Carolina, which means they are not bound by the same laws that protect consumers.
What Are the Risks of Payday Loans in North Carolina?
Payday loans can be a risky financial decision for borrowers. The high interest rates and fees can quickly trap borrowers in a cycle of debt, where they borrow more money to pay off the original loan. In North Carolina, payday loans are especially risky because they are often offered by unlicensed lenders who operate outside the state’s consumer protection laws. This means that borrowers may not have legal recourse if they are treated unfairly or charged exorbitant fees or interest rates.
As with any financial decision, it’s important to carefully consider all of your options before taking out a loan. In North Carolina, there are several alternative options for borrowing money, including:
- Personal loans from banks or credit unions
- Credit card cash advances
- Installment loans
- Community assistance programs
These options may have lower interest rates and fees than payday loans, and they are subject to North Carolina’s consumer protection laws.
Interesting Facts about Payday Loans in North Carolina
- In 2001, North Carolina became the first state to put an end to payday lending by making it illegal.
- The average payday loan borrower in North Carolina takes out 10 loans per year.
- The average payday loan in North Carolina is for $300 and carries an Annual Percentage Rate (APR) of 391%.
- Between 2001 and 2010, North Carolina saved its citizens an estimated $457 million in fees and interest charges by banning payday lending.
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While payday loans are prohibited in North Carolina, consumers may still find themselves in need of cash quickly. If you need to borrow money, consider alternative options like personal loans, credit card cash advances, or installment loans.
If you decide that one of these options is right for you, TheGuaranteedLoans can help connect you with potential lenders. We are a connector service, not a direct lender, which means we work with a network of lenders to help you find the right loan for your needs. Our online application is quick, easy, and secure.
Apply now to get started on your loan search. Remember, it’s important to carefully consider all of your options before borrowing money and to only take out a loan that you can afford to repay.