Understanding Payday Loans in Arona, Pennsylvania
Payday loans are popular financial products that provide a quick influx of cash for those facing a financial emergency. These loans are short-term in nature and are usually required to be paid back in full within a few weeks or months, along with any interest and fees associated with the loan. However, it is essential to understand that payday loans are prohibited in Pennsylvania, including Arona.
Why are payday loans illegal in Pennsylvania?
In the state of Pennsylvania, payday lenders are prohibited from operating physical locations. This is because the state’s criminal usury law caps the annual percentage rate (APR) on loans at 6%. Payday loans are known to have very high APRs, often in the triple-digits, which makes them illegal in Pennsylvania.
Additionally, the state government believes that these types of loans can be predatory, targeting borrowers who may not be able to pay back the loan on time, which then leads to an ongoing cycle of debt. This can also harm the state’s economy, as many borrowers end up defaulting on these loans, leading to financial distress and even bankruptcy for some.
Alternatives to Payday Loans in Arona, Pennsylvania
Even though payday loans are prohibited in Arona and the rest of Pennsylvania, that does not mean that borrowers do not have access to other forms of credit. Some good alternatives to payday loans include:
- Credit Union Loans: Credit unions are known to offer affordable loans at much lower interest rates than payday loans. This is because they are not-for-profit organizations that exist to serve their members rather than to make a profit.
- Personal Loans from Banks: Borrowers can also opt for personal loans from banks or online lenders, which can offer lower interest rates and more flexible repayment options. However, they often have stricter eligibility criteria and longer approval times.
- Credit Card Cash Advances: Credit card cash advances are another option, although they come with higher interest rates than a standard credit card purchase.
Interesting Stats & Facts
Despite payday loans being illegal in Pennsylvania, it is still interesting to note that:
- According to a Pew Charitable Trusts research, 12 million people use payday loans each year in the United States.
- Pennsylvania is one of 18 states that have banned payday lending entirely.
- In 2018, the average payday loan borrower had an income of approximately $30,000 per year.
- The typical payday loan is $375 and carries an average fee of $55 for each two-week loan term.
Apply Now
Are you currently facing a financial emergency in Arona, Pennsylvania? While payday loans are not accessible, we can help connect you with potential lenders for other forms of credit. TheGuaranteedLoans is a connector service that will facilitate your connection with potential lenders. Apply online now and see if we can connect you with a lender that meets your financial needs.