Understanding Payday Loans in Breezewood, Pennsylvania
Payday loans are short-term loans that have high-interest rates and are meant to be repaid by the borrower’s next paycheck. While payday loans are popular in many areas, it is important to note that payday loans are prohibited in Pennsylvania according to the Pennsylvania Department of Banking and Securities.
Why Are Payday Loans Prohibited In Pennsylvania?
The commonwealth of Pennsylvania has passed laws to prohibit lenders from offering payday loans as a means of protecting consumers from unscrupulous lenders. These lenders often charge exorbitant interest rates that can trap borrowers in a cycle of debt.
In the past, payday lenders in Pennsylvania would try to bypass the usury laws by establishing their business in other states or affiliating with Native American tribes. However, the state saw through these tactics and created stronger laws and regulations to protect its residents.
What are the Alternatives?
Just because payday loans are prohibited in Pennsylvania does not mean that those in need of quick cash have no other options. In fact, many alternatives exist for those seeking short-term solutions.
- Credit unions: Many credit unions offer small dollar loans to their members. These loans usually have a lower interest rate and more flexible repayment terms than payday loans.
- Personal loans: Personal loans from banks or online lenders can also be an option for those seeking quick cash. These types of loans usually come with a lower interest rate than payday loans and have more predictable repayment schedules.
- Credit counseling: Credit counseling services can help individuals create a budget and find ways to manage their finances without resorting to payday loans.
Why You Should Avoid Payday Loans?
Payday loans often come with high-interest rates and fees that can add up quickly. The interest rate on a payday loan can be as high as 400%, and many borrowers end up taking out additional loans just to keep up with the fees.
In addition to the high costs, payday loans can also lead to a cycle of debt. If a borrower cannot repay the loan on time, they often take out another loan to cover the previous loan, and so on.
Interesting Facts and Statistics about Payday Loans in Breezewood, Pennsylvania
- Payday loans are prohibited in Pennsylvania, including Breezewood.
- According to the National Conference of State Legislators, 14 states and the District of Columbia have prohibited payday lending.
- In 2016, the average payday loan fee in Pennsylvania was $23.53 per $100 borrowed.
- In 2015, the average payday loan borrower in Pennsylvania took out 8 loans in a year, with an average loan amount of $348.
Apply Now at TheGuaranteedLoans
While payday loans are prohibited in Pennsylvania, TheGuaranteedLoans can still help connect you with lenders who offer alternatives such as personal loans. Fill out our online application today to get started. Remember, we are not a direct lender, but a service to help connect you with potential lenders.
Note: All lending decisions are determined by individual lenders and are based on factors such as credit history, income, and debt-to-income ratio.