What You Need to Know About Payday Loans in Kempton, Pennsylvania
Payday loans are a type of short-term loan that typically require the borrower to repay the amount borrowed, plus interest and fees, on their next payday. In Kempton, Pennsylvania, however, these types of loans are actually prohibited by state law. Understanding the laws surrounding payday loans in Kempton, Pennsylvania is important, so let’s take a closer look.
Payday Loans: Prohibited in Kempton, Pennsylvania
In many states across the US, payday loans are a common option for those looking to borrow money quickly. However, in Kempton, Pennsylvania, payday loans are actually prohibited by state law.
The state of Pennsylvania has strict regulations on lending, which are enforced in Kempton. Under the Pennsylvania Department of Banking and Securities, lenders in Kempton are prohibited from charging an Annual Percentage Rate (APR) greater than 24 percent on loans under $25,000.
While payday loans may seem like an attractive option due to their potential to supply funds quickly, borrowers should be cautious. With interest rates and fees that can exceed the original loan amount, payday loans can quickly become expensive and detrimental to a borrower’s financial health.
Alternatives to Payday Loans in Kempton, Pennsylvania
While payday loans are not a legal option in Kempton, there are several alternatives that can help individuals get the funds they need:
- Credit cards: If possible, a credit card may be a better option than a payday loan. Credit cards typically have lower interest rates than payday loans, and may offer rewards or cashback benefits as well.
- Personal loans: Personal loans may be an option if you need to borrow a larger sum of money. With longer repayment terms and lower interest rates than payday loans, personal loans can be a more manageable option for some borrowers.
- Side jobs or gigs: While it may take more time and effort, finding a side job or gig can be a better alternative to payday loans. This could include freelance work, part-time jobs, or even selling items you no longer need.
Facts and Statistics on Payday Loans in Pennsylvania
Despite the fact that payday loans are illegal in Kempton and throughout the state of Pennsylvania, some may still try to pursue these types of loans. Here are some facts and statistics to keep in mind:
- Between 2010 and 2016, Pennsylvania lost approximately $1.3 billion in fees, overdrafts, and other charges due to payday lending.
- While payday loans may be illegal in Pennsylvania, some lenders may still try to offer these services online. It is important to be cautious and research any potential lenders before submitting an application or providing personal information.
- According to a report by the Pew Charitable Trusts, approximately 12 million Americans take out payday loans each year, with the average borrower taking out eight loans per year.
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