While payday loans may be a common way to get quick cash, it is important to note that they are currently illegal in the state of Pennsylvania, including in the town of Loyalhanna. Payday loans are defined as short-term, high-interest loans that require borrowers to pay back the loan plus fees by their next payday. In Pennsylvania, the state legislature has decided to protect consumers by prohibiting predatory payday lending.
What is the law in Pennsylvania regarding payday loans?
In October of 2018, Pennsylvania’s Payday Lending Prohibition Act came into effect. This law prohibits payday loan providers from operating in the state. Previously, payday lenders had been able to operate through loopholes in state law by registering as check cashers or by partnering with out-of-state banks. The Payday Lending Prohibition Act closed these gaps and set the maximum loan amount at $0, effectively making payday loans illegal in Pennsylvania.
Why are payday loans illegal in Pennsylvania?
The state legislature and consumer advocates have argued that payday loans trap vulnerable consumers in cycles of debt. The structure of a payday loan, which requires repayment within two weeks, can make it difficult for borrowers to come up with the necessary funds in time without rolling over the loan. Rolling over a loan means extending the loan for a fee, which can keep borrowers in debt for months or even years. Additionally, the high interest rates and fees on payday loans can cause borrowers to end up paying back significantly more than they borrowed in the first place.
What alternatives are available to borrowers in Loyalhanna?
Fortunately, there are alternatives to payday loans for borrowers in Loyalhanna who need quick cash. First, borrowers should explore traditional bank loans or credit union loans, which typically offer lower interest rates and longer repayment terms. Additionally, borrowers may be able to receive a cash advance from their employer or use a credit card to cover the expense. For those who are in immediate need of funds, there are also local programs that can provide assistance with food, housing, and utility bills.
Interesting facts about payday loans in Pennsylvania
- Pennsylvania’s Payday Lending Prohibition Act went into effect in 2018
- Before the law went into effect, payday lenders were able to operate in Pennsylvania
- Payday loans trap borrowers in cycles of debt due to high fees and short repayment terms
- Pennsylvania consumers saved an estimated $234 million per year after payday lending was prohibited in 2018
Apply now for a loan with TheGuaranteedLoans
While payday loans are prohibited in Loyalhanna and throughout Pennsylvania, there may be other options available. TheGuaranteedLoans is a connector service that can help match borrowers with potential lenders who offer a variety of loan types, including personal loans and installment loans. We work with a network of trusted lenders who operate in compliance with state and federal laws to ensure safe and fair lending practices. Contact us today to explore your options for fast cash.