Payday Loans in Penns Creek, Pennsylvania: Why They are Prohibited and What You Need to Know
If you are in Penns Creek, Pennsylvania, and need cash quickly, you may be tempted to turn to a payday loan. However, before you do, it’s important to understand that payday loans are prohibited in Pennsylvania. In this article, we will explain what payday loans are, why they are illegal in Pennsylvania, and what alternatives you can explore instead.
What are Payday Loans?
Payday loans are short-term loans intended to tide borrowers over until their next paycheck. These loans typically come with high-interest rates and fees, making them an expensive option for those who need cash quickly.
To get a payday loan, borrowers submit a postdated check or provide their bank account information to the lender. The lender will then give the borrower cash, minus the fees and interest, and the loan is due on the borrower’s next payday.
Why are Payday Loans Prohibited in Pennsylvania?
Pennsylvania, along with 16 other states, has made payday lending illegal. The state’s usury law caps interest rates at 6% for loans under $50,000, which makes payday lending impossible as these loans tend to have rates of 400% or higher.
Payday lending has faced criticism for trapping vulnerable borrowers in cycles of debt, where they have to repeatedly borrow to pay off previous loans. These loans are designed to be repaid in full on the borrower’s next payday, which often leaves borrowers with insufficient funds to pay their bills and other expenses, leading them to take out new loans and repeat the cycle.
What Alternatives are Available?
If you need cash quickly in Penns Creek, there are alternatives to payday loans. Some options to consider include:
Credit Union Loans: Many credit unions offer small-dollar loans with reasonable interest rates and fees. Some even offer payday loan alternatives specifically designed to help borrowers avoid payday lending.
Credit Card Cash Advance: While not an ideal option, a credit card cash advance can be less expensive than a payday loan. However, be aware that interest rates on these advances tend to be higher than regular purchases, and there may also be cash advance fees.
Assistance Programs: You may be eligible for assistance programs in Penns Creek, such as the Low-Income Home Energy Assistance Program or the Supplemental Nutrition Assistance Program, which can provide financial assistance for various needs.
Interesting Facts and Statistics about Payday Loans
- In 2019, payday lenders in Pennsylvania charged annual interest rates of up to 615% on payday loans, according to the Pennsylvania Attorney General’s office.
- On average, borrowers take out eight payday loans per year, with an average loan amount of $375, according to Pew Charitable Trusts.
- In 2018, the payday lending industry made $9.4 billion in fees alone, according to the Center for Responsible Lending.
Apply Now
If you need financial assistance, consider filling out an online application on TheGuaranteedLoans website. We work with a network of lenders who may be able to help you get the cash you need quickly. Keep in mind that TheGuaranteedLoans is not a direct lender but rather a connector service, and the lenders we work with will have their own eligibility requirements, interest rates, and fees.
Conclusion
While payday loans may seem like an easy and quick solution to your financial troubles, they can do more harm than good. In Pennsylvania, payday loans are illegal, but there are alternatives available that can help you get the cash you need without falling into a cycle of debt. Remember to explore all your options, read the terms and conditions carefully, and only borrow what you can afford to repay.