Understanding Payday Loans in Ringtown, Pennsylvania
Nobody wants to be in a situation where they are strapped for cash. Life is unpredictable, and we can find ourselves in need of financial help at any given moment. In such situations, individuals may consider turning to payday loans as a quick and easy source of money. However, in Pennsylvania, payday loans are illegal, and this includes Ringtown.
What are Payday Loans?
Payday loans are small, short-term loans that are typically due on the borrower’s next payday. The loans come with high-interest rates, usually with triple-digit percentages, to make the lender’s risk more bearable since the loans are usually advanced without collateral. Such interest rates can be as high as 300%. Since payday loans are disbursed quickly and have few requirements, they are an easy-to-access source of funds when one has a short-term emergency.
How do Payday Loans Work?
To take out a payday loan in Ringtown, Pennsylvania, the borrower typically writes a postdated check for the loan amount and all fees to the lender, usually dated two weeks into the future or on their next payday. The lender then advances the borrower the money minus the fees. The borrower agrees to pay the loan back on the due date, which includes the principal and the fees, or provide the lender with another postdated check. If the borrower fails to repay the loan, the lender can cash the postdated check, leading to overdrafts and related bank charges. The lender may also sue the borrower, which may result in wage garnishment and other financial damages.
Why are Payday Loans Prohibited in Ringtown, Pennsylvania?
Payday loans are illegal in Pennsylvania, including Ringtown, because they were shown to exploit financially vulnerable individuals and families. Payday lending charges sometimes reach usurious rates, which trap borrowers in a cycle of debt, as they take out additional loans in an attempt to repay the original loans, usually borrowing more than they needed to meet the original financial crunch. The state of Pennsylvania recognized the damage that came from payday lending and chose to outlaw payday loans to protect its citizens from being caught up in predatory lending practices.
Alternative Loan Options in Ringtown
While payday loans are illegal in Ringtown, there are other options available for people in need of quick cash. Some of the alternatives include:
- Personal Loans: These are typically small loans that can be offered by credit unions, online lenders, or banks. The loans come with a fixed interest rate and payment term, allowing for predictable payments over a set period.
- Credit Card Cash Advances: If you have a credit card, you may be able to take a cash advance. The interest on cash advances is high, but still lower than most payday loans.
- Negotiation with creditors: If you’re experiencing financial difficulties, you can negotiate with your creditors for a payment plan or extended payment terms. Some utility companies or other organizations will offer payment plans if you get in touch with them first.
- Emergency Assistance: Churches and community organizations may offer emergency assistance, including food, shelter, and cash loans. For example, the Ringtown Area Food Pantry & Outreach provides food and other assistance to qualified individuals or families.
Interesting Facts about Payday Loans in Ringtown, Pennsylvania
- Ringtown is a small borough in Schuylkill County, Pennsylvania, with a population of about 600 residents.
- In 2008, Pennsylvania passed a law prohibiting payday lenders from operating in the state.
- According to a report by the Center for Responsible Lending, the average payday loan borrower in Pennsylvania takes out 12 payday loans per year, paying $459 in fees alone.
- The same report showed that payday lenders drain more than $513 million from Pennsylvania residents each year.
Apply Now
While we do not offer payday loans in Ringtown, TheGuaranteedLoans offers a free referral service for people in need of personal loans. We connect loan borrowers to our network of reliable licensed lenders, who may offer lower interest rates than payday loans. If you need help with a small personal loan, complete our online application, and we’ll help you find the loan you need to finance your emergency expenses. Remember, we are a connector service, not a direct lender, and we will facilitate your connection with potential lenders that can help you.