Payday loans are small, short-term loans that are often used to cover unexpected expenses. However, in the state of Pennsylvania, payday loans are illegal. This means that residents of Sheppton, Pennsylvania, cannot obtain a payday loan within the state.
Why are payday loans illegal in Pennsylvania?
Payday loans are a controversial topic across the United States, with some states allowing them and others heavily regulating or outright banning them. In Pennsylvania, lawmakers believed that payday loans were trapping borrowers in a cycle of debt and causing financial harm.
In 2010, the Pennsylvania legislature passed a law effectively prohibiting payday loans. The law caps the annual interest rate on small loans at 24%, which effectively prevents payday lenders from operating in the state.
What are the alternatives to payday loans in Sheppton, Pennsylvania?
If you’re in need of quick cash in Sheppton, Pennsylvania, and a payday loan isn’t an option, there are other alternatives:
- Credit unions: Many credit unions offer small loans with more favorable terms than payday loans. You’ll typically need to be a member of the credit union to be eligible for a loan.
- Personal loans: Personal loans are often available through traditional banks and online lenders. While the application process can take longer than a payday loan, personal loans generally have lower interest rates and more favorable terms.
- Credit cards: If you have a credit card with available credit, you can use it to cover unexpected expenses. Just be aware that credit card interest rates can be high if you carry a balance.
Why should you avoid payday loans?
While it can be tempting to take out a payday loan when you’re in a financial bind, these loans come with a high cost. In addition to being illegal in Pennsylvania, payday loans often have interest rates that are much higher than other forms of credit.
If you take out a payday loan, you may find yourself in a cycle of debt that’s difficult to escape. According to research from Pew Charitable Trusts, the average payday loan borrower takes out eight loans of $375 each per year and spends $520 on interest. This means that the borrower is spending more than $1,000 to borrow just $3,000.
Interesting facts and statistics about payday loans
- 12 million Americans take out payday loans each year.
- The average payday loan is $375.
- Payday loans have an average interest rate of 391% APR.
- Payday loan borrowers are more likely to file for bankruptcy than those who don’t take out payday loans.
- 23% of payday loan borrowers default on their loan.
- Payday loan stores outnumber McDonald’s locations in the United States.
Apply Now
If you need quick cash in Sheppton, Pennsylvania, and a payday loan isn’t an option, consider applying for a personal loan through TheGuaranteedLoans website. We are a connector service that can help you find a lender that meets your needs. Keep in mind that personal loans may have lower interest rates than payday loans and more favorable terms.
Fill out our online application today to get started. Remember, we are a connector service and not a direct lender. We will facilitate your connection with potential lenders and help you find the best loan for your needs.