Payday Loans: Why They Are Prohibited In Waterbury Center, Vermont
If you’re in a bind and need cash fast, payday loans might seem like a quick solution. But if you live in Waterbury Center, Vermont, you’re out of luck. Payday loans are prohibited in Vermont. Here’s why.
What Are Payday Loans?
Payday loans are short-term loans that typically come with high interest rates and fees. They are often used by people who need cash quickly but don’t have access to other forms of credit or who have poor credit histories.
The loans are usually for small amounts, such as a few hundred dollars, and are meant to be repaid on the borrower’s next payday. However, because of the high fees and interest rates, many people end up rolling over the loan, meaning they pay even more fees and interest.
While payday loans are legal in many states, Vermont is one of 18 states that has prohibited them.
Why Are Payday Loans Prohibited in Vermont?
In 2012, the Vermont state legislature passed a law prohibiting payday loans. The law was designed to protect Vermont residents from the high interest rates and fees associated with these loans.
Before the law was passed, Vermont had no cap on the interest rates that payday lenders could charge. As a result, borrowers could end up paying interest rates as high as 500% or more.
The new law prohibited payday loans and created a cap on interest rates for other consumer loans at 18%. This made it much harder for payday lenders to operate in Vermont.
Alternatives to Payday Loans
If you’re in need of cash and live in Waterbury Center, Vermont, there are still options available to you. Here are some alternatives to payday loans:
- Credit union loans: If you’re a member of a credit union, you may be able to qualify for a small-dollar loan with reasonable terms and interest rates.
- Personal loans: You may be able to qualify for a personal loan from a bank or online lender. These loans typically have lower interest rates than payday loans.
- Credit card cash advance: While not ideal, a credit card cash advance may be a better option than a payday loan if you have no other alternatives.
- Government programs: Depending on your situation, you may be eligible for government assistance programs that can provide financial assistance.
Interesting Facts and Statistics about Payday Loans in Waterbury Center, Vermont
While payday loans are prohibited in Vermont, that doesn’t mean they aren’t a problem in other states. Here are some interesting facts and statistics about payday loans in the U.S.:
- 12 million Americans take out payday loans each year.
- The average payday loan borrower takes out eight loans per year.
- The average payday loan in the U.S. is $375 and carries an average fee of $55.
- Payday loan borrowers are more likely to file for bankruptcy than people who don’t use payday loans.
- Payday loans are the most expensive form of consumer credit, with interest rates as high as 400% or more.
Apply Now
If you’re in need of cash and live in a state where payday loans are legal, TheGuaranteedLoans can help you find a lender. We are not a direct lender, but we are a connector service that can help you find a reputable lender who can provide you with the cash you need. Simply fill out our online application and we’ll match you with a lender who meets your needs.
Remember, payday loans should only be used as a last resort. Before you take out a payday loan, explore all your other options and make sure you’re aware of all the fees and interest rates associated with the loan.