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Brooklandville, a census-designated place located in Baltimore County, Maryland, is home to many people who require banking services. Most financial institutions offer an array of services to cater to their customers’ needs, one of which is payday loans.
Payday loans, also referred to as cash advances, allow borrowers to obtain a small amount of cash (usually less than $1000) in exchange for a post-dated check or an automatic withdrawal from their bank account. The loan must be paid back, along with a fee or interest charge, on the borrower’s next payday, hence the name ‘payday loan’.
Are Payday Loans Legal in Maryland?
Payday loans are illegal in Maryland. According to the Maryland Office of the Commissioner of Financial Regulation, payday lending is prohibited by state law.
Consumers who require financial assistance can explore alternatives like borrowing from banks or credit unions or applying for credit cards, installment loans or personal loans. However, residents of Brooklandville should be cautious of online lenders and other alternative financial service providers that may operate outside the law.
Why are payday loans banned in Maryland?
In Maryland, lawmakers enacted tough rules and regulations to govern the payday lending market, aimed at curbing the predatory lending practices employed by some lenders. These regulations are designed to protect consumers and prevent lenders from taking unfair advantage of borrowers looking for quick cash without fully understanding the implications of the payday loans they apply for. Here are some of the key reasons why payday loans are banned in Maryland:
- High APRs (annual percentage rates): Payday lenders charge incredibly high rates, often charging triple-digit APRs on their loans, which can escalate quickly if the loan is not repaid on time.
- Debt traps: Payday loans are designed so that borrowers will frequently take out another loan or rollover the existing loan, creating a cycle of debt and spiraling interest charges that can be difficult to break free from.
- Exploitation: Lenders often target low-income borrowers, who they know have limited financial alternatives, and aggressively market payday loans to them.
What are the Alternatives to Payday Loans in Brooklandville?
As noted earlier, payday loans are illegal in Maryland. However, there are many other options that Brooklandville residents can consider when they require financial assistance. Below are some common options that individuals can explore:
Credit Unions and Banks
Local credit unions and community banks in Brooklandville offer small loans to their members and customers. These loans generally have low interest rates and flexible repayment terms, making them an attractive option for those with good credit and steady income. Before applying for a loan, it is essential to check with credit unions and banks in the area to understand their loan offerings and eligibility requirements.
Alternative Personal Loans
Alternative lenders like TheGuaranteedLoans can help individuals connect with reputable lenders who offer personal loans with flexible repayment terms and low-interest rates. Such lenders evaluate the borrower’s credit history and financial stability to determine their eligibility for the loans. Since these lenders operate online, it is relatively easy for Brooklandville residents to apply for a loan from the comfort of their homes.
Credit Cards
Individuals with good credit scores can consider applying for a credit card as it offers easy and fast access to cash without exorbitant interest rates. Credit cards allow borrowers to borrow against their credit limit, and they have to repay the borrowed amount plus interest according to the credit card terms and conditions.
Government Assistance Programs
For individuals experiencing financial hardship, government assistance programs like Medicaid, Temporary Cash Assistance, and Food Supplement programs provide financial aid and support to eligible individuals.
Interesting Facts and Statistics on Payday Loans in Brooklandville, Maryland
- In Maryland, payday loans have been illegal since 2002.
- As of 2018, Maryland was one of 14 states and the District of Columbia that prohibited payday loans.
- Average lending rates for payday loans in Maryland exceeded 600% APR before payday loans were prohibited.
- A 2018 report showed that payday lenders were targeting vulnerable communities in Baltimore, offering high-cost loans to low-income families and communities of color.
Apply Now
If you need financial assistance, you can apply for a personal loan through TheGuaranteedLoans website. We offer a simple and quick application process that connects you to reputable lenders. Applying for a loan on our website is free, and it does not affect your credit score. We are a connector service, not a direct lender, and we facilitate the connection between potential clients and our network of reputable lenders. Apply for a personal loan today and get the financial aid you need!