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Business Loan Understanding Payday Loans in Rocky Ridge, Maryland
Payday loans are a short-term loan option that is typically used to cover unexpected expenses or bridge the gap between paychecks. In Rocky Ridge, Maryland, payday loans are prohibited by state law. Despite their illegality, many people continue to seek out payday loans as a means of securing quick cash. Let’s dig deeper into what payday loans are, why they are prohibited in Maryland, and what alternatives Rocky Ridge residents can use instead.
How do Payday Loans Work?
Payday loans are typically small-dollar loans that are due in full when the borrower’s next paycheck arrives. In order to secure a payday loan, you must provide the lender with proof of income and a post-dated check or authorization to withdraw funds from your bank account on the due date.
While this may sound simple, payday loans come with incredibly high fees and interest rates. In fact, the average interest rate on a payday loan is 391% APR. For many borrowers, this led to a cycle of debt that is difficult to break free from.
Why are Payday Loans Prohibited in Maryland?
In 2002, Maryland passed a law that prohibited payday lenders from operating in the state. This was due to concerns over the high fees and interest rates associated with payday loans, which were leading many borrowers into financial difficulties.
Instead of payday loans, Maryland lawmakers encouraged consumers to seek out safer and more affordable loan options. Unfortunately, many residents of Rocky Ridge may still be unaware that payday loans are illegal, and may fall victim to predatory lending practices.
What Alternatives do Rocky Ridge Residents have?
There are several safe and affordable loan options available to Rocky Ridge residents.
- Personal Loans: Personal loans are a type of unsecured loan that doesn’t require collateral and usually have lower interest rates than payday loans. You can find personal loans at banks, credit unions, and online lenders.
- Credit Cards: If you need to cover a smaller expense, credit cards may be a good option. Many credit cards offer 0% APR on purchases for an introductory period, which can provide a period of interest-free borrowing.
- Emergency Assistance Programs: Many nonprofit organizations and government agencies offer emergency assistance programs that can help eligible residents with food, rent, utilities, and other essential expenses.
Interesting Facts and Statistics About Payday Loans in Rocky Ridge, Maryland
- According to a report by the Center for Responsible Lending, payday loan borrowers in Maryland paid over $1.7 billion in fees between 2005 and 2018.
- In 2019, Maryland lawmakers attempted to pass a bill that would allow payday lenders to operate in the state under certain conditions. However, the bill did not pass.
- Payday lending is only legal in 32 states in the U.S.
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While payday loans are not legal in Maryland, we at TheGuaranteedLoans can help connect you with lenders that offer other types of loans that may better fit your needs. As a connector service, we work with a network of trusted lenders that offer personal loans, installment loans, and other loan options.
To get started, simply fill out our secure online application. Once you submit your application, we will work to connect you with the best lender for your needs. Remember, always borrow responsibly and only borrow what you can afford to repay.
At TheGuaranteedLoans, we are committed to helping our customers find the best loan options available to them. Contact us today to learn more about our loan connection services.