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Business Loan Overview of Payday Loans in West Millbury, Massachusetts
When you need fast cash to cover an unexpected expense, you may consider applying for a payday loan. However, if you live in West Millbury, Massachusetts, you should know that payday loans are prohibited by state law. Despite this, many payday loan lenders operate illegally and prey on vulnerable individuals who are in need of money.
What Are Payday Loans?
Payday loans are short-term, high-interest loans that are typically due on the borrower’s next payday. The borrower writes a post-dated check to the lender for the loan amount plus interest and fees. On the due date, the lender cashes the check or debits the borrower’s bank account. If the borrower cannot repay the loan in full, the lender may offer to refinance or rollover the loan, which extends the due date but adds additional interest and fees.
Why Are Payday Loans Prohibited in Massachusetts?
In 2008, Massachusetts passed the Small Loan Act, which placed a cap on consumer loans under $6,000 with a maximum annual interest rate of 23%. This law effectively banned payday loans because they typically charge interest rates of 300% or more. The goal of the law was to protect consumers from the predatory lending practices of payday loan lenders.
How Do Payday Loan Lenders Operate Illegally in West Millbury?
Despite the prohibition on payday loans in Massachusetts, some lenders still operate illegally by offering loans online or through tribal lenders. These lenders may not be subject to Massachusetts law and can charge exorbitant interest rates and fees. They may also use aggressive collection tactics to recoup their money if the borrower defaults on the loan.
The Dangers of Payday Loans
Payday loans can be a dangerous financial product for many reasons:
- High interest rates and fees can trap borrowers in a cycle of debt.
- The short repayment period can make it difficult for borrowers to repay the loan in full.
- The lender may have access to the borrower’s bank account, which can lead to overdraft fees and other financial problems.
- Payday loan lenders may use aggressive collection tactics, such as harassing phone calls and threatening legal action, to recoup their money.
Interesting Facts and Statistics about Payday Loans in West Millbury, Massachusetts
Did you know that:
- 45% of payday loan borrowers in Massachusetts have an annual income of less than $25,000.
- The average payday loan borrower in Massachusetts takes out 8 loans per year.
- Payday lenders in Massachusetts made $677 million in loans in 2015.
Apply Now to Connect with Lenders
While payday loans are prohibited in Massachusetts, there are other lending options available if you need fast cash. TheGuaranteedLoans can help connect you with potential lenders who offer personal loans, installment loans, and other types of financing. Our online application process is simple and secure, and we work with a network of reputable lenders who abide by state and federal lending laws. Fill out our application today to get started!