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In Essex Fells, New Jersey, people might wonder if payday loans are an option when they are in dire need of cash. However, payday loans are illegal in New Jersey because of the high interest rates and fees that make them predatory and exploitative.
What are payday loans?
For people who are unable to get a bank loan or a credit card, payday loans are small short-term loans meant to cover an emergency expense until the borrower can receive their next paycheck. Usually, payday loans have a two-week term and can be obtained easily even if the borrower has a bad credit score. However, since payday loans are designed to be repaid in full on the borrower’s next payday, they often come with usurious interest rates and fees as high as 400% APR.
The biggest problem with payday loans is that they make it difficult for borrowers to repay the loan on time and end up stuck in a cycle of debt. When lenders charge high fees and interest, the amount that the borrower owes quickly becomes unaffordable, especially if they are already living paycheck to paycheck.
Why are payday loans prohibited in New Jersey?
The New Jersey Department of Banking and Insurance prohibits payday loans in the state due to the predatory nature of payday lending. New Jersey wants to protect its residents from falling prey to payday lenders who charge exorbitant fees and interest rates that are difficult to pay back.
The New Jersey Truth in Consumer Contract, Warrant and Notice Act (TCCWNA) also prevents lenders from slipping illegal terms into their contracts and can lead to civil penalties.
Are there any alternatives to payday loans in Essex Fells, New Jersey?
If you are in need of cash, there are other alternatives to payday loans in Essex Fells, New Jersey. Some alternatives include:
- Credit union loans: Credit unions offer low-interest loans to their members. To join a credit union, you must meet certain criteria such as working in a specific industry or living in a certain area.
- Credit counseling: A credit counselor can work with you to create a budget and a debt repayment plan.
- Personal loans: Personal loans are offered by banks, credit unions, and other types of lenders. They have longer repayment terms and lower interest rates than payday loans.
- Credit cards: Credit cards can be a good option if you can pay off the balance in full each month. They often have lower interest rates than payday loans.
Interesting facts and statistics about payday loans in Essex Fells, New Jersey
- The percentage of families living below the poverty level in Essex Fells is 2.6%, lower than the New Jersey average of 7.4%.
- In 2018, New Jersey limited interest rates on loans with a maximum APR of 30%. This regulation has helped protect consumers from predatory lending practices.
- A report from the National Consumer Law Center found that in states with less regulation on payday loans, borrowers paid double the amount in fees than in states with strong payday lending laws.
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TheGuaranteedLoans website is not a direct lender, but we can help you connect with potential lenders who offer personal loans. If you are in need of cash, please fill out our online application to see if you prequalify for a loan. One of our qualified lenders will then contact you regarding the loan options available to you.
Please be aware that payday loans in New Jersey are illegal and TheGuaranteedLoans only offers personal loans. If you have any questions or concerns, please contact us via our website or call us to learn more about our services.