When in need of fast cash, payday loans may seem like the perfect solution. However, residents of Columbus, Pennsylvania should take note that payday loans are prohibited in the state. In this article, we’ll discuss what payday loans are, why they’re prohibited in Pennsylvania, and alternative solutions for anyone in need of a quick financial fix.
The Basics of Payday Loans
A payday loan is a short-term loan that is typically due on the borrower’s next payday. This type of loan is usually up to $500 and comes with a high interest rate. In some states, the interest rate can be as high as 400%. To get a payday loan, the borrower must provide proof of income and a post-dated check, which will be cashed on the due date of the loan. If the borrower is unable to pay back the loan on time, they may roll it over by paying additional fees.
Why Payday Loans are Prohibited in Pennsylvania
In 2018, the Pennsylvania Attorney General’s office finalized a settlement agreement with Think Finance, a payday loan provider that used Native American tribes as a front for their operations. The settlement led to the cancellation of all debts owed by Pennsylvania residents to Think Finance, as well as a ban on the company from lending in the state. This settlement was a victory for the state’s fight against predatory lending practices.
It’s important to note that payday loans, even from lenders that are not engaged in illegal practices, are prohibited in Pennsylvania due to the state’s laws. The Pennsylvania Department of Banking and Securities states that “Payday lending is prohibited in Pennsylvania and a violation of the Consumer Discount Company Act”.
Alternative Solutions for Quick Cash
While payday loans may offer a quick solution for those in need of cash, there are alternative solutions available that don’t come with the risk of predatory lending practices or high interest rates. Here are a few possible options for residents of Columbus, Pennsylvania:
- Credit Cards: For those with good credit, a credit card may be a good option to cover unexpected expenses. Credit cards come with lower interest rates than payday loans and can be used for a variety of purchases.
- Personal Loans: A personal loan may be a good option for those in need of a larger amount of cash. Personal loans typically come with lower interest rates than payday loans and can be used for a variety of expenses.
- Community Resources: Local community organizations may offer assistance with financial needs. This may include community-based loan funds or grants.
Interesting Facts and Statistics about Payday Loans in Columbus, Pennsylvania
- Payday loans are prohibited in Pennsylvania due to the state’s Consumer Discount Company Act.
- Think Finance, a payday loan provider that used Native American tribes to front their operations, was banned from offering loans in Pennsylvania.
- The average payday loan borrower takes out 10 loans per year and spends 199 days in debt annually.
- In states where payday lending is legal, the average interest rate on a payday loan is 400%.
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While TheGuaranteedLoans does not offer payday loans, we are a connector service that can help you find a lender who can meet your financial needs. Fill out our online application today and we’ll connect you with potential lenders who may be able to offer alternative solutions to payday loans. Please note that TheGuaranteedLoans is not a direct lender and does not make credit decisions.