Pay Day Loans EXPOSED!!! Part One

You see the ads all the time- on TV, on the radio, on the Internet. You see the ad in which a broken arm with a cast is signing papers to take out a payday loan. You see headlines enticing you to "Get Cash in One Hour!";"98% Approval on Pay-Day Loans! No Fax or Credit Check. 2 Minute Application"; and reassuring you that "We Trust You- Cash for Your Signature!" Yes, your signature on a blank check!

These are ads to get you to use an easy and potentially very expensive way of raising cash- the origination of a "Pay Day Loan" or "Pay Check Advance". Payday loans are also known as cash advance, short term loans, payday advances, cash loans, fast cash, fast loans, bad credit loans, deferred deposit. These are short-term cash loans that usually require you, the borrower to grant electronic access of your bank account to the lender. The lender can then gain access to your paycheck, once it has been deposited into your account to get repaid. Payday loans are originated by: • Payday loan stores • Check cashing stores • Pawn shops • Some rent-to-own companies • Classified ads with toll-free telephone numbers • Companies working over the Internet

Why take out a Pay Day Loan?

Most of the time, Pay Day Loans are taken out due to an emergency situation requiring extra cash: car repairs, such as a flat tire that needs to be replaced; an unexpected medical bill; or an emergency home repair, such as a water pipe that bursts and must be replaced to avoid flooding the house. However, because the loans are so easy to obtain, it is tempting to fall into the trap of using the loans for non-emergency purposes, such as buying birthday or Christmas gifts, eating out at a restaurant, taking a vacation, etc. The typical Pay Day loan customer is a low to moderate income person who has bad credit or no credit, no savings, and lives from paycheck to paycheck or even from government check to government check. In some areas of Florida, the clientele is mostly Senior citizens on Social Security, who borrow money for holiday gifts for family members, prescription medicine not covered by government programs or insurance, or just to make ends meet. "Brick and Mortar" Pay Day loan stores spring up and proliferate around military bases and in economically disadvantaged neighborhoods. In the last year, there has been a literal EXPLOSION of these businesses on the Internet, as a way to get around laws passed by some states such as North Carolina and Texas, prohibiting or severely restricting these loans.