Check Into Cash seems to be tweaking it’s payday lending business in a way that would allow it to charge higher interest rates and offer longer term loans, a move that could help it get around existing payday lending regulations. Could other payday lenders follow Check Into Cash’s lead? Blogger W. Bolton, summed it up nicely…
Why the change? Could it be because the state’s new law is supposed to go into effect by February? You know, the one that requires a database to track loans in an effort to end the industry’s practice of heaping multiple loans on people who can’t even afford the first one? Frankly, the law, which limits each borrower to one loan at a time but increases the maximum amount of a loan from $300 to $550, doesn’t go far enough to stop people from getting trapped in a cycle of debt.
The new law spoken of is a law implemented in South Carolina that would severely limit payday lenders’ ability to dump toxic short term loans onto debtors; but this move could have an impact on Texans. All over the nation, states have been clamping down on payday lenders’ predatory behavior. Apparently payday lenders have decided that they simply can’t take the heat and have decided that instead of playing by the rules, they will simple switch over to a less restricted playing field. The payday loan industry has made an art of simply changing their business model when they don’t like the rules put into place by state legislators.
We have said it before, but it is worth mentioning again. Taking out a payday loan is always a mistake. These loans on average have an interest rate of 400 percent and that’s not counting how out of control a loan can become if you don’t pay on time or miss a payment. If you need to take out a payday loan to survive financially, then it is probably time to consider bankruptcy.