Pay Day Loans - Myth VS Reality

MYTH : Payday loan stores charge the hghest fees.

FACT: Many times the payday loan store beats the cost of credit card late fees, overdraft fees, and reconnect fees.

• An overdraft at your bank probably costs twice as much as the cost of $100 payday loan.
• The actual APR (annual percentage rate) is lower on a fast cash loan than other customer alternatives.
• 391% APR - $100 payday advance with $15 fee.
• 1,251% APR -$100 bounced check with $48 NSF/ merchant Fees
• 678% APR$100 credit card balance with $26 late fee
• 1,304% APR$100 utility bill with $50 late/reconnect fees

MYTH: Most payday loan store borrowers are out of control and never payback on time

FACT: The typical payday loan store customer is a responsible borrower who typically pays back the loan after 14 days or when they are paid. The majority of realize this is a short term, closed end agreement and do not have problems meeting the terms of the loan.

• About 66% of payday loan store users take out loans to cover unexpected cash flow problems.
• about 34 % use fast cash loans to cover palnned expenses **********************************
• 60% either used the quick cash loan one time and did not renew the loan
• Sudies show that 70% who use quick cash loans use them 1 time monthly or less.
• Studies by " The Credit Research Center" report that 14% who use quick cash loans do so 14 times or less annually
• Wisconsin Dept. of Financial Institutions reports 71% use 15 or fewer times.
• North Carolina Commissioner of Banks reports 73% use once a month or less.

MYTH: Quick cash loans prey on unsuspecting customers

FACT: There are solid laws in place to protect customers from being taken advantage of. The overwhelming popularity of these loans as a discreet and dignified way to solve temporary cash flow problems speaks for itself.

• 70% utilize quick cash loans becaus of the convienence (fast, easy,etc..)
• 96% are fully aware of the charges they will incur. Most state they were quoted the fee as an APR
• Most believe that quick cash loans are useful ( 92%) only about 12% state they were dissatisfied with the service
• 33 states and D.C. provide balanced, responsible regulation of payday advance companies.

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