Paydayloansolutions.net Investigates Whether Payday Loans Are Debt Traps

In United States payday lenders made $40 billion of loans in 2010 according to Social Science Research Network.

Dallas, TX (prHWY.com) January 21, 2012 - Expert from Social Science Research Network says "payday lenders made $40 billion of loans in 2010". But these loans are controversial because of high interest rates and myth like "cycle of debt." Political opponents of payday lending have hypothesized that the requirement to pay high finance charges on such loans result in additional borrowing, thereby giving rise to "cycle of debt."Experts from Payday loan solutions say "Payday loan is not a debt trap if you manage the money properly and go in accordance with the rules and regulation of loan lending company".

Payday loans are costly, short-term consumer loans with APRs approaching 500 percent. Borrowers tend to borrow frequently on an average up to nine loans per year. On this statistics many lenders says payday loans are obtained relatively quickly using internet, sometimes on the same day of demand and can be a lifesaver as well. With online loans people can get money instantly in just few minutes.

For example: - A borrower taking loan of $300 typically pays $45 as fee plus interest. Thus, the borrower receives $300 in cash today and owes $345 on the due date in two weeks apart from interest. If the borrower does not want to repay fully, he pays only the $45 fee in two weeks and still owes $300 in principal, plus another $45 fee for another two weeks. The interest charged is additional. This is known as a "rollover" and this is the reason behind the "cycle of debt." The finance charged for fast cash is typically between 15 and 25 percent of the amount borrowed. If we calculate it annually the interest rate is 400 percent or more, which is very high.

Experts from Paydayloansolutions.net say "the market for payday loan is quite limited within the general population". Payday loan industry has been operating in the United States since the 1980s and the number of stores has reached 25,000. Experts say "Payday loan lender will increase in number with the increasing needs of loan seekers"

About Paydayloansolutions.net:

Payday loan solutions are a financial matchmaker on the internet servers the people who needs instant cash loans. It provides quick loans which covers borrower's expenses until his or her next payday. The interest charges on the cash are very low. In addition the assistance rendered is fast and efficient. Customer support is the ultimate goal of Paydayloansolutions.net. The application can be completed on the internet and is safe and secure. No credit assessment is required, and most individuals get their cash very quickly, sometimes within few minutes.

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Tag Words: payday loan, online loans

Categories: Finance

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