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Payday Loan Industry is Highly Regulated
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Posted On :
Nov-24-2011
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Article Word Count :
467
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In USA the money lending industry is highly regulated and many industries in the financial sector also have a defied set of rules and regulations for money crediting and borrowing process.
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In USA the money lending industry is highly regulated and many industries in the financial sector also have a defied set of rules and regulations for money crediting and borrowing process. The payday loan lending industry is also one of the highly regulated industries within the financial sector with each state having different rules to govern the functioning of payday lenders.
Few states have restrictions regarding the first time payday loan users while others have limitations set on the overall amount borrowed by an individual at a time. The maximum sum of money that can be given by a payday loan lender is $1500. However cash advances have a high interest rate as compared to other loans mainly due to its short term nature and high risk factor involved as it is a common knowledge that payday cash providers operates not only to provide money for common individuals coming across emergency needs but also those people who have a disappointing credit score.
The existing laws regarding payday cash advances have evolved and gone through many approvals and rejections at the national level. Hence laws keep on changing in order to fit into the current economic scenario and money lending trends and demand.
Payday online advances have been a target of lot of criticism lately because of their high interest charges. These charges however are not unfair if we look at the situation from a lenders point of view. They enable the people to have instant access to required money without any formalities of paperwork and security arrangement. The money is deposited within few hours of the borrower’s application. Also people with bad credit score also apply for online payday loans for a period of 2 to 4 weeks. So the interest amount doesn’t pile up to become a large amount like traditional kinds of advance offered by banks. It is only fair to pay a little high for handling emergency financial situations that could result in bigger costs.
The American Consumer Financial association has legalized these advances and has drawn out codes of practices to be observed by payday lenders across the country. The basic purpose behind the development of these codes of payday loaning practices is to have a standardized set of rules that govern the activities within the payday advance industry. Not only this but these loans will ensure uniformity of lending practices and work against those false lending activities which have been carried out by various black sheep in the industry. These regulations regarding the lending of instant online payday loans would protect the individuals from falling into debt trap or a victim to any online spam through ensuring the registration of payday lenders and making them comply to the ethics of money lending.
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Article Source :
http://www.articleseen.com/Article_Payday Loan Industry is Highly Regulated_109245.aspx
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Author Resource :
This press release is submitted by All4paday which is the number one PayDay Loan Company in USA.
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Keywords :
payday loans, direct payday lenders, cash advance online, payday lender, online payday loans,
Category :
Finance
:
Finance
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