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We all face an unexpected situation from time to time, and in these times, it’s often money that we need above everything else to solve the emergency. However, it is difficult to meet the emergency expense if you don’t have enough money in the bank, which many people don’t. So many of them ask for credit!

However, the problem is, it takes several weeks for the banks and conventional lenders to offer the money because of their lengthy processing time. In an emergency, you need the money really quick. Thankfully, there are lenders, such as payday lending companies that are able to meet this gap. You could receive the money in less than 48 hours.

Apart from payday loans, there is also the ‘car title loan’ where you can get the money you need relatively quickly. So what are these loans, and which option should you choose in an emergency? Which of these loans will be better for you?

According to a 2015 report brought out by the Pew Charitable Trusts, about 5% of adult Americans take payday loans for a variety of reasons like paying their bills, carrying out urgent repairs of their cars, or to buy medicines. Compared to this, only about 1% takes auto title loans, which comes to slightly more than 2 million people. So clearly payday loans are more popular in the United States, even after all the federal and state restrictions that have been imposed on the lending in recent times. read more

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A personal loan and a payday loan will both give you credit when you are a little short of cash. This is why many people believe they are both the same or at least extremely similar in nature and how they work. So are there any differences between the two? Actually, there are many differences.

What is a Personal Loan?

A personal loan is much like a conventional loan, with a key difference. This is unsecured debt, so there is no need for collateral. While applying, you have to submit information about your current income. The lending company will then review your application and decide how much money you can get. There will be a fixed repayment period and interest rate. The repayment term can be for 1 year or more, sometimes up to 5 years. You have to repay every month, plus interest till the end of the term.

What is a Payday Loan?

A payday loan is also unsecured debt, meaning, here too, there is no collateral. You can apply online or offline at the lending office by submitting your personal and income information. The processing time is usually quicker than a personal loan, so you have the money in your bank fast. Payday loans are extremely short-term cash advances till your next payday, as the name suggests. They are usually for a couple of weeks at the most. The amount offered is also lower than a personal loan. Usually, the money offered in payday loans are between $300 and $1500. read more

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The payday loan industry has often been criticized by many people. Legislation and regulations have been passed at the federal, state and municipality levels to impose restrictions and control their operations. But did you know that many regional and even national banks too are also in the business of offering payday loans? They often disguise them under an appealing name, but in effect, they are nothing different than the payday loans offered by the many storefront and online operators.

Yes, the short-term lending solutions of banks to meet a financial shortfall are nothing different than payday loans.

At least 6 banks were involved with payday lending. These loans were offered to their checking account customers. For instance, this is what the website of Wells Fargo says, “If you’re facing loan payments, medical expenses, or repair costs you just can’t afford … Apply for a loan”. Incidentally, this is like the same language payday lenders use.

Charges of Banks Much Like the Payday Loan Industry read more

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Critics will often say that payday loans are abusive. In fact, this has been a common complaint in recent years. Some of these critics are even asking for more legislation and regulations for the industry. Payday lending businesses across the United States have been opposing this, showing the world the service they offer to large sections of the population who need the cash urgently, often without anywhere else to turn to. The world is slowly coming round to this view and accepting it.

Newsweek recently published a report, which says the payday lending industry is extremely regulated, which is in stark contrast to what the critics are saying. They have drilled down and examined the state-level and federal regulations that are in place at this time, and also the jurisdictions at the municipal levels to finally arrive at this conclusion.

Let us now take a closer look at the regulations that are in place at the federal and the state levels. We can understand this even better if we look closely at one state and a city in that particular state. This will help us understand the regulations governing payday lending at all levels in the United States. read more

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There are a few similarities between payday loans and installment loans. For example, they are both small dollar loans where the lending business will give you a cash advance for just a few hundred dollars, unlike the banks and other conventional lending institutions, which generally are not keen on such a small amount. Secondly, both these types of loans and processed and approved quickly, and is thus of great help to those who need the money urgently because they are in an emergency.

However, make no mistake about this. There are lots of differences between payday loans and installment loans. They may seem to be the same because of a few similarities, and that is why many people often get confused. But the two are not the same.

Let us try to find out what makes the two different.

What Is a Payday Loan?

A payday loan is a short-term cash advance that is issued till the next payday. It is usually for a couple of weeks. The money advanced is between $200 and $1000 in most cases. The application process is easy. Processing and approval is quick. The money is credited directly into your bank account. On payday, the full amount plus interest and fees is debited from your account. Most of the payday lending businesses is located around the big cities. In recent years, many of these businesses are working online. read more

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Here’s something nobody expected would happen. After the many criticisms payday lending has received in the last few years from some quarters, and the recent laws and restrictions imposed on the industry, it was expected that payday lending would go down steeply. Almost everybody was expected to stay away from these lenders because they supposedly exploit their customers by charging so called steep interests. In fact, many predicted that the payday lending industry would go out of business soon and even seemed worried about the unemployment this would generate.

But here’s what actually happened. According to a report published by the Department of Business Oversight in California, the numbers of payday loans the seniors are taking in the state have actually tripled over last year. Yes, that is three times more. In other words, payday lending has become more popular in California, in spite of the negative press the industry has received and all the restrictions imposed.

Number of Payday Loans Goes Up From 945,000 to 2.7 Million

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Meet “Dave”, the finance app, which predicts upcoming expenses, and issues alerts to customers when their balance is at risk. Powered by high-end artificial intelligence, Dave is saving hundreds of consumers from expensive overdraft fees and is issuing warnings about the high costs charged by the banks.

Co-founder of this Los Angeles, California-based business, Jason Wilk says the ultimate objective of Dave is to help consumers avoid bank overdrafts because it is one of the most “expensive forms of credit”. Wilk describes Dave as the “weather forecast for money management”.

Not just that, Dave is even promoting payday loans, saying that it is cheaper than bank overdrafts and more customer-friendly.

There is a lot of evidence that shows payday lending is one of the best forms of credit. Let us take a few cases and analyze them to understand why.

Case #1 – Overdraft Fees and How the Banks Abuse Their Consumers

Let’s take an example to understand this better. Assume that a person is a little short of cash and needs only $200 for say making utility payments. No conventional lending agency will offer a loan for such a small amount. So the person has to write checks for the bills, knowing that there is no money in the bank to cover the payment. This is when the bank will charge its overdraft fees. read more

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Payday loans are small dollar loans where money is provided to the applicant for a short period of time till the day the next paycheck arrives. The money involved here is usually between $300 and $1500 and it is for a couple of weeks. This is why payday loans are also referred to as short-term loans or cash advance loans – there are many names for it. These loans won’t solve your long-term financial situation, but are great to solve temporary financial emergencies.

There are many other advantages of payday loans, apart from obviously helping people solve their immediate financial emergencies by providing money when they need it. For instance, these loans are very convenient, faster than other loans, and the eligibility checks are not as rigorous as regular conventional loans. This is why payday lending has become so popular in the United States and in many other parts of the world.

Most people refer to them as a payday loan, which is the general term for these lending schemes, but did you know that there are quite a few types of payday loans? There are many similarities between them, but there are a few differences as well. Let us investigate in more detail. read more

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The economy is not perfect. We all earn money, some of us more than others, but the cash is often not adequate. Rich or poor, we often can do with some more cash. Sometimes the extra money is for buying things we want, but may not be essential to our existence, such as the latest television set or the latest gadget, or for going on a long cherished vacation, but at other times, the extra cash is for more immediate and urgent needs, like for instance, buying medicines, paying off utility bills, or making urgent car repairs. Of course, for purchases like a car or a home, we need a lot of extra cash.

A loan can give us the cash we need. There is no stigma attached to a loan anymore, as thousands of people the world over take a loan for various reasons. In fact, taking a loan is now a fairly common and accepted practice.

Both individuals and businesses need loans. While individuals need the extra cash for personal reasons, businesses need the money for buying tools, setting up plants, making expansions, paying wages, buying raw materials or supplies, for operating expenses and for a variety of other reasons. read more

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Short-term debt, such as a payday loan is better in many ways. What is a payday or a cash advance loan? If you are a little short of cash or in an emergency and need funds to see you till the month end, you can approach a payday lender for this money. The money is directly credited to your bank account, usually within 24-48 hours.

You have to repay once you receive your next pay check. It’s a great help when you need to make urgent car repairs, pay utilities, or make some other urgent payments. These cash advances are typically for short terms, for 2 to 3 weeks, and the amount is usually between $300 and $1500. The payday lender won’t ask you why you need the money.

The Future Is Uncertain

Most of us can do with some extra money. That is why so many people take loans for a variety of reasons. Taking a loan is always a big decision because when you do, you are making a commitment of paying off the debt, plus the fee and interest, within time. The term of the loan is as important as how much money you have taken as the loan. read more

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