think that in the middle of the month you are low on the pocket,
and you need an emergency payment. What will you do With out
a second thought you will think of a payday cash advance, also
known as a payday loan. Short-term assistances are the main
attraction for these loans. Just take the money you needed,
and pay it back on your next payday hence the name, payday loans.
is a very short-term loan and you can pay it back after two-three
weeks. It is the fast cash that you can trust on it when you
suffer from emergency cash needs. So until you receive your
next pay, you can move your budget with the loan amount. So
it is very simple to get a payday loan, but the same time it
is very expensive.
The loans are now available as online and offline. In payday
loans newyork are obtained from a variety of sources as
payday loan companies that are nationally chains and locally
owned, some check cashers, pawnshops, and also Internet and
are marketed via, toll-free telephone numbers.
Know what is it and when it started
From early 90's onwards Cash net and Telecash (the partners
of the County Bank of Rehobeth Bach, Del) have started offering
payday loans to New York consumers through radio, television,
circulars in sub way trains, websites and newspaper advertisements.
For the consumers who have a checking account and a minimal
monthly income they were offering short-term loans. And the
response was and encouraging, surely for the company.
Now in payday loans newyork
are generating nearly $45 billion in revenue last year. So there
is no doubt to say that, payday loan business is the most revenue
generated and fastest growing segment.
Without any doubt we can say that it is one of the fastest growing
segments of fringe banking economy. These small-dollar loans
normally varying from $100-$500, generally bear an interest
rate of 500 percent, if you calculate on an annualized basis.
But according to law of New York, charging more than 16% for
these types of loans is strictly prohibited. It is surprising
to know, there are about 24,000 outlets make 95 to 100 million
loans a year worth $25 to $27 billion, and generate over $4
billion in fees.
Know how it works
If you are interested to take payday
loans newyork, you will be getting application
requesting information relative to your employment or other
income and details about your account. If you are approaching
Cashnet or Telecash, in details you cannot trace that the County
Bank is the lender, but rather identifies Cashnet or Telecash
as the source of the loan. After approving you will be getting
documents for further verification. Remember that the loan documents
include a Disclosure statement, a customer Authorization form,
a loan note and a loan payment instruction form. For extending
the loan you have to prove the existence of a bank account,
proof for salary or your other source of income.
Know the way, you get money
* The money will be transferred to your account in the next
business day itself.
* The interest rate that you have to pay is comparatively high,
as for every $100 you borrow, the average interest rate is $30.
So if you want a loan for $100 you have to apply for $130. If
you calculate the APR (Annual percentage rate), you can witness
that the amount will exceed to 500%. The maximum rate allowed in New York is 16% and for payday
loans, in most of all the cases the APR may exceed the maximum.
Always look for an entity licensed as a small loan company or
a bank as New York permits to make payday loans after these conditions.
* Always remember that no entities licensed by the Banking Department
engage in this particular type of business in New York but out
of state companies encage in this type of business.
* No non-bank company is permitted to charge an annual interest
rate that is in excess of 25% as the law wont permit it even
if the firms is licensed as a Licensed Lender under Article
9 of the Banking Law. But there is a possibility that the banks
may exceed the rate of interest than permitted in their home
Rsollovers-have a close look
The idea of payday loan is to repay the amount on the next payday.
But if are having a financial crisis then the company allows
you to rollover the amount. These rollover options are also
called as additional payment options and you can use two rollover
options. There are tow types of rollover options and in one
type you can lengthen the repayment period by one more day and
allowing the lender to debit only the amount of the finance
charge from your checking account on the original payment date.
You are allowed to use this chance for three consecutive times.
In the second rollover option at the time you authorize the
creditor to debit the amount of finance charge from your account
and also an amount for the partial payment of loan amount of
$50 on the payment date.
Some of the companies charge a fee, of say $35 and you can take
a two-week advance of $120. To get the amount you have to give
the check for $155 that the firm will hold until your next payday.
The offer behind payday loan is the easy way out of debt. But
be careful about the terms and conditions of the company, as
there will be some companies waiting with offers to trap you.
Some of the companies will be having very high interest for
these short-term loans. The payday firms are waiting to capture
people who are in high debt or having a past of using high-risk
lenders, young customers, and people with limited knowledge
in finance. Surveys conducted by various states of New York
found that in contrary to the statement of short-term loans,
most of them rollover it numerous times and the repayment is
many times the face value of the loan in interest.
Legal or illegal
Are you in doubt about the legal aspect in New York Payday
lending is illegal in New York. The civil usury cap is 16% interest
a year according to New York General Obligations Law in the
Country and New York Banking Law, subd. But eight states have
no border on payday loan finance charges. So normally a question
that arises is that, if payday lending is illegal in New York,
then why are payday lenders markets to New Yorkers. Claim is
that it is just brokering loans for the banks.
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