Payday Loans Uncovered: Group Educates About the Dangers of Predatory Lending
AboutPayday.com is an educational website that presents a world of information and statistical data to help expose how payday loans do not help solve its borrowers' financial problems.
June 12, 2012 (Newswire.com) - When facing situations of financial difficulty that cannot wait for the next payday, many people turn to payday loans. Rather than borrowing from individuals, income earners seek assistance from non-bank payday loan companies and organizations for a short-term credit option. Payday loans tout easy applications and quick approval, making it a popular option for some 24 million people who may need money fast for financial emergencies.
About Payday is a non-profit organization dedicated to educating the public about predatory lending. It is aimed at exposing the industry and pitfalls about payday loans. The group presents factual data and lets the statistics speak for themselves.
AboutPayday.com explains that short-term loans with high interest rates are secured against the customer's next pay check. Such loans are offered by lenders with the expectations that they will be repaid from the customer's next several pay checks. According to the website, there are about 23,000 payday loan stores all over the United States.
AboutPayday.com underscores that while payday loans are referred to as "loans," the lender is actually not extending any form of credit. This is because of the way in which the lender will charge a "financing fee" upfront, instead of interest expenses at the end of the borrowing period. As a result, the more borrowers acquire payday loan from a company, the more likely that they are to be buried by debt and require additional payday loans to continue servicing the obligation.
Presenting data and statistics, AboutPayday.com notes that the average cash advance loan borrower will pay $475.73 in finance charges to borrow $366.94 in less than four and a half months. When such figures are stretched out to reflect the way payday loan debt compounds, the average payday loan borrower will incur $2,492 in debt in a single year, with as much as $738 in associated financing costs.
Acknowledging the fact that payday loan grievances abound, AboutPayday.com comes with a dedicated section that directs individuals to the regulators they should be filing complaints to.
To learn more about the issues and problems associated with payday loans, visit http://www.aboutpayday.com to be informed.