Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Pennsylvania tries to curb payday loan borrowing

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August 08, 2005

Pennsylvania tries to curb payday loan borrowing

Payday loans are easy to get for everyone with checking account and job. Some payday loan lenders will lend you money with no checking account. For a somewhat higher fee. But it is the easiness to borrow cash in advance and from several payday loan shops at once, that has lead Pennsylvania Rep. Chris Ross (R-Chester) to sponsor House Bill 1478. If approved it would limit the amount of money consumers can borrow and curtail the number of payday lenders a person can borrow from at one time. This is reported www.phillyburbs.com

The reason for such a legislation is to break the often never ending cycle of debt. Many consumers borrow too much too often and unable to pay on time. They can borrow again and again without paying with more fees each time. Of course consumer doesn't have pay those fees, they simply roll into the next period amount.

Interesting math, according to this article, initial loans are made for two weeks with fees typically range from about $12 to $20 for every $100 borrowed. So if you don't pay four weeks, it is $24 to $40 for every $100. Six weeks is $48 to $80. Hmm, there isn't much left.

 
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