No, but Consumer Federation of America calls pay day loans legal loan sharking.It Is A Fee, Not Excessive Interest. Pay day loans are legal in most states because they are charging you a fee, not an excessive interest rate. Excessive interest rates are illegal in most states.
Outrageous Credit. Pay day loans are an outrageous form of credit. For example, let's say you write a personal check for $115 to get $100 for up to 14 days. The $15 fee equates to a 391% annual percentage rate (APR). This APR keeps going up if you extend “loan” week after week.
Bad Debt vs. Bounced Check. Worst yet, if you are not able to honor your check it is not a bad debt, it’s a bad check with associated non-sufficient fund (NSF) fees from your bank. Then to top it off, your local district attorney’s office may get involve acting as a collection agency for bad check you wrote.
What Are The Alternatives To Pay Day Loans?
Loan Shark? “I just need enough cash to tide me over until payday.” Please resist pay day loan. The pay day loan offer is preying upon your unfortunate circumstances, be it innocent or through your poor choices. Before taking out a pay day loan, ask yourself would you consider going to a loan shark with high interest and unhappy consequences of not paying them back.
Friends, Family, Community? What can you do? If your unfortunate circumstances are innocent, consider going to your family, friends, church, community organizations or alternative forms of credit for help. If you are making poor choices in regard to money and options above are not working, here are some options: