Due to a recent flood of complaints in the State of Illinois from payday lending customers being contacted and asked for bank account information, both the State Attorney General Lisa Madigan and payday lenders alike are issuing warnings to payday loan customers. It seems that several payday loan customers have been contacted by a fake “collections” company asking customer’s about their payday loan debt and ultimately attempting to get the customer’s account number. Papdayloanjr, a direct online lender that cares about the privacy of their customer’s personal finance information, is issuing this press release as a warning in hopes of helping to put a stop to this scam.

The Illinois Attorney General’s office on August 25th, 2010 issues an official statement warning consumers in the State of Illinois about the recent wave of fake collections calls, and offered residents some tips for handling a potential scam call. She reminded those receiving a suspicious call that, contrary to what you may be told, a payday loan customer CANNOT actually go to jail for not paying off a debt in time. She advised those threatened by a potential debt collector to hang up the phone and file an official complaint with the Attorney General’s office (www.illinoisattorneygeneral.gov) OR by calling the AG’s Consumer Fraud Hotline at 1 800 386-5438 for the Chicago area) to assist in putting these practice to a halt.

And although the State of Illinois’ warning was issued just days ago, Paydayloanjr.com had already issued a warning to customers on their payday loan blog. As a direct lender who promotes responsible lending practices, it is crucial to step in and provide customers with the information necessary to help avoid any scams targeting payday loan customers.

It seems that Illinois isn’t the only State with reports of these fraudulent collection calls. There have been reports of the same tactics being used against payday loan customers in Colorado, Ohio, Florida and Indiana as well. Although at the moment the majority of complaints are from customers in Illinois, and no other State’s at this time have issued an official warning to consumers.

The “false” collectors have reportedly used several names, most are false and the business does not actually exist, but the scammers have also used names of actual legitimate businesses such as Cash Net USA and Quick Cash. Cash USA has also released a statement letting customers know that they had nothing to do with the scams, and their name was most likely used in order to make the collectors sound more legitimate, thus increasing the chances of fooling a customer into authorizing a payment.

If you receive any calls such as described please contact your State’s Attorney General’s office to report the complaint. We hope to see the persons responsible brought to justice swiftly, before any more consumers are harassed or taken advantage of. Payday loan customers can always find helpful tips about this and other topics and info at our Paydayloanjr blog page as well.

According to About Payday Loan, recently in Colorado, House Bill 1351 was passed in an attempt to limit APR’s for payday loans in Colorado, but critics from both sides are now questioning the true implications of HB 1351 for both consumers and payday lenders. The new law, which went into effect earlier this month, was meant to eliminate payday loans and replace them with a 6 month installment loan instead. The Community Financial Services Association, which represents the payday lending industry in America, stated that the new bill will result in “the closing of dozens of payday loan stores and the loss of at least 100 full-time jobs” and will also affect direct internet lenders such as Cash USA possibly causing them to no longer continue to offer loans in the State of Colorado.

Those in the payday lending industry, which reportedly lends to 300,000 customers a year in Colorado alone, are attempting to create a business model that may indeed allow them to survive amidst these drastic regulatory changes to their already transparent financial product, several payday loan storefronts have shut their doors leaving many seeking employment. Many lenders preemptively closed down knowing only of HB-1351 via payday loan news sources such as the payday advance forum.

Despite the original intent to lengthen the required term of these small loans in order to cut down APR’s, new studies argue that within the limits of the new laws would actually allow lenders to increase APR’s with the new 6 month loan, by use of new finance charges. These claims do not, however, seem to specify exactly what terms are being compared to come to this conclusion, nor do they specify what provisions of HB-1351 actually restrict or allow these practices. And because APR’s by nature can vary greatly on short term loans, this may be yet another attempt by regulators and those opposed to the payday lending industry to use deceptive APR statistics to “mis-represent” or distort figures. For example, a common claim is that APR’s should be limited to no more that 36%, and that “everyone knows” an APR of 400% is simply “too much”, when in reality a $29 overdraft fee (2 week period) would calculate to an APR of 755%, which is legal and widely accepted as a standard even for overdrafting less than a dollar.

HB-1351 also requires payday lenders to refer customers to another lender if they do not offer the repayment options that the customer wants, which is a bit alarming to lenders when considering both the rather vague nature of the regulation, and the fact that seemingly no other industry is required to adhere to such a policy. If a restaurant cannot prepare your favorite meal, you are certainly not guaranteed by law a referral to a restaurant that can cater to your request.

In any case, many payday lending jobs in Colorado have already been lost, and consumers that only need a little cash until payday will now only be able to select a 6 month loan. And although this may not seem to make sense, it is intended to “protect” consumers in Colorado. At least the details of this bill are still currently being drafted by the Attorney General’s office, and a final hearing is scheduled for next Tuesday. Perhaps both lenders and consumers will see some positive changes at that time.

With new reforms and regulations happening in the financial world, many payday lenders are looking into offering alternative types of loans that are beyond payday loans.

Some of these alternatives maybe installment loans, title loans, or small business loans.

Installment Loans:  Installment loans are very similar to payday loans except that you have an option to pay back the loan in smaller portions on your future paydays until you have paid off your loan.  This will help you reduce the stress of paying a big portion of your paycheck to repay your loans.  The disadvantage of such loans are that you may end up paying more fees because since you don’t pay off  your debt on time, the fees could roll over and you end up paying a lot more than you borrowed.

Title Loans: A title loan also referred to as auto title loan or simply car title loan, are the types of loans that are borrowed based on borrowers vehicles as collateral. These loans are a bit cheaper than payday loans but risk is that you may lose your car if you don’t pay.

Small Business Quick Loans: Smarter lenders like Cash USA are now looking into offering quick small loans to small business. This is an interesting concept because although small businesses made up half of US economy but majority of small businesses have hard getting loans from banks specially post credit crunch. So concept of lending to local small businesses could be an interesting  idea.

If you are among millions of Americans who lives paycheck to paycheck, and having hard time finding a better paying job, relying on payday loans are an option to cover your short term financial needs.  But you have to realize that payday loans are not designed for long term fix so if you find yourself taking them too frequently, then you need to think about finding better ways to make more money where you won’t have to be so dependent on payday loans, or any other type of loans so often.

Of course finding a second job could be a solution but if you already have a full time job, that will most likely be requiring most of your attention and energy, so having a second job will be extremely difficult. Also you would like to stay home to spend some time with family, which makes having a second job even harder.

A good solution is to find other methods to make money and one great way is to become more internet savvy, and find ways to make money online.

You can start by creating a website or a blog, and promote it using various free methods such as article marketing, and making online connection and network with other bloggers who would drive traffic to your website.

You can rely on onsite advertising, or sell a product or service online, or simply become an affiliate of another website such as online lenders.

Online payday lenders rely heavily on affiliates like you, who have website traffic and bring them business. If you look at the right banner on this website, you will see an advertising banner to direct payday lender that we are affiliated with. And that is how we pay for websites costs.

So get out there, become creative, and make changes to your financial situation by looking for other avenues to make money so you will be less reliant on payday loans or other type of loans.

The majority of business owners in America, no matter what the market or industry, face at very least a small percentage of “uncertainty” in their future.  Of course, the most desirable business scenario would be that of minimal “risk” or uncertainty, but also that of the soonest return on investment and largest profit potential.  It’s simple business 101.  But some industries come upon sudden changes due to unforeseen circumstances and make best efforts to cope with an uncertain future, such as the payday lending industry and the subsequent legislative developments that oversee payday lending operations, which is why so many online lenders of payday loans are keeping a close eye on developing payday loan information and news.

The payday lending industry, which represents thousands of lenders across dozens of States, has been a thriving industry in America since the early 1990’s and has generally enjoyed an increase in total loans and total profits since then.   But these increasing figures alone could be quite deceiving, if used to determine the current climate of the payday lending industry.  In fact, despite these climbing figures in total loans and profits, the payday lending industry faces a rather unforeseen future due to ever changing State regulations.

Traditionally, the laws that govern “payday loans” are controlled at the State level and can set limits on APR’s, maximum finance charges, allowable “rollovers/extensions” of the loan and much more.  Over the past decade, many States have either banned the option of payday loans outright, or have set such meager limits to the finance charges allowed, that no lender could operate at a level that would allow a profit.  This means that even though the payday lending industry seems to have more and more customers, the “playing field” is quickly being eliminated and therefore leaving many lenders scrambling to secure the future of their business.

These changes to legislation affect small lenders differently than larger lending operations that are left with more money and expertise to deal successfully with changes to legislation or the complete elimination of lending in an entire State.  For example, a one-store operation that loses the ability to offer loans in their State will most likely close their doors.  But a lender that operates 50 stores and from a few online sites that offer loans to several States, will have more options available when new legislation takes effect.

In fact, it seems that many payday lenders are looking to future legislative changes and trends in order to positively and pro-actively shape the future of their lending business.   For example, direct and responsible online lender Cash USA has recently announced that they are considering making a change towards “affiliate” marketing, which provides less income that direct lending, but much less risk and absolutely no licensing.  Other lenders are looking at the possibility of offering “installment” loans, which are similar to a payday loan, but usually for a higher amount and a longer term (6 months average).

No one is sure where the future of payday lending is headed.  But as of now, no legislation has considered the existence of this consumer demand for these loans, nor has anyone attempted to offer a solution or offer a substitution for these short term payday loans.  Until then, businesses will surely keep their eyes to the news to ensure a successful future for their business.

Every now and then it happens to all of us that we are caught in the middle of the month with an unforeseen car repair, house repair, emergency medical expenditure or some other need for liquidity. Payday loans are there to exactly solve this purpose and are especially critical when one finds it hard to get loans for small periods. If your credit card is maxed out, even procuring a new credit card might take more than two weeks.

Priority pay day loans

These are the easy approval loans which involve very less hassles. All one needs to qualify for the priority payday loans is to be an American citizen who is over 18 years old. The individual must be employed earning up to 1000 dollars per months and must possess an active bank account. There is a network of lenders which can deposit 1500 dollars into your checking account within a day or two if you satisfy all the criteria required for the priority payday loans.

Cash Advances

There are many banks and even credit card companies that can provide you with cash advances of up to 1500 dollars. This could either be secured or unsecured. It is better to go for unsecured cash advances if you have a steady monthly income. Security deposits might be required if you don’t have a steady monthly income. However, this could prove to be a risky affair. If your loan keeps flipping for a while, the high interest rates could mean losing your asset. But if it is a short term for which you need the money, you can go for payday loans instead of maxing out on your credit cards and pay high interest rates on the entire outstanding balance amount.

Online payday loans

Payday loans can be applied online as well. There are many sites which have a network of lenders and can match the lenders’ risk appetite with the credit rating and need of the individual. You will be able to get your loan within a day or two. You can apply online and these loans are almost instantly approved making the process very easy. The best part about these payday loans is that you don’t need to run from one bank to another. Secondly, these loans prove critical help for needs that wouldn’t wait.

Benefits of payday loans

Payday loans are helpful because of the speed with which one can get the money into their checking accounts. Another major benefit of payday loans is that there are no questions asked about your credit rating or credit history for loans up to 1000 dollars. For standard cash loans, you may be turned down if your income during a specific period is less than a stipulated amount. Some payday loans like one hour payday loans provide low credit individuals with almost instant cash loans. You usually pay up to 25% interest for the loan and could be justified if your business needs a very quick investment and all other sources of income have dried up.

One of the applications are payday loans are to pay for health-care bills. So at least that is what various payday lenders report. They report near 15% of their customers claim that they are taking a payday loan to pay for a medical emergency or pay health-care bills. So despite all restrictions and rules and regulations being put on payday lenders, payday loans remain to be in high demand.

Besides bad economy, unemployment,  and  credit crunch, increasing health-care costs and lack of viable health-care resource are among factors according to a press release  on Yahoo news; It states that more Americans are taking payday loans to pay for medical bills as smaller doctors, dentists, and clinics are limiting or canceling their in-house finance options due to rise of health care costs.

An example mentioned in this news was one dentistry in San Diego, San Diego Dentistry, seem to be struggling to keep it’s in house finance options for its customers alive. So the center have now prioritizing its patients to those with good credit standing, then local San Diagans (San Diego Residence) first before they offer in house finance and payment plans to anyone else.

That is just one example of how many health care centers and clinics have reduced or limited there in house finance options. Many other doctors and dentists, have permanently, canceled their in house options and won’t be seeing their patients unless some sort of payments are made. And since so many Americans remain to be without health insurance, Americans seem to be forced into borrowing money to see their doctors or dentist.

Health care reform bill, one of the recent achievements of the current administration in White House, was recently passed but is yet to be implemented in many States including California and its effects and consequences are yet to be fully observed. Many health care and economy experts, from both politician isles, remain pessimistic about effectiveness of this health-care bill and predict that Americans will have to continuing borrowing money, whether payday loans or other types of loans, to pay for their health care bills.

Having a problem with managing your finances? Do not worry, you are not alone. Over 60% of American households are struggling with the same situation, and trying to balance their check books every month. There are numerous households in American where people are bordering between fair credit and bad credit each month. What prevents them from going over into the bad side is some emergency measures by which they manage to sort out their loans and credit at the last minute. One such measure that is reliable and works for thousands of families is the concept of getting a payday loan.

When you have been in debt, you know how difficult things get. Every single luxury or even normal practice you were used to spending on has to be reconsidered and reduced until you are living as frugal a life as you can. In the middle of this if some emergency contingency arises then you are totally at a loss about how you can sort yourself out of this mess. It is not something you have to worry overly about as there are ways out. Over 65% of the American population have relied on and got through tough spots with a timely payday loan that helped them tide over an emergency financial crisis situation.

When you have been in debt, you know that you need to make every move carefully. Your counselors would have told you the importance of reading through the fine print and doing your research so you do not just take what comes. When it comes to payday loans as well,   the same facts apply. Do your research. Figure out where you are at a loss and pay up what you owe so you know you are not at the worn end of the bat. Take some time to see what conditions each lender is providing payday loans at. You can find a good deal if you look around enough.

Read the fine print on it. The contract between you and the lender should be thoroughly read and understood to determine where you are expected to pay and what sort of repayment options are available. Choose one that offers you a better deal in a roll over. A roll over is a repayment option or an extension on the loan. Take the time to verify the information and have emails and concrete data at hand about your communication so there will be no conflicts or doubts later on.

Borrow what you need and not more. You might think that since you are using it to pay that credit bill why not take a few extra bucks to spend. This is not wise as the interest rate and the final amount you pay back would only add to your already precarious balances and amounts. Borrowing can lead you to sink into debt but when done with some caution can help. Payday loans can be a real respite for people who are struggling for financial aids with a bad credit situation.

Payday Lenders such as Payday Loan Trust, will have to wait until November in order to see if their right to offer payday loans to the citizens of Montana will become “regulated out of business”, some lenders argue.  The term “payday loan” describes a short-term loan, between the range of $100-$1,500 (averaging about $300), that is typically set to be re-paid on the borrower’s next paycheck date.  These loans are, in majority, utilized by middle class Americans that find themselves in a temporary financial pinch until their next payday and cannot find access to short-term credit anywhere else.  But come this November residents of Montana may see their right to choose payday loans eliminated if initiative I-164 is passed, which would eliminate hundreds of jobs in Montana when lenders such as Pay1Day stop offering cash advance loans in Montana.

The initiative will cap the maximum allowable APR to a mere 36%, meaning lenders could only charge $1.38 for each $100 loaned for a 2-week period.  And because the majority of payday loan borrowers have bad credit, they are a higher risk meaning that after licensing, operations costs and customer defaults, the 36% APR would not come close to covering expenses.

Legislative movement such as I-164 in Montana has many in the payday loan keeping a close eye on payday loan news developments, not only in Montana but across the entire country.  Even for direct online lenders such as Pay1Day, who loan directly to borrowers via their secure online applications, there are strict penalties for lending to borrowers that reside in States that have banned these loans or placed harsh APR’s restrictions.  Staying one step ahead of these changes is crucial in a fast changing industry such as payday lending.

Unfortunately for thousands of Americans this government “over” regulation and elimination of consumer choice has done little to better the average payday loan customer’s financial situation, as well as eliminated thousands of jobs.  Any legitimate complaints against the payday lending industry could easily be resolved with just minor regulations, such as limiting or eliminating “rollovers” of loans, which can make it tougher to pay off the loan principle.  Instead, consumers are left with literally no other option for credit, and turn to un-regulated and often times unscrupulous online lenders.

Unlike reputable and responsible direct lenders, these “other” sites are the source of the vast majority of complaints against the payday lending industry.  Typically they are not even lenders, and simply “sell” your personal application info off to lenders, making it nearly impossible to contact a representative if perhaps you never receive your money yet still are charged an “auto payment” for re-payment of a loan you never actually received.

We as consumers and lenders can only hope that this Montana initiative will be voted down, to save jobs and protect the consumer’s right to choose.  After all, payday loans are already fully regulated, and every detail is disclosed.  I wish I could say that for every other financial product.



Utility late fees, rent late fees, overdraft fees, and credit card fees are on average higher than payday loan fees according to following chart.

Payday loans are short term loans that are geared to help with short term financial emergencies. Payday loans are products when you need short term short cash loans. On average they are around $20 per $100 borrowed. Although that calculates approximately to 20% per two weeks, but that calculates much cheaper than the fees mentioned above.

Back in May, we wrote an article where we applied APR rates to overdraft fees to demonstrate how much more expensive overdraft fees are in comparing to payday loans.

Payday  loans are great solution to your short term financial needs so as long as you use payday loans responsibly.

Make sure you keep educating yourself and learn all about payday loans and the payday lender you will be taking loans with before you apply for a loan.