Instant Payday Loan

Oddly enough, but an instant payday loan may be wisely used not only by those people who are in financial difficulties, but also by middle-income families. Statistics show that only about 2/3 of those who take out instant payday loans regularly, approximately three times each two months, come from low income families.

How come, you ask? Irrespective of unsavory reputation that payday loan services enjoy on the global basis, yearly over 30% of those who take out such loans in the US seem like they don’t really need it at all. Let’s see why they do that.

The United States came to be the first country in the world that saw the coming of instant payday loan industry, which happened about two decades ago. And though the country that ranks first in the top of payday loan users per capita in the world is the United Kingdom, the US has been first to experience the waves of strict governmental regulations against the industry.

The figures revealed by numerous statistics agencies located throughout the country indicated that the number of middle and high-income families who get instant payday loans has started rising only in 2011 and is now limited to exact states or regions.

From 2006 to 2010 the US government has introduced a series of laws that prevent payday loan agencies from functioning in certain states and cap the interest rates in all other states at a maximum of 390% APR. This is just 15% of what you take out as an instant payday loan.

To have something to compare it with, just a decade ago the interest rate on a two-week $100 loan amounted to 40 or 50 dollars, which is as high as 1300% APR. Looks like a shockingly large amount of money.

Currently the industry has been banned in a few states — Arkansas, Kentucky, Georgia, Connecticut, Maine, Maryland, New Hampshire, New Jersey, New York, North Carolina, West Virginia, Vermont, and Pennsylvania don’t get payday loans at all anymore and they have to settle for common slow credit card loans.

Almost all other states had the instant loan interests capped. At the moment an average amount of interest imposed on a standard two-week credit card loan is 8 to 13% depending on which state you take it out in. If you think about it once more, it doesn’t really turn out to be so expensive.

Different people who come from varied backgrounds may use the loan money in different ways, but essentially the reasons are equal. Whether it’s a minor home repair or spontaneous whim that makes you travel to the other part of the world: no one is insured against what-we-don’t-knows and experience shows that these moments always come so unexpectedly.

There is still a slight difference in rates levied on instant payday loans and credit card loans, but the former still wins in terms of promptness, easiness, and area coverage.