|
|
South Carolina Loan
We see advertisements for quick
cash loans every day. These loans can be pay day loans, cash advance
loans, check advance loans, post-dated check loans or deferred deposit
check loans. Typically the borrower rights out a check for the amount
of the loan plus a fee.
This fee can range from 10% to 40% of the loan and the borrower
usually has two weeks to pay it off in full. Most can’t pay it off
in time and end up owing, in some cases, more in fees than the amount
of the original loan. Some states like South Carolina have placed
limits on the fee amount allowed. South Carolina law limits this
fee to 15% of the amount borrowed. If you were to look at this in
a yearly APR it would be 390% interest. Most states have usury laws
which limit a yearly rate to 30% or under. Currently Pay Day stores
slip by by stating that loans are paid off in 2 weeks so no violation
has occurred and that they are providing a much needed service to
people that have no where else to go.
The actuality is that most of these
borrowers cannot repay on time and so they are forced to pay the
interest and take out another loan to cover the principle. Currently
the average borrower in South Carolina takes 10-15 loans to payoff.
These statistics are similar in other states. Which means the borrower
will pay $400 - $500 in loan fees on a $400 loan. This is usury
and should be illegal as it is not helping anyone. It is predatory
lending that just gets borrowers in deeper debt than before.
Some will say, that little man has to have somewhere
to go, said state Rep. Eldridge Emory, Butif he gets money this
way, he’s just digging a hole deeper and deeper, and he’s
not going to get out.
Several states like North Carolina have currently
banned this form of predatory lending. Others are beginning to consider
legislation to further control and possibly curb pay day loans.
Still more needs to be done.
,
|
