Payday loans originated as short term loans are a blessing in disguise for working class people to obtain much needed funds before their next payday. These loans are best to avail at times of facing temporary fiscal issues and not having sufficient cash in pocket. For all those struggling from mid month cash crunches, payday loans appear as great financial relief from small monetary troubles.
In the world of consumer finance, payday loans are real chameleons that alter their practices and shift their products ever so slightly to work around laws aimed at stamping out short term loans no credit check that come with interest rates exceeding 300%.
Now for the first time, a federal regulator is entering the fray and drafting regulations about payday loans that could possibly reduce the number of affordable loans that lenders can make. Following are the regulations that you can look at:
Usury Regulations
The term usury regulations states the excessive interest rate charged by lenders from loan aspirants. This practice of charging extra from borrowers is unfair and inappropriate. Often people belonging to poor class or lower middle class often fall prey to this mistake and generally higher for the loan which they are not supposed to pay in reality. Thanks to the federal regulation about short term payday loans online as this practice is out of business right now.
Maximum Payday Loan Amounts
Generally speaking the amount of cash borrowed under payday loans vary from $100 to $1000 depending upon your present financial requirements and repaying ability. According to new regulations of federal, it has suggested to increase the maximum amount of cash to be borrowed from payday loans.
Time Period Restrictions
Normally payday loan is offered against the next salary of people and that two for the stipulated time period of 2-4 weeks. But, according to the newest federal regulation, it has decided to increase the long tenure to allow the applicants repaying the loan in a convenient manner. One of the reasons for adopting this regulation is that many people preferred to repay loan on bi-weekly basis and it will be easy for them to settle the whole amount in slightly longer tenure period.
Termination of Fee
It has been regulated to charge standard loan processing fee and other charges from all sorts of loan seekers. Even the cost of terminating payday loan is also considered to be on standard limit for the convenience of poor or middle class borrowers.