Extensive report addresses a decade of payday financing data
Politicians have been batting around the issue of payday lending. The number of payday cash advances taken out within the last four years within the UK has increased by over 400 percent. Legislation that limits percentage rates and loan terms has been passed in Montana, Ohio, Arizona, and other states. If the United States senate passes S. 3245, the Payday Lending Limitation Act of 2010, all payday loans could be capped with 36 percent annual interest rates. Article source - Report sheds light on controversial lending industry by Personal Money Store.
What the numbers behind payday cash advances indicate
It could be very difficult to understand the payday lending market because the data accessible could be inaccurate and conflicting. A recent record by Personal Money Store shows that though you will find many things about payday loans that are simply not supported by research. Most cash advance or short-term credit customers make over $ 47,000 in a year and have been working at one job for four years or more. More than 95 percent of borrowers confirm they understand the finance charges on these loans, while only 20 percent of charge card customers say they are able to comprehend their credit card agreements, according to a creditcards.com analysis.
The numbers that support payday lending
There is a belief that all cash advance applications are approved -- but studies have shown that up to 20 percent of applications are rejected. Over 20 percent of short-term loans, even with these high standards, have to be completely written off as a total loss. Goldman Sachs reported 27 percent profit to the SEC in April. Most payday lenders record between 8 and 10 percent profit -- far from the "making Money hand over fist" that is the general perception.
Informing the political discussion
A careful and informed discussion of the issues surrounding short-term credit and payday lending has been lacking. Because payday financing has become a political issue across the country and around the globe, it is very essential to have complete, accurate, and reliable data about the industry.
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