Short term lending is a very difficult issue. Within the United Kingdom, the number of payday advances taken out in 4 years has quadrupled. Montana, Arizona, and many other states have taken steps to limit payday lending. If S. 3245 passes the Senate, the Truth in Financing Act could be extended to cover the rate of interest of payday loans.
Understanding the figures of payday advances
It could be very difficult to understand the payday financing business as the data available could be inaccurate and conflicting. A recent record by Personal Money Store shows that though you will find many things about payday advances that are simply not supported by research. Most payday 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. According to an analysis by creditcards.com, only 20 percent of charge card customers actually comprehend their charge card agreements. In comparison, 95 percent of cash advance customers understand the charges they are paying.
The statistics of payday lending and short term credit
There is a belief that all cash advance applications are approved — but studies have shown that up to 20 percent of applications are rejected. Still, one of each and every five pay day loans is written off as a default. Most personal loan companies report 8 to 10 percent profit. In comparison, Goldman Sachs reported 27 percent profit.
Trying to educate the discussion
An informed discussion of the political issues around payday lending can be difficult to find. Because payday financing has become a political issue across the country and all over the world, it is very important to have complete, accurate, and reliable statistics about the industry.
