The Obama administration from day one has made the case for increased payday loan regulations. While no national bill was passed on this subject, many states have listened to the president and passed their own legislation capping the fees that payday loan lenders can charge.
The Obama push for increased payday loan regulations has resulted in hundreds of payday loan shark companies being put out of business. Those lenders that charged obsurd interest rates and took advantage of desperate consumers are no longer in business. The payday loan industry is still alive and well however, they are just not making as much of a profit as before.
With these new regulations in place, online cash advance loans are becoming a more financially attractive option for consumers who are experiencing short term cash flow problems. These loans still carry above average interest rates with them however they are much more reasonable than before state legislation was passed. These short term loans are not to be over-used but they do serve a very important purpose in supplying fast cash during emergencies or desperate times.
Online cash advance loans are usually more competitive than the retail brick and mortar branches. This is because they do not have the extra expenses of running a retail operation. Also, the online market is becoming much more competitive and lenders are now forced to compete with one another for the loan bid. When a consumer walks in a retail location, most lenders realize they have a 90% chance of giving them the loan, while online they must have the most competitive offer to get the loan rights. Therefore consumers can generally get a slightly better loan offer when using an online cash advance.
While Obama did not succeed in passing national payday loan regulations, his influence is definitely felt with many states heeding his advice. Most states now have stricter laws in place than they did before Obama took office. Every state is different however so make sure you check your local laws before accepting a loan offer.
Even though there has been several states which passed payday loan regulation laws, consumers still need to think very hard before applying for a short term loan like this. A good rule of thumb to use when considering whether or not to get the loan is this:
If your late fees, bounced checks, over the limit fees, and other consequences exceed the finance charge on a payday loan then it makes financial sense to get the loan. If the finance charge is more, then it doesn’t make sense. It’s really as simple as that.