More often than not the faulty finance decisions are taken in hurry and without any background search on the part of payday loans. Despite numerous alerts sent by Federal Trade Commission (FTC) in relation to dangers of payday loans and awareness created by private research experts, when it comes to taking the real payday loans no one has enough time to look in to the precautionary measure.
However one cannot avoid the general rule that the precautions are better than cure.
What are the recent regulatory measures related to payday loans?
The payday loans no credit check have its inherent hazards. Therefore to avoid people falling in the “debt cycle”, the US government are thinking about reforms these days. The Senate bill 515 is already a big discussion right now in the USA. Before the article throws light on the proposals of the bill, following are the background facts of the payday loans with no credit check:
- ·The payday loans with no credit check are currently available for 30 days maximum. This is because the pay structure of borrowers is 30-days cycle.
- ·The borrowers can take payday loans any number of times. This is in fact more vicious for those who are in the debt cycle. They always become greedy of taking one more loan to pay off the outstanding debt and fall in even deeper inside the debts. The lenders are certainly going to be happy as they continue earn interest and maximise their per client receivables.
- ·Interest costs are too high and few lenders literally rob the borrowers especially when the APRs are not fixed by the state.
The Federal Government has understood these lacunas of payday loans with no credit check. Following are the recent proposals under discussions of the Senate bill 515:
- ·The new proposal is to reduce the total period of payday loans from 30 days to 15 days. This will in fact reduce the total interest of the borrowers by 15 days if at all he can pay back theoutstanding. The lesser terms will pressurize borrowers to pay it back earlier.
- ·The number of times a borrower can take the payday loans in series will not be allowed more than 6. That means the borrower will have to consider other options if they cannot pay back the payday loans 6 number of times. The thought of restricting the number of limits to 6 is because the studies shows that the average number of times the payday loans taken by consumers is 7 times.
- ·The bill is also proposing to create a database of payday loan consumers who are ineligible to payback the proceeds and a chance to enter into the repayment plans.
- ·The basic idea of bill is to reduce exploitations of consumers who go on receiving the payday loans again and again and cannot come out of the debt cycle.
The beauty about payday loans with no credit check is that they are available with no bias of credit scores and on top of it there is no disapprovals to specific genders, casts, religions, ethnicities or people with any income levels.
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