As of March 17, Louisiana caps payday loans for consumers. LA state senators made a big step toward payday loan reform. In a state rife with poverty and people in need of help, payday loans are a large source of money.
This free source of money comes at a long-term price that most people do not know or do not consider. In some situations, it is a very problematic scenario that can lead to significant misfortune.
Now there is finally a cap in place for payday lending companies. Some credit cards charge up to 15 – 28% APR, but some payday loan companies can get as high as 700%.
In most cases, the money individuals need to fix a car or some other emergency cannot wait until the next paycheck. Yet, the high rates are too much for many public officials and legislators to allow.
Annual Payday Loan Caps
The new law will cap annual payday loans at around 36%, which is higher than many credit cards. But it is considerably lower than the other traditional companies charging high-interest rates.
Anyone who is taking out a payday loan will not have to worry about anything higher than 36% on an annual basis. Most of the time, it is easier for people to pay off the interest and worry about the principal later. This is why the payday loan trap is so lucrative for lenders.
However, the new law in Louisiana should help to change things a little and make the nation rethink how they are dealing with all of the payday loans that has been going on in the country.
With some places charging interest rates of nearly 700%, it is no wonder that there is some public outcry and political backlash as a result.
Louisiana and the Nation with Payday Loans
The nation and the rest of the states will be fighting hard to reform payday loans more and more. Public outcry caused a fervor. Politicians quickly lose their office seats in some situations where the payday loan industry has sway over the legislation.
It was disastrous for the people who were defending the payday loan industry.
This type of thing will continue, and it is a function of the way that people are going about doing things. For many purposes, it is a lot harder than one would believe, and it is important to ensure that you can handle any debts if you get them.
One way of doing this is by going to a payday loan consolidation expert and speaking to them about your problem. More than likely, they will have a better solution for you.
