This describes payday loans in Kansas City and why ending these short-term loans is bad for consumers in Kansas City.
Payday loans are short-term, unsecured loans designed to cover a financial emergency or bridge the gap until payday. About 12 million Americans across the country take out pay day loans every year for a variety of reasons.
Payday loans have an unwarranted reputation in the media. While these loans are already highly regulated at the state level, lawmakers have attempted to pass federal laws to further regulate payday lending in recent years, including attempts to ban these loans entirely. If lawmakers are ever successful in ending the practice of pay day loans completely, it will be consumers who suffer for it.
Many consumers who turn to pay day loans Kansas City providers have few other options and live paycheck-to-paycheck, which means any unexpected expense or disruption in income can have disastrous consequences. While there are potentially alternatives to taking out a payday loan, it can mean costly utility disconnection (with fees of $40 or more), car repossession, further damage to the consumer’s credit rating, and difficulty paying bills.
Studies have suggested that consumers who take out payday loans have better performance on other bills, including reduced collections and bounced checks. While critics of these loans cite a high default rate, in practice, only a small percentage of payday borrowers report trouble repaying their loan with a satisfaction rate of more than 90%.
Another commonly cited issue with payday loans is the high annual interest rate that may exceed 300%. While this rate can sound shocking, this assumes the loan is spread over 12 months whereas payday loans are generally paid off within 2-3 weeks at a cost of $10 to $30 per $100 borrowed.
Without payday loans in Kansas City and other markets, millions of consumers can be left with no way to borrow the money they need to pay for car repairs, groceries, and gas when they face a financial setback. This important safety net can mean the difference between making ends meet and struggling to get to work and keep the utilities on.
Waldo Financial is a pay day loans Kansas City provider offering consumers cost-effective payday loans with competitive rates. Applying for a short-term loan is fast and easy with funding in 1-2 business days.
This article described why ending payday loans in Kansas City is bad for consumers everywhere.