WASHINGTON, DC – The median interest rate on bounce protection loans is in excess of twenty times that of payday loans concludes a study by Mark A. Fusaro, Department of Economics, East Carolina University.  
 
The independent study, “Hidden Consumer Loans: An Analysis of Implicit Interest Rates on Bounced Checks,” finds that “Payday lending attracts attention for its high interest rates, but bounce protection loans are much more expensive. When the amount borrowed is low and the time outstanding is short, the effective interest rate paid on this loan can be quite high.” 

Fusaro found that “frequent overdrafters can pay fees exceeding $3,000 per year which implies an interest rate in excess of 1,700%. The median implicit interest rate is calculated to be 4,547%. People over 70 years old pay a median interest rate in excess of 7,000%, the most of any sub-group examined.” 

Using an extreme example, Fusaro writes, “A person who has a three dollar overdraft that is outstanding for one day pays an implicit interest rate of 260,245%.” 

Additional findings include: 
 
•  People of all income levels overdraft equally often
•  Customers using bounced checks as personal loans account for twenty percent of overdrafts 
•  Service charges are a profitable income source for banks 
•  When a bank pays overdrafts, customers overdraft 50% more 

“This study proves the wisdom of our customers. For as long as we’ve been in business, customers have told us they use our service to avoid bounced check or overdraft protection fees. Payday lending exists simply because we offer people a better alternative,” said D. Lynn DeVault, president of the Community Financial Services Association of America (CFSA).  “Lawmakers take heed: If you take away the option of payday advances, your constituents will be left to choose between less desirable alternatives,” DeVault added. 

Fusaro examined 1,399 bank account transaction records from a small bank in the Midwest. The average account holder was 47 years old and had an annual income of $31,600. Fusaro grouped accounts into four categories, from “occasional” overdrafters (less than 10 times per year) to “chronic” overdrafters (100 or more overdrafts per year). Using the data set of checking accounts, the author calculates the implicit interest rate implied by the fixed fee, the amount of the overdraft, and the length of time the overdraft is outstanding. 
 
Highlights available at: http://www.cfsa.net/OverdraftProtection.html 
Full study is available at: http://personal.ecu.edu/fusarom/fusarobpinterestrates.pdf 
 
About the Community Financial Services Association of America
The Community Financial Services Association of America (CFSA) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA’s Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers.

Last month I found myself in one of these “moments.” Our family pet, Rosie, a spunky little golden retriever, was injured by another dog at the dog park. Several times a week we take her to run off some of her youthful, never ceasing, energy. On this particular day, a number of dogs were all chasing the same toy. Rosie came away victorious, toy in mouth prancing for all to see. This did not go over well with one of the other dogs, and as a result, landed us in the emergency room of the local veterinary clinic with a serious bite on the top of Rosie’s head. This unfortunately, happened between checks, thank goodness for Speedycash and their payday loans!!! I was able to apply online my cash was in my account the next day, without missing a beat.

As a result of the visit to the ER, several stitches and pain prescription, we were left with quite a hefty bill. The payday loan was our little blessing in disguise during this unexpected situation. Although we love and cherish our little four legged friend very much, we were not expecting to be faced with such a financial burden. We are grateful that with this cash advance we were able to take care of both Rosie and ourselves.

There are many reasons a person might need a cash advance and it is reassuring to know they are there to help you when help is exactly what you need. A friend of mine recently started his own business. While it is still in its beginning stages, it is on a very promising path and beginning to expand rather rapidly. What once was able to be operated out of a home office, is now beginning to bust a little at the seams and the need for an office space is no longer in the distant, but near future. With this added space, come added expenses as well.

While financially, they will be able to afford the rent and utilities of the new office building, money gets a little tight when the deposit gets factored in to the mix. By obtaining a payday loan, they are able to pay the deposit on the space without jeopardizing the need to be able to afford the new staff they will need to hire to assist in running an actual office space. By allowing a cash advance to pay the deposit for the new office, the business doesn’t take a hit for a venture that promises growth and development of this business.

It will allow them to see more clients in a more professional manner not to mention the advertising perks, having a building with their company logo right out front for potential clients to see. Remember payday loans when you are looking for a little help building your business enterprise.

You get the mail. As usual, it is predominantly bills, electric, gas, cable, and cell phone. Thankfully after last year’s nightmare you were able to switch to budget billing for your utilities. A closer look at your cell phone bill and you realize that it is over triple of what it should be. You have gone long over your minutes and all the text messages. Perhaps you should have chosen to pay the additional five dollars a month for unlimited text messages. That will get added to the plan for sure now. Regardless, this month’s outrageous bill will need to get paid for, and you are wondering where that money is going to come from.

By getting payday loans you can get the help you need to pay for this month’s bill without suffering a cash shortage all month long. Lesson learned, you are going to be more careful to start making calls at night during the off peak hours, but you can’t risk letting the account go delinquent and having your phone shut off. A cash advance will bail you out when money is tight. An unexpected payment can really throw a wrench in a strict budget and it is good to know that you have options like payday loans to help you out.

The next time you find yourself with a bill to pay or any other situation arises that you haven’t planned for financially, remember that a cash advance can be just what you need to continue making your payments on time without feeling like you are just scraping by.

Original Post at www.speedycash.com/blog/post/Payday-Loans-ease-a-cash-shortage.html

Stuart Bekingnal
Is an experienced finance management consultant who works with Speedy Cash a company that offers Payday Loans online .
Payday loans are short term loans that are handy during unexpected demands of cash.

I also need to pay deposits on utilities and then hope to get it all turned on in time to not eat dinner a few times in the dark at the new place. Payday loans are essential for me to mate my emergency expenses against my non emergency regular income.

Speedy Cash Offers Payday Loans and Cash Advances. Payday Loans, Cash Advance and Economic Online Pay Day Loans. Speedy Cash has Online Fast Cash. Start Here, your money could be in your Account Tomorrow.

It seems like no matter how much planning goes into a big move you will always have expenses that pop up like drapes and window blinds. It’s funny how you can move in and then look out the window at a gawking neighbor and immediately say whoops we need to cover the windows–like right now! So in comes the payday loan to the rescue. Payday loans, thankfully are so easy to apply for. I couldn’t imagine going to my credit union and asking to borrow to move. The other part that I like about payday loans is that I don’t need to share all of my information. My bank would require so much information and tie up so much of my time, time that I don’t have to waste. Payday loans from SpeedyCash are the perfect answer.

I also need to pay deposits on utilities and then hope to get it all turned on in time to not eat dinner a few times in the dark at the new place. Payday loans are essential for me to mate my emergency expenses against my non emergency regular income.

Speedy Cash Offers Payday Loans and Cash Advances. Payday Loans, Cash Advance and Economic Online Pay Day Loans. Speedy Cash has Online Fast Cash. Start Here, your money could be in your Account Tomorrow.

It seems like no matter how much planning goes into a big move you will always have expenses that pop up like drapes and window blinds. It’s funny how you can move in and then look out the window at a gawking neighbor and immediately say whoops we need to cover the windows–like right now! So in comes the payday loan to the rescue. Payday loans, thankfully are so easy to apply for. I couldn’t imagine going to my credit union and asking to borrow to move. The other part that I like about payday loans is that I don’t need to share all of my information. My bank would require so much information and tie up so much of my time, time that I don’t have to waste. Payday loans from SpeedyCash are the perfect answer.

At the top of the list again this year is getting that gym membership you have been putting off and getting yourself back in tip top shape. It is going to be the year of a healthier and better you. You are a little daunted, however, by the idea of having to fork over such a big chunk of change for an enrollment fee so close after all of the holiday spending. Making the decision to get a payday loan can help you make that first big initial payment to the gym and get you on the fast track to weight loss.

A cash advance can give you that little boost you need to help get you through a little financial difficulty. It can be tough to come up so much money upfront, let a little quick cash be your answer. The monthly membership fees of belonging to a gym are not what make it expensive. It is often times that initial enrollment fee that makes it seem not so budget friendly. It is good to know that you have the option of a payday loan in order to get the cash you need for these types of situations in a hurry. Lacking money will not be a setback for you this time around. You got the help you needed from a payday loan to get you started and now there is no turning back.

WASHINGTON–A new report by the Urban Institute finds that if payday advances are eliminated they “could be replaced by alternatives that make
families even worse off.”

In “Enabling Families to Weather Emergencies and Develop the Role of Assets,” by Signe-Mary McKernan and Caroline Ratcliffe, the researchers find that low-income working families need access to small loans, such as payday advances, to help weather bad patches. 

Instead of regulating prices charged on small, short-term loans, the authors argue that increasing competition will drive prices down. They express concern that regulating prices “would make fewer small, short-term loans available” and suggest that prices can be driven down, not by setting rates, but by “regulating disclosures; requiring licensing, reporting, and examinations; and creating incentives for financial institutions to provide small loan services.”  

“The Urban Institute understands that eliminating payday advances is not in the best interest of working families,” said D. Lynn DeVault, president, Community Financial Services Association of America. “Its recommendations ensure that consumers would be aware of all of the fees associated with a credit product so they can compare their alternatives and make an educated decision based on what is best for them.” 

Specific policy recommendations in the Urban Institute report:   

Disclosures. Regulate standard, clear, and timely disclosures of the total loan cost so consumers know their full obligation and can easily compare what various lenders charge for loans…Stating the fee as a dollar amount instead of or in addition to the annual percentage rate (APR) may be easier for consumers to understand on short-term loans.  

Longer-Term Products. Develop a longer-term loan product for habitual users—those who rely on short-term loans frequently or for long periods—is needed. Regulating disclosures and creating incentives for traditional financial institutions to provide small loans would create this product de facto. 

Highlights available at http://www.cfsa.net/FullDisclosures.html.
Full report available at http://www.urban.org/UploadedPDF/411734_enabling_families.pdf.

Contact: Steven Schlein or Lyndsey Medsker 202-296-0263

About the Community Financial Services Association of America
The Community Financial Services Association of America (CFSA) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA’s Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers.

It’s only drawback, and sole reason you haven’t scheduled an appointment for yourself yet is the cost. One session is nearly $600. Any stubborn staining may require an additional bleaching session, or a continued at home whitening system. There is no way you will be able to come up with that much money at the drop of a hat. Don’t worry about where to get the money.

Payday loans will give you the money right away to get that initial whitening session, which may end up to be the only one you will need. You have already put a lot of money into the over the counter treatments that just didn’t work, so getting a cash advance to pay for this professional treatment will allow you not only to get the money you will need to pay for it right away, but also allow you to see the results you have been waiting to see almost immediately. There will be no reason to hide your smile when, thanks to payday loans, you will be back to sporting those pearly whites.

It’s only drawback, and sole reason you haven’t scheduled an appointment for yourself yet is the cost. One session is nearly $600. Any stubborn staining may require an additional bleaching session, or a continued at home whitening system. There is no way you will be able to come up with that much money at the drop of a hat. Don’t worry about where to get the money.

Payday loans will give you the money right away to get that initial whitening session, which may end up to be the only one you will need. You have already put a lot of money into the over the counter treatments that just didn’t work, so getting a cash advance to pay for this professional treatment will allow you not only to get the money you will need to pay for it right away, but also allow you to see the results you have been waiting to see almost immediately. There will be no reason to hide your smile when, thanks to payday loans, you will be back to sporting those pearly whites.