Cash Pay Advance

Nixon proposes legislation to cap payday loan rates at 36 percent, and eliminate the practice of renewing outstanding loans — a practice, many argue, that traps borrowers in a vicious cycle of spiraling debt. Consumer advocate groups claim that payday loans — short-term loans intended to cover borrowers’ expenses until their next paycheck — are predatory, with lenders preying on uninformed consumers who have little access to credit. Moreover, since payday loans generally represent “credit of last resort,” it may be that borrowers seeking payday loans are precisely the borrowers most likely to default — what economists refer to as adverse selection. The result has been less access to credit for the thousands of Oregonians who rely on payday loans to offset unexpected expenses — such as emergency medical care — forcing them either to forego such expenses or seek credit in the black market. Those willing to borrow money at a rate of 1,950 percent are likely in such desperate financial straits that they will find creditors in any case — whether legally with a payday loan, or illegally in the black market. Find Out More

No Tags