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Payday Loans Now Offered by U.S. Banks

08.12.2011 07:39:28

According to popular thinking, payday loans are much safer in banks rather than private lenders. Is this really the case? Let’s just look at an example that shows how high interest rates can be. In many states you can take a short term private loan with interest rates equal to 450% per year! Some commercial banks offer little bit lower rates – around 400% - although this may not save the day. This shows that banks face the same difficulties when issuing both payday loans and traditional loans. This should make you think twice not to get into a debt pit and choose your options wisely.

Bank representatives state that their offerings are focused on low-income clients that need money to make ends meet until the next pay day. At the same time they say that payday loans (also called cash advances) shouldn’t be taken for more than 2-3 times in a row as their interest rates are really high.

Many people think that visiting a bank seems to be more respectful than using payday loan shops available in nearly every corner of the U.S.A. Banks now impend over smaller private lenders by increasing their networks and advertising their services now and then.

Many politicians, as well as U.S. troops, take advantage of cash advances due to special terms that according to Federal Law must not exceed 36%. This law was adopted by Congress after the Pentagon named cash advances a threat to national security, as they significantly devastated the troop’s assets.

As of 2011, lower-interest payday loans are offered by the Bank of America, Wells Fargo, Fifth Third Bank, Regions Bank and Guaranty Bank.

The United States law regulations may also affect the charges by private lenders; however, in some states, e.g. Georgia and Ohio, banks offer the same rediculous terms reaching more than 500% per year for a one-week payday loan.

One of the improvements introduced by banks is the convenience offered 24/7. You can now take a payday loan via the Internet or phone whenever you need quick cash.

Ruben Pulido, a spokesman for Wells Fargo, said that a new program called “Direct Deposit Advance” is intended for those in urgent need for money (e.g. to cover medical bills, car repair and other emergencies). Because of high interest rates, payday loans should be used for a short-term period only.

You can take a payday loan through Gross Loan as it works with all the major bank offerings, with the best terms on payday loans. For example, you can take as much as $500 with an average fee of $55; however, the amount depends on the state you live in (for example, you can only take $300 at a time in California).

There is little official information as to the number of customers using payday loan options through banks; however, bank representatives say that most people feel secure by using bank services and they are pretty much satisfied.

Keep in mind that there are stumbling blocks you should be aware of before jumping into payday loans. According to bank regulations, there is an automatic charge each time a customer makes deposits. In some cases, this may lead to overdraft charges and you have to borrow again and again to buy essentials like food, oil, medication, etc. As a result, you may find yourselves deeply in a debt pit. To avoid this, be sure to compare different payday loan options and choose the one that satisfies your needs in the most optimal way. GrossLoan.com can help you find the best lender, be it a private lender or a mainstream bank, and help you maintain your financial position without going broke. Try us now! Our services are free and require no obligations from you.


Tags: [USA]

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© Arthur Schopenhauer

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