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Why are payday loans illegal in some states?
Question : Why are payday loans illegal in some states?
Payday loans are still legal in the state I’m in, but I know that some states make the practices of payday loan companies illegal.
I don’t know how payday loans work. I also haven’t ever gotten a loan from a payday loan company.
How do payday loans work and why are they illegal in some states? Why are they legal in some states?
Thank you. I just want to know a little more about things like these.
payday loans
Best answer:
Answer by ranger_co_1_75
They are illegal because they interest rate is so high that most people never get them paid off. All the money they pay towards the loan goes mostly to interest. So on payday they take your pay check and you have to make another loan to live until next pay day when the same thing will happen again.
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#2 written by clickityclack 1 year ago
they are illegal in some states (and should be in all in my opinion) b/c they charge extremely high interest rates and are usually structured by the lender to keep you from being able to pay the loan off quickly or easily. These businesses are considered “predatory lenders.” You can find out everything you need to know on the FTC’s website – http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm
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