PayDay Cash Loans

Don't Pay Up to 800% on Payday Loans

It can happen to anyone. Unexpected expenses, a cutback in hours, or the layoff of a spouse can cause a family to live paycheck-to-paycheck. In these times money can be tight and payday can't get here soon enough to cover expenses or pay bills in time.

As a response to PayDay lenders, BayPort Credit Union is now offering enough to cover expenses or pay bills on time.

Payday lenders popped up all over our neighborhoods and communities to take advantage of people in this situation. While they seem to offer a quick and easy way to get you to payday, they actually come with fees hundreds of times greater than the PayDay Cash loans. These loans are designed to provide you with means to weather the storm:

How Payday Loans Work

With traditional payday loans, a customer writes a personal check made out to the lender. The lender agrees to hold the check for a specified period of time before depositing it - usually until the customer's next payday, or up to about two weeks. In exchange, the payday lender advances a cash payment to the customer that is somewhat less than the amount of the check.

The difference is the finance charge on the loan. The amount of the finance charge and the duration of the loan determines the interest rate of the loan. A typical payday loan might extract a $15 to $25 fee for each $100 advanced. So, in a typical transaction, a borrower might write a check for $235 to receive a $200 loan. Sounds reasonable, right?

Payday Loans Just Don’t Add Up

If you do the math, you'll find otherwise. That $15 to $25 per $100 borrowed actually computes out to an annual percentage rate of 600% to 800%! And these fees can be even higher if the loan is rolled over for an extended term.

Under the Truth in Lending Act, the cost of a payday loan must be disclosed just like any other form of credit. Borrowers must receive, in writing, the dollar amount of finance charges and the annual percentage rate (which represents the cost of the credit on a yearly basis). Organizations such as the Federal Trade Commission and the Better Business Bureau advise consumers to verify the terms of any loan they consider. If these disclosures are not made in writing, you should report the lender to the proper authorities.