Payday Loan Myths

Myth: Payday loans are overwhelmingly expensive and carry extremely
high interest rates.

Fact: Payday loans are perfectly manageable for responsible individuals. They operate on a fixed rate (for example, $15 for every $100 borrowed), and, when compared to other alternatives (bouncing a check, late fees, etc.), cash advance payday loans are actually a more economical option.

Myth: Payday loan lenders are “loan sharks” that feast upon vulnerable
consumers and trap them in an untenable situation of debt and despair.

Fact: There are always a few “bad apples” that will try to take advantage of the less-fortunate, but if you do your research and read the fine print, you will find that most payday loan lenders are willing to help you get out of your financial crisis. Millions of consumers have turned to payday loans as a safety net and are able to repay a payday loan once they receive their paycheck.

Myth: There are numerous hidden fees and misleading terms with a payday loan.

Fact: Payday loan rates include single, flat fees and there are absolutely NO hidden charges or accruing interest with a payday loan.

Myth: Payday loan lenders take advantage of the poor and disadvantaged.

Fact: Statistics show that the largest customers of payday loan cash advances are the middle class, or those who are currently employed with steady income and an active checking account. At its core, payday loans are ideal for those hard-working individuals who have an emergency financial need that cannot be met with conventional bank loans or other means, so they turn to payday advance loans.

Myth: The payday loan industry is unregulated.

Fact: Practically every state has very detailed regulations regarding payday loans. States have complete oversight over the payday loan industry and monitor how payday loan companies do business with consumers. Every payday loan company is required by law to disclose any application fees, payday loan rates, and other fees – this is called the Truth In Lending Act.