New Responsible Lending Laws About Payday Loans With No Credit Checks

Though many states have already banned all sorts of payday lending programs, including payday loans with no credit checks, many others where this form of lending is still legal are in the process of coming up with stricter laws that should keep a check on it. The biggest problem with this type of lending is that it is unreasonably very costly and that low-income consumers are its main target customers. They borrow very small amount of loans, but they have to repay a significantly much larger sum of money. For example, a recent real life example that was publish in a local newspaper was about a consumer who borrowed a small payday loan of $300 for a period of three weeks only and was expected to pay back over $850. For a person with low income, it is almost impossible to arrange that much fund to ensure timely repayment. When they fail to repay the loan in time, it traps them into a never ending series of debts.