About Payday Loans
Payday loans originated in the early 1990’s when the country was going through a particularly hard fiscal time. They were originally made by small independent stores that also offered check cashing services for those who did not have a bank account. They moved to more modern stores with owners offering payday loans, as well as other financial services such as Western Union, and money orders. Today, these payday loan companies have evolved even more, and are popping up literally everywhere, from the mall to Internet.
The Internet payday loan companies are making up more than 80% of the industry, with more following suit everyday. This is because of the ease and convenience of applying for a payday loan on your computer, day or night. You rarely even have to speak with someone by phone, and in some cases you don’t have to fax any information about yourself or run a credit check.
While brick and mortar payday loan companies are finding it hard to compete with the Internet loan companies, they do have help. Surprisingly, banks are often joining in with payday loan companies, by providing the capital or money to payday lenders specifically to states that prohibit payday loan companies.
State laws govern whether payday loans are permitted in a particular state. Right now 36 states allow it, but many others that do not have the option of opening up stand-alone companies are brokering arrangements or what is called a rent-a-charter agreement with regular banks in hopes of cashing in on this big business. In only two states do they have legislation that has been enacted to avoid this, and those two states are Georgia and Maryland. In any other state you can either receive an Internet payday loan, or one that you find in your phone book.
Filed under: About Pay Day Loans
