Payday Loan SCAMS Consumer Alert!!!
- the Federal Trade Commission
Check cashers, finance companies and others are making small, short-term, high-rate loans that go by a variety of names: payday loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans.
Usually, a borrower writes a personal check payable to the lender for the amount he or she wishes to borrow, plus a fee. The company gives the borrower the amount of the check minus the fee. Fees charged for payday loans are usually a percentage of the face value of the check, or a fee charged per amount borrowed - for instance, for every $50 or $100 loaned. And, if you extend or "roll-over" the loan - say for another two weeks after you're supposed to pay it back - you'll pay the fees for each extension.
Under the federal Truth in Lending Act, the cost of payday loans must be disclosed.
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