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A cash advance or payday loan is a short term loan. It has considered as a personal loan that means that you do not need to provide a collateral. In most cases, the borrower has to pay the loan within one week to a couple of months at most.
In the United States, federal law gives way to state legislation when it comes to payday loans. In Alabama, as in 32 other states, payday loans or cash advances are considered legal. The controlling law is the Alabama Code §§ 5-18A-1 et seq. This means that payday lenders can establish a business address in Alabama and provide payday loans to individuals within and outside of the state. In fact, as of 2004 there are more than 1,000 payday lenders in Alabama alone.
The law states that:
Alabama Banking Department vs. Alabama Check Cashers Association is a landmark case pertaining to Alabama payday loans. In gist, Judge Eugene Reese ruled that cash advance loans are separate and distinct from other small loans. Hence, it cannot be subjected to the same interest, rules, and regulation a stated in the Small Loan Law of Alabama.
The same is an online Alabama payday loans provider. One hundred percent (100%) of their business is conducted online within and outside of Alabama. They are compliant with state legislation and is considered as a rising star when it comes to online payday loan companies. This is because they provide:
The reason is different for each individual. This includes but is not limited to:
What remains constant is that you need cash and you need it fast. Some would say that the 456.25% APR is just too much. Some even compare the rates to home loans, skytrail cash and auto loans. In the first place, there is no comparison. Long term loans can afford to charge lower rates because they are secured and there are dozens if not hundreds of installment payments. In the second place, the alternative is not being able to make the payment. In which case the ramifications may even be more financially damaging, among other things.
As a general rule no criminal complaint can be filed by the lender as against the borrower by reason of unpaid Alabama payday loans. By way of exception, if the borrower issued a check and the same is returned with the reason “closed account,” then a criminal case will prosper. The general rule is there to protect borrowers from harassment by lenders. The exception is there to punish blatant acts of fraud by the borrower as against lenders.
You cannot pay your electricity bills on time. A payday loan can allow you to pay it when it falls due. But you do not want to pay interest so you allow your utilities to get cut. How much is the reconnection fee, add in the opportunity cost of not being able to use this utility. Now add to that the embarrassment you and your household will feel for being the only house in your neighborhood without electricity.
The Alabama Department of Industrial Relations (DIR) and the Bureau of Labor Statistics (BLR) puts the unemployment rate at:
Without a source of income, how can someone unemployed possibly deal with all his household expenses until he secures another job? Considering the fact that you need to be employed to actually have a chance at loan approval, is there a way for these unemployed individuals to get the financial lifeline they need? The answer is yes. Since most payday loans already fore go the submission of pay-stubs, an unemployed person can actually apply for one and get approval. This is if the application is filed within a couple of weeks from unemployment. This is because credit reports take a week or two, sometimes even a couple of months, to update employment information.
Another situation wherein someone unemployed would have to deal with a payday loan would be if he availed of the loan before he lost his job. When the due date falls at a time when the borrower is without employment and without a source of income, he could actually ask for a repayment plan.
A repayment plan is allowed by Alabama law. You can only ask for this once, and only if you do so before your loan repayment becomes due. So make it count. This is at no added charge. The bottom line is, Alabama payday loans can be used by a recently out of the job consumer to tide him over for a couple more weeks.
Before you apply for Alabama payday loans, it is advised that you read up on a few important articles. For a more complete picture, you can also refer to information found within the sites of regulatory entities like the State of Alabama Banking Department. Tip: they have this useful tab that allows you to enter the name of the entity and then the database will search for licenses they applied and got approval for.
A payday loan is a debt. Hence, the borrower has to repay the amount he borrowed plus any interests or charges as stipulated in the loan agreement. There is also the simple fact that payday lenders can charge so much because the statistical data of borrowers who default is extremely high. In other words, if more payday loan borrowers pay their debts, then the risk to the lenders are mitigate and the interest rates also fall. Being a responsible borrower benefits both the lender and the borrower.
To file a complaint or to verify your lender’s licensing credentials, please contact:
Alabama Banking Department
P.O. Box 4600
Montgomery, AL 36103
Phone: (334) 242-3452
Fax: (334) 242-3500