There is a lot of loans news from around the world lately. I have seen stories locally and from around the country that are talking about the high interest rate loans that are being offered with ease for things likes that title loans for the slip to your car, to payday loans that offer to cash a personal check and hold that check until “payday”. There are also tax refund advance anticipation loans that are being done at many locations, often quick and easily, but I wonder how many of those people who are getting these loans are reading the newspaper.
There are stories coming out everywhere about these quick loan places hurting the poor of our country, and in some places there are governments that are stepping in to regulate title loans, payday advance loans and more. I have even read that many of the quick check cashing places are being investigated by feds who believe that a lot of illegal immigrants are using the check cashing facilities to cash checks with little identification credentials.
NPR ran a story about how payday loans are hurting New Mexico’s poorest people, I believe the reasoning applies to more than just the people of New Mexico.
Yahoo Finance has a story in association with the California Reinvestment group, that explores how tax anticipation loans are hurting the poor in our country.
“RALs are completely unnecessary,” said Rhea Serna, California Reinvestment Coalition policy advocate. “Just waiting a couple of days for a tax refund can save someone hundreds of dollars! This is money that can be used for bills, groceries or other needed household expenses.”
Tax filers should be warned that RALs are not instant refunds; they are predatory short-term loan products. If tax filers paying to get their taxes prepared receive a refund immediately (or even within a week), they are probably receiving a RAL rather than their actual refund. These loans come with an average interest rate of 178 percent, but can be as high as 700 percent depending on the size of the loan. And they mostly hurt low-income tax filers.
More loans news reviews coming in future posts! Stay tuned with our loans rss feed!