Cash-2-U Loans
820 Merrimac Trail Suite C, Williamsburg
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Check Into Cash
455 Merrimac Trail #G, Williamsburg
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OneMain Financial
6610 Mooretown Rd, Williamsburg
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Omni Military Loans
15525 Warwick Blvd Unit 114, Newport News
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Check Into Cash
2366 George Washington Memorial Hwy, Hayes
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Quik Cash
4129 George Washington Memorial Hwy, Hayes
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ACE Cash Express
12917 Jefferson Ave Ste J, Newport News
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Quik Cash
12917 Jefferson Ave # A, Newport News
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Loan Smart
3709, 398 Denbigh Blvd, Newport News
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First Virginia
14350 Warwick Blvd, Newport News
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Advance America
14346 Warwick Blvd #368, Newport News
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Fast Auto Loans, Inc.
13703 Warwick Blvd, Newport News
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Lendmark Financial Services LLC
12551 Jefferson Ave #217, Newport News
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Advance America
6691 Fox Centre Parkway, Gloucester
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Approved Cash
1045 J Clyde Morris Blvd, Newport News
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Check Into Cash
954 J Clyde Morris Blvd Suite 106, Newport News
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Allied Cash Advance
658 J Clyde Morris Blvd B, Newport News
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Quik Cash
731 J Clyde Morris Blvd F, Newport News
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The Loan Store
731 J Clyde Morris Blvd, Newport News
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First Virginia
696 J Clyde Morris Blvd, Newport News
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More About Payday Loan Services from Wikipedia



A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a small, short-term unsecured debt, "regardless of whether repayment of loans is linked to a borrower's payday." The loans are also sometimes referred to as "cash advances," though that term can also refer to cash provided against a prearranged line of credit such as a credit card. Payday advance loans rely on the consumer having previous payroll and employment records. Legislation regarding payday loans varies widely between different countries, and in federal systems, between different states or provinces.


To prevent usury (unreasonable and excessive rates of interest), some jurisdictions limit the annual percentage rate (APR) that any lender, including payday lenders, can charge. Some jurisdictions outlaw payday lending entirely, and some have very few restrictions on payday lenders. In the United States, the rates of these loans used to be restricted in most states by the Uniform Small Loan Laws (USLL), with 36–40% APR generally the norm.


There are many different ways to calculate annual percentage rate of a loan. Depending on which method is used, the rate calculated may differ dramatically; e.g., for a $15 charge on a $100 14-day payday loan, it could be (from the borrower's perspective) anywhere from 391% to 3,733%.$15 on $100 over 14 days is ratio of 15/100 = 0.15, so this is a ''14-day rate''. Over a year (365.25 days) this ''14-day rate'' can aggregate to either 391% (assuming you carry the $100 loan for a year, and pay $15 every 14 days: 0.15 x (365.25/14) = 3.91, which converts to a percentage increase (interest rate) of: 3.91 x 100 = 391%) or 3733% (assuming you take out a new loan every 14 days that will cover your principal and "charge", and every new loan is taken at same 15% "charge" of the amount borrowed: (1 + 0.15)365.25/14 − 1 = 37.33, which converts to a percentage increase (interest rate) of: 37.33 x 100 = 3733%).


Although some have noted that these loans appear to carry substantial risk to the lender,Megan McArdle,''The Atlantic'', 18 November 2009, [https://www.theatlantic.com/business/archive/2009/11/on-poverty-interest-rates-and-payday-loans/30431/ On Poverty, Interest Rates, and Payday Loans]Paige Skiba and Jeremy Tobacman, 10 December 2007, [http://www.cpla-acps.ca/english/reports/Vanderbilt%20Oxford%20profitability%20study%2012%2010%202007.pdf]: The Profitability of Payday Loans. it has been shown that these loans carry no more long term risk for the lender than other forms of credit.


The loan process


The basic loan process involves a lender providing a short-term unsecured loan to be repaid at the borrower's next payday. Typically, some verification of employment or income is involved (via pay stubs and bank statements), although according to one source, some payday lenders do not verify income or run credit checks. Individual companies and franchising have their own underwriting criteria.


In the traditional retail model, borrowers visit a payday lending store and secure a small cash loan, with payment due in full at the borrower's next paycheck. The borrower writes a postdated check to the lender in the full amount of the loan plus fees. On the maturity date, the borrower is expected to return to the store to repay the loan in person. If the borrower does not repay the loan in person, the lender may redeem the check. If the account is short on funds to cover the check, the borrower may now face a bounced check fee from their bank in addition to the costs of the loan, and the loan may incur additional fees or an increased interest rate (or both) as a result of the failure to pay.


In the more recent innovation of online payday loans, consumers complete the loan application online (or in some instances via fax, especially where documentation is required). The funds are then transferred by wiktionary:direct deposit to the borrower's account, and the loan repayment and/or the finance charge is electronically withdrawn on the borrower's next payday.


User demographics and reasons for borrowing


According to a study by The Pew Charitable Trusts, "Most payday loan borrowers [in the United States] are white, female, and are 25 to 44 years old. However, after controlling for other characteristics, there are five groups that have higher odds of having used a payday loan: those without a four-year college degree; home renters; African Americans; those earning below $40,000 annually; and those who are separated or divorced." Most borrowers use payday loans to cover ordinary living expenses over the course of months, not unexpected emergencies over the course of weeks. The average borrower is indebted about five months of the year.[http://www.pewtrusts.org/our_work_report_detail.aspx?id=85899406010 "Payday Lending in America: Who Borrows, Where They Borrow, and Why"] Pew Charitable Trusts, July 18, 2012


This reinforces the findings of the U.S. Federal Deposit Insurance Corporation (FDIC) study from 2011 which found black and Hispanic families, recent immigrants, and single parents were more likely to use payday loans. In addition, their reasons for using these products were not as suggested by the payday industry for one time expenses, but to meet normal recurring obligations. Pew's reports have focused on how payday lending can be improved, but have not assessed whether consumers fare better with or without access to high-interest loans. Pew's demographic analysis was based on a random-digit-dialing (RDD) survey of 33,576 people, including 1,855 payday loan borrowers..


In another study, by Gregory Elliehausen, Division of Research of the Federal Reserve System and Financial Services Research Program at the George Washington University School of Business, 41% earn between $25,000 and $50,000, and 39% report incomes of $40,000 or more. 18% have an income below $25,000.Elliehausen, Gregory. (2009) "[http://www.cfsaa.com/portals/0/RelatedContent/Attachments/GWUAnalysis_01-2009.pdf An Analysis of Consumers' Use of Payday Loans]" Financial Services Research Program. p27.


Criticism


In the United Kingdom Sarah-Jayne Clifton of the Jubilee Debt Campaign said, “United Kingdom government austerity programme, low wages, and insecure work are driving people to take on high cost debt from rip-off lenders just to put food on the table. We need the government to take urgent action, not only to rein in rip-off lenders, but also to tackle the cost of living crisis and cuts to social protection that are driving people towards the loan sharks in the first place.”[https://www.theguardian.com/money/2018/apr/18/nhs-workers-top-list-of-those-applying-for-payday-loans NHS workers top list of those applying for payday loans] ''The Guardian''


Draining money from low-income communities

The likelihood that a family will use a payday loan increases if they are unbanked or underbanked, or lack access to a traditional deposit bank account. In an American context the families who will use a payday loan are disproportionately either of black or Hispanic descent, recent immigrants, and/or under-educated. These individuals are least able to secure normal, lower-interest-rate forms of credit. Since payday lending operations charge higher interest-rates than traditional banks, they have the effect of depleting the assets of low-income communities.[http://www.haworthpress.com/store/ArticleAbstract.asp?sid=DKE104GA332D9N1E7AWC8R1ANDK61RV6&ID=39238 HaworthPress.com]: Howard Jacob Karger, "Scamming the Poor: The Modern Fringe Economy", ''The Social Policy Journal'', pp. 39–54, 2004. The Insight Center, a consumer advocacy group, reported in 2013 that payday lending cost U.S communities $774 million a year.


Advertising practices

In May 2008, the debt charity Credit Action made a complaint to the United Kingdom Office of Fair Trading (OFT) that payday lenders were placing advertising which violated advertising regulations on the social network website Facebook. The main complaint was that the Annual percentage rate was either not displayed at all or not displayed prominently enough, which is clearly required by UK advertising standards.[http://www.creditaction.org.uk/policy-research/latest-news/credit-action-campaigns-on-facebook-debt-ads.html Credit Action Campaigns on Facebook Debt Ads]. Retrieved 2012-11-21.


In 2016, Google announced that it would ban all ads for payday loans from its systems, defined as loans requiring repayment within 60 days or (in the US) having an APR of 36% or more.


Unauthorized clone firms

In August 2015, the Financial Conduct Authority (FCA) of the United Kingdom has announced that there have been an increase of unauthorized firms, also known as 'clone firms', using the name of other genuine companies to offer payday loan services. Therefore, acting as a clone of the original company, such as the case of Payday Loans Now. The FCA strongly advised to verify financial firms by using the Financial Services Register, prior to participating in any sort of monetary engagement.


Aggressive collection practices

In US law, a payday lender can use only the same industry standard debt collection practices used to collect other debts, specifically standards listed under the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from using abusive, unfair, and deceptive practices to collect from debtors. Such practices include calling before 8 o'clock in the morning or after 9 o'clock at night, or calling debtors at work.


In many cases, borrowers write a post-dated check (check with a future date) to the lender; if the borrowers don't have enough money in their account by the check's date, their check will bounce. In Texas, payday lenders are prohibited from suing a borrower for theft if the check is post-dated. One payday lender in the state instead gets their customers to write checks dated for the day the loan is given. Customers borrow money because they don't have any, so the lender accepts the check knowing that it would bounce on the check's date. If the borrower fails to pay on the due date, the lender sues the borrower for writing a hot check. This practice is illegal in many jurisdictions and has been denounced by the Community Financial Services Association of America, the industry's trade association.


Pricing structure of payday loans

The payday lending industry argues that conventional interest rates for lower dollar amounts and shorter terms would not be profitable. For example, a $100 one-week loan, at a 20% APR (compound interest weekly) would generate only 38 cents of interest, which would fail to match loan processing costs. Research shows that, on average, payday loan prices moved upward, and that such moves were "consistent with implicit collusion facilitated by price focal points".[http://www.kansascityfed.org/PUBLICAT/RESWKPAP/PDF/rwp09-07.pdf Federal Reserve Bank of Kansas City, ''Payday Loan Pricing'', February 2009]


Consumer advocates and other experts argue, however, that payday loans appear to exist in a classic market failure. In a perfect market of competing sellers and buyers seeking to trade in a rational manner, pricing fluctuates based on the capacity of the market. Payday lenders have no incentive to price their loans competitively since loans are not capable of being patented. Thus, if a lender chooses to innovate and reduce cost to borrowers in order to secure a larger share of the market the competing lenders will instantly do the same, negating the effect. For this reason, among others, all lenders in the payday marketplace charge at or very near the maximum fees and rates allowed by local law.


Proponents' stance and counterarguments


Industry profitability

In a profitability analysis by ''Fordham Journal of Corporate & Financial Law'', it was determined that the average profit margin from seven publicly traded payday lending companies (including pawn shops) in the U.S. was 7.63%, and for pure payday lenders it was 3.57%. These averages are less than those of other traditional lending institutions such as credit unions and banks.


Comparatively the profit margin of Starbucks for the measured time period was just over 9%, and comparison lenders had an average profit margin of 13.04%. These comparison lenders were mainstream
companies: Capital One, GE Capital, HSBC, Money Tree, and American Express Credit.http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1227&context=jcfl


Charges are in line with costs

A study by the FDIC Center for Financial Research


Markets provide services otherwise unavailable


Proponents of minimal regulations for payday loan businesses argue that some individuals that require the use of payday loans have already exhausted other alternatives. Such consumers could potentially be forced to illegal sources if not for payday loans. Tom Lehman, an advocate of payday lending, said:
:"... payday lending services extend small amounts of uncollateralized credit to high-risk borrowers, and provide loans to poor households when other financial institutions will not. Throughout the past decade, this "democratization of credit" has made small loans available to mass sectors of the population, and particularly the poor, that would not have had access to credit of any kind in the past."


These arguments are countered in two ways. First, the history of borrowers turning to illegal or dangerous sources of credit seems to have little basis in fact according to Robert Mayer's 2012 "Loan Sharks, Interest-Rate Caps, and Deregulation". The report's author, Victor Stango, was on the board of the Consumer Credit Research Foundation (CCRF) until 2015, an organization funded by payday lenders, and received $18,000 in payments from CCRF in 2013.


The report was reinforced by a Federal Reserve Board (FRB) 2014 study which found that while bankruptcies did double among users of payday loans, the increase was too small to be considered significant. In 2008 the Australian states and territories referred powers of consumer credit to the Commonwealth. In 2009 the ''National Consumer Credit Protection Act 2009'' (Cth) was introduced, which initially treated payday lenders no differently from all other lenders. In 2013 Parliament tightened regulation on the payday lending further introducing the ''Consumer Credit and Corporations Legislation Amendment (Enhancements) Act 2012'' (Cth) which imposed an effective annual percentage rate cap of 48% for all consumer credit contracts (inclusive of all fees and charges). Payday lenders who provided a loan falling within the definition of a small amount credit contract (SACC), defined as a contract provided by a non authorised-deposit taking institution for less than $2,000 for a term between 16 days and 1 year, Payday lenders who provide a loan falling within the definition of a medium amount credit contract (MACC), defined as a credit contract provided by a non-deposit taking institution for between $2,000–$5,000 may charge a $400 establishment fee in addition to the statutory interest rate cap of 48%. Payday lenders are still required to comply with Responsible lending obligations applying to all creditors. Unlike other jurisdictions Australian payday lenders providing SACC or MACC products are not required to display their fees as an effective annual interest rate percentage.
Bill C28 supersedes the Criminal Code of Canada for the purpose of exempting Payday loan companies from the law, if the provinces passed legislation to govern payday loans.http://laws-lois.justice.gc.ca/eng/acts/c-46/page-166.html Payday loans in Canada are governed by the individual provinces. All provinces, except Newfoundland and Labrador, have passed legislation. For example, in Ontario loans have a maximum rate of 14,299% Effective Annual Rate ("EAR")($21 per $100, over 2 weeks). As of 2017, major payday lenders have reduced the rate to $18 per $100, over 2 weeks.


UK

The Financial Conduct Authority (FCA) estimates that there are more than 50,000 credit firms that come under its widened remit, of which 200 are payday lenders. Two-thirds of borrowers have annual incomes below £25,000. There are no restrictions on the interest rates payday loan companies can charge, although they are required by law to state the effective annual percentage rate (APR). In the early 2010s there was much wonga.com#Politicians.


In 2014 several firms were reprimanded and required to pay compensation for illegal practices; Wonga.com for using letters untruthfully purporting to be from solicitors to demand payment—a formal police investigation for fraud was being considered in 2014
Payday loans are legal in 27 states, and 9 others allows some form of short term storefront lending with restrictions. The remaining 14 and the District of Columbia forbid the practice. The annual percentage rate (Annual percentage rate) is also limited in some jurisdictions to prevent usury. And in some states, there are laws limiting the number of loans a borrower can take at a single time.


As for federal regulation, the Dodd–Frank Wall Street Reform and Consumer Protection Act gave the Consumer Financial Protection Bureau (CFPB) specific authority to regulate all payday lenders, regardless of size. Also, the Military Lending Act imposes a 36% rate cap on tax refund loans and certain payday and auto title loans made to active duty armed forces members and their covered dependents, and prohibits certain terms in such loans.


Variations and alternatives


Alternatives to payday loans

Other options are available to most payday loan customers.[http://www.dispatch.com/content/stories/business/2014/11/23/ways-to-get-quick-cash-besides-a-payday-loan.html "Ways to get quick cash besides a payday loan"], ''The Columbus Dispatch'', November 23, 2014 These include pawnbrokers, credit union loans with lower interest and more stringent terms which take longer to gain approval,[https://www.usatoday.com/money/perfi/general/2006-09-19-credit-unions-usat_x.htm "Breaking the cycle of payday loan 'trap'"], ''USA Today'', September 19, 2006 employee access to earned but unpaid wages,[http://www.njbmagazine.com/cart/digital_articles/December%202011/122011smartventures.html "Making Payday Flexible"], ''New Jersey Business'', December 2011[http://www.businessweek.com/small-business/persuading-small-employers-to-advance-wages-07192011.html "Persuading Small Employers to Advance Wages"], ''Bloomberg Businessweek'', July 19, 2011[http://www.americanbanker.com/issues/177_106/FlexWage-payday-loans-overdraft-payroll-cards-prepaid-1049818-1.html "With Payday Loans under Scrutiny, Startup FlexWage Offers Alternatives"], American Banker, June 1, 2012[http://financialservices.house.gov/UploadedFiles/092211manturuk.pdf "Testimony of Dr. Kimberly R. Manturuk, Center for Community Capital, University of North Carolina at Chapel Hill, Before the Subcommittee on Financial Institutions and Credit for Consumers, United States House of Representatives, Hearing on 'An Examination of the Availability of Credit for Consumers,'"] Page 5, September 22, 2011[http://financialservices.house.gov/Calendar/EventSingle.aspx?EventID=260305 "Hearing entitled 'An Examination of the Availability of Credit for Consumers'"], The Committee on Financial Services, September 22, 2011[http://www.businessweek.com/magazine/cash-from-the-boss-to-replace-payday-loans-10202011.html "Cash from the Boss to Replace Payday Loans"], ''Bloomberg Businessweek'', October 20, 2011 credit payment plans, paycheck cash advances from employers ("advance on salary"), auto pawn loans, bank overdraft protection, cash advances from credit cards, emergency community assistance plans, small consumer loans, installment loans and direct loans from family or friends. The Pew Charitable Trusts found in 2013 their study on the ways in which users pay off payday loans that borrowers often took a payday loan to avoid one of these alternatives, only to turn to one of them to pay off the payday loan.


If the consumer owns their own vehicle, an auto title loan would be an alternative for a payday loan, as auto title loans use the equity of the vehicle as the credit instead of payment history and employment history.


Other alternatives include the Pentagon Federal Credit Union Foundation (PenFed Foundation) Asset Recovery Kit (ARK) program.


Basic banking services are also often provided through their postal systems.


Comparisons payday lenders make

Payday lenders do not compare their interest rates to those of mainstream lenders. Instead, they compare their fees to the overdraft, late payment, penalty fees and other fees that will be incurred if the customer is unable to secure any credit whatsoever.


The lenders may list a different set of alternatives (with costs expressed as APRs for two-week terms, even though these alternatives do not compound their interest or have longer terms):


Income tax refund anticipation loans are not technically payday loans (because they are repayable upon receipt of the borrower's income tax refund, not at his next payday), but they have similar credit and cost characteristics. A car title loan is secured by the borrower's car, but are available only to borrowers who hold clear title (i.e., no other loans) to a vehicle. The maximum amount of the loan is some fraction of the resale value of the car. A similar credit facility seen in the UK is a ''logbook loan'' secured against a car's V5C, which the lender retains.{{cite web
ing and reselling the car.


Postal banking

Many countries offer basic banking services through their postal systems. The United States Post Office Department offered such as service in the past. Called the United States Postal Savings System it was discontinued in 1967. In January 2014 the Office of the Inspector General of the United States Postal Service issued a white paper suggesting that the USPS could offer banking services, to include small dollar loans for under 30% APR.


Further reading



  • Baradaran, Mehrsa (2015). ''How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy.'' Harvard University Press. )
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