At times situations arise when cash is urgently needed and there is not enough time to apply for a traditional loan. Or else, bad credit history comes in the way. A payroll cash advance come handy in such situations as this loan is given without a credit check. It must be paid back on the next payday. However, the higher costs of no credit check cash loans attract legislative attention in various forms.
The Legal Status of Quick Cash Advances
In the United States, the pay check cash advancing companies are primarily regulated by individual states. These easy cash advances are legal in 37 states. In the remaining 13 states they are legally not allowed. Where legal, the regulations generally specify the maximum lending rate in terms of annual percentage rate (APR). A $100 loan for two weeks at a charge of $15 implies an annual interest charge of 390%. Stated simply, if the loan is renewed every two weeks for one year, the interest cost will be 15 X 26 = 390 dollars. In October 2006, the US Congress passed a law restricting APR to 36% for lending to military personnel. States also often restrict the number of renewals or number of no credit check cash loans in one year. To help the borrowers, FDIC has also advised it member banks to allow the borrower a longer payment term after six renewals.Read more »