For years, maybe even decades, the government has been trying to crack down on payday loans. Not just payday loans, but any loan that comes from the world of “alternative finance.” The big banks do not like for outsiders to get into the business, and so they have government watchdogs make lending laws to restrict small businesses.
The problem comes from the fact that the big banks leave tens of millions of Americans out in the cold. Alternative lenders like installment loans, payday loans, microloans, and title loans continue to grow and flourish despite government regulation and interference.
Why do they keep growing? Because people need them!
Lending Laws and Online Borrowing
Each state in America sets its own financial laws and regulations. The federal government also creates its own laws and agencies. The Consumer Financial Protection Bureau, for example, is specifically to watch for institutions trying to circumvent the law or otherwise trick the American people.
The lending laws for borrowing money, depend on where you live and what kind of loan you are looking for. Many forms of online lending are not considered payday loans. But the laws and regulations have been changing so rapidly it is also best to consult a recently updated, and reliable, source for the most current information updates.
One great resource to use, when determining what loan (and what lender) is right for you, is the National Conference of State Legislatures. This website breaks down the specific laws state by state, so you can find out what laws apply to you.
If Possible, Avoid Payday Loans Entirely
While you are checking out lending laws, keep in mind that installment loans provide a safer, cheaper alternative to the traditional payday loan. These loans off er a more a simple repayment schedule. With locked in interest rates, and no early payment fees, National Small Loan installment loans are the superior alternative.