Payday Loan Times

News About the Ever Changing Payday Advance Industry

New Website Launched to Help Educate Consumers on Risks of Payday Loans

Filed under: National, New York — Desmond Carlisle at 8:03 am on Wednesday, June 14, 2006

You Should Know Before You ApplyWhile a payday loan may seem appealing to people who are in need of cash fast, consumer advocates are trying to encourage alternatives.

The Consumer Federation of America (CFA), a non-profit association of 300 pro-consumer groups, doesn't see the benefits of payday loans. The small cash advances secured by a borrower's personal check and due in full on the borrower's next payday just result in financial danger, according to the Elmira (N.Y.) Star-Gazette.

In May, the CFA created a website,, to help consumers learn more about these loans. The site features facts about how the payday loan process works, as well as industry information, the legal status of payday advance lending, and relevant state laws.

On the site, an interested consumer can calculate the cost of using online payday loans by entering the dollars borrowed, fees charged, and length of the loan. A visitor to the site can also see the impact of not repaying the advance on time by entering the number of renewals or rollovers used during the course of a year, the consumer group's news release states.

"Consumers may be shocked to find out how expensive it is to use payday loans," said Jean Ann Fox, CFA's Director of Consumer Protection, in the release. "CFA's webite provides consumer-oriented advice and information to help protect borrowers against becoming trapped in high-cost, high-risk payday lending."

Visitors can click on their state to connect with state regulators to file complaints and/or get more information about cash advance loans.

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