Payday advances and short-term installment loans prey regarding the urgent need of individuals for small-dollar quantities and cost extremely high fees and interest into the borrowers. PayActiv is promoting a fintech solution, a genuine alternative to payday advances that will help ordinary used individuals avoid these debt-traps of predatory financing and start to become self-reliant in handling their costs.
In the last few years, state and federal laws have been passed away to manage the pay day loan industry https://www.fastcashcartitleloans.com/payday-loans-az/ to be able to protect customers through the misleading techniques of loan providers. The lenders have introduced an off-shoot of payday loans called short-term installment loans, which allow borrowers to repay the loans over six months or longer, but an average borrower still ends up paying 2 to 3 times of the borrowed amount despite that, in response to the opposition of single-payment loans.
Significance of small-dollar loans
Estimated 40% of populace that are either unbanked or underbanked (25% of U.S. home) borrow through small-dollar loans, rent-to-own agreements, pawn stores, or reimbursement expectation loans (FDIC, 2009).Read More