Tuesday, December 18, 2018

What is a Payday Loan in San Clemente

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Payday Loan: Why It Is a Lifeline Today The payday lending perseverance has grown exponentially over the last 15 years. It is estimated that over 20 million Americans use payday loans every lunation. Over the past few ages, the payday lending industry has appear under increasing scrutiny by various regulatory bodies, and in exact the Consumer Financial Protection Bureau (CFPB).

Have you received a pre-approved offer in the mail this holiday season that looks like a check, made out to you and ready to cash? Before you rush to the bank, visions of presents dancing in your head, know that it’s not free cash. Rather, it’s more likely an expensive loan.

Such pre-screened mail offers, or “live checks,” are personal loans sent from banks or lenders to consumers who meet certain criteria, like a minimum credit score. Cashing the check enters you into a loan agreement that may last multiple years and have an annual interest rate above 25 percent.

Chris Jackson received a live check in the mail last November for $2,500 with a 28 percent interest rate. Jackson, a financial planner, was skeptical, but his family reacted differently.

“I asked my family what they would do with [the check], and of course they said they would cash it,” says Jackson, founder of Lionshare Partners, a financial planning firm in Los Angeles.


Collateral-based loans lend when something of value is used to back the loan, leaving this to be a safe option. You take in something you own, and if the pawnbroker is interested, he or she will offer you a loan based on it's value. The pawnbroker then keeps your item until you repay the loan. No credit checks are conducted and interest rates are as low as 2%. This appears to be the best loan option before payday.

Learn more about collateral lenders in the San Clemente area!

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