Payday Loan Pilot - Your Guide to Payday Loans, Cash Advance, and Cash Loans

Payday Loan Pilot – Your Guide to Payday Loans

Written on August 18, 2010 by The Captain in Payday Loans

Welcome to Payday Loan Pilot! Your guide to payday loans, cash advance, and cash loans. We are the number one resource on the web to help you find your next payday loan. All reviews on this website are accurate and 100% free of bias. We do not sell any loans through this website, but encourage you to support our sponsors.

Before you do anything it’s important to learn as much as you can about a payday loan before you take one out. They can be highly beneficial in times of need, but dangerous as well due to the high interest rates.

At our site we allow you to look up the Payday Loan Laws in your state and also provide a wide variety of basic informative articles.
If you are looking for an online payday loan or a no faxing loan check out our online resource.
If you are looking for a payday lender in your State please refer to our lender directory.

Well that’s it! If you need any more help feel free to leave a comment and we will get back to you! Safe travels.

It’s Time to Do Away with the Payday Loan Industry

Written on November 13, 2011 by News in Interest rates, Payday Loans

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Review of Editorials

Imagine how the Golden State would shine if it had lawmakers with the moral character of Holly Petraeus, wife of CIA Director and retired Army Gen. David Petraeus. Holly has become an impassioned advocate for returning military veterans. In that capacity, she has taken on for-profit colleges and payday lending outfits who are trying to shake dollars loose from men and women who have served their country.

On the other side

We have the Calderon brothers. Assembly Majority Leader Charles Calderon, D-Whittier, and Sen. Ron Calderon, D-Montebello, are the Assembly and Senate’s largest recipients of campaign cash from the payday loan industry. At most payday shops, a borrower can get a loan in exchange for a postdated check, which he or she agrees to pay off in two weeks or a month. Lenders usually charge a 15 percent fee, or $45 on a maximum $300 loan. But borrowers often have to take another loan to pay off the previous one.

Predatory

The Department of Defense has described payday lenders as “predatory” and a threat to troop morale and national security. Congress passed a law capping interest rates at 36 percent on payday loans made to U.S. military service members. That drove the industry to civilian clients and places such as California, where Charles Calderon had passed a bill that legalized payday lending, capping each loan at $300. Now he wants the cap to be $500. Calderon, his brother and other lawmakers have raked in campaign contributions from the payday loan industry. The two Calderons received more than $81,000 from the industry between 2003 and 2011.

A Quarter of Americans Have Turned To Payday Loans

Written on November 12, 2011 by News in Bank loans, Banks, Lenders, Payday Loans

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Research Shows that Online Payday Loans are One of the Fastest Growing Segments for Lenders

It’s all to do with emergencies: New tires for the car. An unexpected trip to the emergency room. An afterhours call to an electrician to fix a blown circuit in the house. These are just a few of many examples of what can and does happen in an average month to many people. For those who are living paycheck to paycheck, meaning a significant number of Americans, these situations are not only stressful, they can also figuratively break the bank.

Budget

Unbudgeted expenses use up money that was earmarked for groceries or other living expenses, and if payday is not in the immediate future, it can be pretty difficult to make it until the next paycheck comes in. Traditionally, people needing extra money would head to their local bank to ask about a loan, which would involve a lengthy and time-consuming application process. In the case with all lenders who handle payday loans, certain restrictions do apply: for example, applicants must be typically 18 years or older with a checking account, a phone number, and a steady income of usually at least $500 to $1,000 a month. For people who meet the qualifications, payday loans tend to go very smoothly. Compared to a traditional bank, a payday lender has no interest in why a borrower needs the money.

Collateral

A bank will often require collateral and the reasons for the loan. Even then a bank can decline a loan request. A payday lender isn’t as difficult to work with and won’t ask about a borrower’s reasons for needing a loan. For clients who would like to try for a payday loan, but are feeling unsure about the process, statistics have shown that they are in good company. As of 2009, a federal government study showed that about 25 percent of Americans had consulted a payday lender or similar service in the past year.

Curbs Needed On the Payday Lending Industry

Written on November 5, 2011 by News in California, Interest rates, Payday Loans, Sacramento

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Mercury News editorial: If state won’t ban predatory payday lending, cities and counties must restrict it

Condemning lobbyists’ influence in the state Capitol, a large group of California leaders on Monday called for curbs on payday lending to better protect consumers from the spiraling debt that accompanies the triple-digit interest rate loans. This reaction comes after a Bay Area News Group investigation outlined the hazards of payday loans and the industry’s warm reception in Sacramento.

California growth

Payday loans, which burden the working poor with annual interest rates as high as 460 percent, have grown in California, even as 17 states and the U.S. military have effectively banned the cash advances on paychecks. In contrast, state lawmakers here are now pushing a bill to expand lending amounts and fees, while accepting ever-more campaign contributions from payday lenders.

Regulate

On Monday, however, two state senators joined Insurance Commissioner Dave Jones in calling for stepped-up regulations on payday lenders, either through a ballot measure or new legislation. “People are forgoing food, clothes or transport in order to pay back these loans,” Jones said. A former Assembly member, Jones said he introduced a bill in 2007 similar to those in other states that cap interest rates at 36 percent because “the evidence was really compelling that the rules needed to be changed in California.”

Call for a cap

Two senators who sit on the committee that will soon hear the industry-backed bill to expand payday lending agreed with Jones that interest rates need to be capped. A growing number of skeptics are joining consumer advocates in efforts to protect low-income borrowers from the debt trap that often accompanies payday loans. Lt. Gov. Gavin Newsom told this newspaper in April that curbing the industry was one of his top priorities and that he was in discussions about a 2012 ballot measure to bypass the Legislature. “These guys just buy us off,” Newsom said at the time.

At local level

San Jose Councilman Ash Kalra said he will push for a payday lending moratorium as soon as the city’s staff completes a study on payday lenders. And Tuesday, the East Palo Alto City Council will discuss ways to limit the lenders from coming to their small, working-class town. Cities and counties can’t limit interest rates, but they can use local land-use and permitting laws to curtail new businesses and restrict their scope. Many local efforts are receiving funds from the Silicon Valley Community Foundation, the largest funder of Bay Area nonprofits. The foundation has directed almost $1 million to anti-payday lending campaigns, which include stepped-up local rules.

The lenders

Payday lenders argue they are already adequately regulated in California, where loan amounts have been capped since 1996. A pending bill by Assemblyman Charles Calderon, D-City of Industry, would increase limits on payday loans from $300 to $500, increase one-time fees from $45 to $75. Interest rates on the typical two-week loan are calculated on an annual basis, which amounts to 460 percent. But lenders have limited recourse to go after delinquent borrowers, and cannot pursue criminal charges.

A Different Slant on Payday Loans

Written on November 4, 2011 by News in Interest rates, Loan fees, Payday Loans

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Californians think another way

An investigative reporter’s expose of the “payday loan” business and its lobbyists was recently displayed in a big, front-page story in the October 30th issue of the San Mateo County Times. According to the reporter: “In California lenders charge up to $45 in fees on a maximum $300 loan. This amounts to an interest rate of 460 percent, trapping some borrowers into a never-ending cycle of debt.”

One step at a time

Whatever the merits or demerits of the rest of the argument, $45 is not going to trap anyone in a never-ending cycle of debt, even if they are making only the bare minimum wage. Personal irresponsibility in managing money can trap anyone, but that is regardless of whether or not they take out payday loans.

460 percent rate of interest

You don’t need higher math to figure out that $45 is 15 percent of $300. How did we get to 460 percent? Very simple: By distorting the actual conditions of most payday loans. As the name might suggest, payday loans are short-term loans to tide people over until they get their next check, whether a salary check, a welfare check or whatever. Payday loans are small sums of money borrowed for short periods of time, often by low-income people who want some cash right now, for whatever reason. The 460 percent figure comes from imagining that the borrower is not just going to borrow the money for a couple of weeks, but is going to keep on borrowing every couple of weeks all year long.

Wrong reasoning

Using this kind of reasoning, you could quote the price of salmon as $15,000 a ton or say a hotel room rents for $36,000 a year, when no consumer buys a ton of salmon and few people stay in a hotel room all year.

The $45 fee

What about the $45 that is at the heart of all this runaway rhetoric? Does that do more than cover the risk and the costs of processing the loan? Apparently our crusading investigative reporter did not find that worth investigating, even in a long article taking up another page and a half inside the newspaper. What is called “interest” by the media includes things that an economist would not call interest. The fees charged must also cover the cost of processing the loan, which is to say the pay of people doing the work, the rent of the premises and other overhead expenses, as well as the risk of default.

Mundane facts

But mundane facts like these would spoil the moral melodrama, starring the reporter on the side of the angels against the forces of evil. Instead, we get the story of how the payday loan industry, like most other industries, has lobbyists contributing money to politicians to try to get spared more regulations. The investigative reporter calls this “protect-ing” the payday loan industry. Protecting them from what? From the politicians. Some would call their campaign donations “protection money,” in the same sense in which the Mafia collects protection money. None of this is peculiar to this industry, to California or to our times. When Al Gore was Vice-President of the United States, he phoned businesses to tell them how much money he expected them to contribute to political campaigns.

Payday Loan Franchise?

Written on November 1, 2011 by Payday Loan Industry in payday loan franchise, start payday loan business, Trends & Tactics

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I received a call this morning from John. John wants to start a payday loan business. He’s been researching the payday loan industry for 6 months. John’s question, “Should he buy a franchise?”

This particular payday loan franchise company requires John to have about $215,000 to open. This consists of a $35,000 one-time franchise fee, $65,000 for build-out, $15,000 for software, signage and miscellaneous marketing materials. This leaves roughly $100,000 “for the street.”

Finally, a 6% monthly commission must be paid to the Franchisor “on the gross revenue of the business.” That’s 6% on the gross revenue! As John explained this to me, the Franchisor has a system for payday loans – nothing else. That means, if John develops a scrap gold buying business or if John adds car title loans, or anything else for that matter, he must pay 6% on his total gross revenue; this despite the fact that the Franchisor offers zero support and expertise for these additional services.

This Franchisor cannot guarantee a specific return, but they imply John will earn 18%/month EBITDA. (This using a licensing model allowing 15% of the face amount of the loan to the consumer.) Of course, as in life, this potential return depends on a lot of factors. There are no guarantees.

So… should John purchase a franchise? With zero hesitation, I responded to John with an emphatic, “NO.”

BUT, I began to listen to the path John was on. I sensed the frustration John was experiencing. AND I sensed the answer to his initial question requires a macro perspective rather than a simple yes or no to, “Should I buy a payday loan franchise?”

For the past 6 months, John has used Google.com for keyword searches like, “how to start a payday loan business, payday loan software, payday loan industry, payday loan customer demographics, payday loan lawyer” and on and on…

He’s called and participated in demo’s of various payday loan software vendors such as eChecktrack, Answers, Epic, Azo Blue (Apogee), PLM (Infinity), Alpha Omega, IntroXL, TranDotCom, eCash, EData and more.

Additionally, John has reached out to legal counsel including Paul Soter, Claudia Calaway and Hillary Miller to discuss compliance, consumer contracts, arbitration agreements, licensing models (choice-of-law, state-by-state, offshore)… This led John to Allen Parker and the tribe model (sovereign nation), and Michael Brown at CAB Consulting (CSO to CAB transition).

John talked with the consumer data scrubbers; Clarity, DataX, CoreLogic-Teletrack, Idology, Factor Trust, and more.

And of course, John contacted a few ACH providers like Advantage Resources, LST, ACH Works and the new payday loan”wire transfer” provider introduced at OLA. ($3.00 wire transfers using the EFT Network rather than the ACH system.)

Then there are the web site builders like Frank Masotti, the lead generators, the SEO and SEM companies, outsourcing of call centers vs in-house, analytics experts, collection companies, reputation management companies…

After doing all this research and reading some of our training and start-up materials, John still didn’t have clear answers to questions such as:

Is the PDL industry saturated? Is there room for another payday loan lender? Maybe I should lend capital to an existing operator? (For example, there’s a team with 50 brick-n-mortars in 3 states offering 10% returns with personal guarantees. Or, an operator in Las Vegas with 3 locations is offering 3% per month with car titles as collateral.) Or, John wonders if he should act as a 3rd party Texas Lender by making capital available backed by a CD and an Irrevocable Letter of Credit? He’s been told he can earn 15% – 24% annually on his capital with very little risk.

John has determined there is a TON of opportunity in the payday loan – micro lending space! The puzzle for John is to figure out HOW we wants to play it based on his goals, his family situation, his existing skill set, and his appetite for risk.

So… John asks himself the following:

Internet or store or both?

How do I market? Online and off-line?

Do I focus solely on payday lending and cash advance?

What other products and services make sense to add to my PDL business?

Do I really need to invest in a franchise system or can I do this on my own?

I’m concerned about my family (John’s health is questionable and he has a wife and 1 child) and their ability to carry on the business should something happen to me. Would my being part of a franchise system reduce this risk and add value to my new enterprise?

Do I need legal counsel on retainer or can I rely on the Franchisor to keep me compliant?

As a Franchisee, I’ll be part of a system, a group of peers in the same industry. How valuable is this? Or, do I go on my own and rely on my state organization, FISCA, CFSA and/or OLA to educate me and help me build my business? Will I have the time and money to be part of these trade organizations?

What do you think? What would you do? For that matter, maybe you already made the decision! What are your thoughts? What would you advise John to do? Put on your consultant hat! It’s time to give back… LEAVE A COMMENT!

Jer@PaydayLoanIndustryBlog.com

Banks Muscling In On Payday Loan Territory

Written on October 26, 2011 by News in Bank loans, Banks, Cambridge Credit Counseling Corp, Center for Responsible Lending, Payday Loans

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Look before leaping into high interest loans says consumer credit counseling agency

According to the St. Louis Post-Dispatch several St. Louis area banks have moved into the payday loan business, including U.S. Bank, Regions Bank and Fifth Third Bank.

Requirement

A requirement of the banks is that the person taking out the loan has a checking account with them and has direct deposit and automatic withdrawal for the loan, said Thomas Fox, community outreach director for Cambridge Credit Counseling Corp., a nonprofit agency. The banks are competing with storefront payday loan and check cashing services, charging somewhat lower rates. They charge an upfront fee for a small loan of $100 to $500, which usually is scheduled to be paid off in one to three months.

Take counseling first

Fox suggests contacting a nonprofit consumer credit counseling agency before taking out a payday loan from a bank or a payday loan establishment. “Our goal is to empower people to take control of their finances and find ways to help themselves,” Fox said. “We do a full financial analysis, help them restructure debt, find alternatives.” To contact Cambridge, call 1-800-235-1407. To contact other nonprofit credit counseling agencies, see the Association of Independent Consumer Credit Counseling Agencies website, or call the AICCCA at 1-866-703-8787.

“Advance” loans

Often the payday loans cycle customers over month after month with loan after loan. The banks, which call them “advance” loans, are a bit better but still charge high rates, Fox said. “The banks will charge about $7.50 for a $100 loan,” he said. “It doesn’t sound like much, but when you annualize it, that’s 261 percent interest. That’s less than the payday loan places, but it’s still extremely high.”

Center for Responsible Lending

According to the Center for Responsible Lending, turnover customers make up 76 percent of a payday loan’s business. The customer often can’t meet payments at the end of the month and is forced to take out another loan. “The banks typically will cut you off from more borrowing after a couple of months, so they are attempting to control that,” Fox said. The banks also limit how much a person can borrow, he said.

“One in four of the borrowers is on Social Security,” he said. “That says something right there.”

Utah Credit Union Drops Payday Loan Business

Written on October 23, 2011 by News in Banks, Interest rates, Payday Loans

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Everyone including the big banks and the Indian tribes are eyeing the market

Mountain America Credit Union, a Utah business, has dealing in payday loans after features in news reports. It had been offering its members a “MyInstaCash” loan that topped out at an 876 percent annual interest rate for a $100, five-day loan. The unsavory practice was revealed in an investigation by the nonprofit online reporting site iWatch News.

Payday Loans

Payday loans are basically short-term, unsecured loans which are usually due when the borrower receives his or her next paycheck. Consumer groups call them predatory and say lenders charge exorbitant interest, often trapping borrowers in a cycle of debt that they can’t escape. Mountain America’s new “Helping Hands” loan complies with rules set by the National Credit Union Administration that permit federal credit unions to lend at a maximum 28 percent annual rate provided they follow certain guidelines, such as giving customers more time.

One of several

Mountain America, a large credit union with $2.8 billion in assets, is one of several that skirted the interest-rate-cap rule by partnering with third-party lenders that financed the loans. Customers were directed to these lenders through a link on the credit unions’ websites. Those lenders would then turn over a finder’s fee, or a cut of the profits, to a separate business, set up by the credit union.

Not just Credit Unions

Credit unions aren’t the only institutions that are finding it hard to resist the allure of the sky-high interest rates payday loans generated. Banks and even Indian tribes are getting into the act. Big banks began muscling their way into the business last year, charging an average 365 percent APR, a study found. The report from the Center for Responsible Lending finds that, on average, a bank payday loan is repaid within 10 days, eats up 44 percent of a borrower’s next deposit, and often creates the need for a subsequent loan. As a result, borrowers stay in debt an average of 175 days, paying over $900 in interest to borrow $500 for less than 6 months.

Indian Tribes

The entry of American Indian tribes into the business is an even bigger frustration to regulators’ efforts to curtail payday lending. Because they are sovereign nations under their treaties with the US, Indian tribes are immune to state interest-rate caps and regulations imposed on the payday loan industry. They can even operate in the 12 states that have banned payday lenders outright.

Not the Indian tribes

It’s not, of course, the Indian tribes themselves who are opening storefront and Internet loan operations. Instead, existing lenders “move” their headquarters to an Indian reservation, usually in name only, and share their revenue with tribal leaders.

Woman Loses $1,200 to Online Payday Loan Scam

Written on October 21, 2011 by News in Online loans, Pay in advance, Payday Loans

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If you are thinking about taking a loan, be careful

Shayvonia Badger was having a hard time making ends meet. In the end she moved back home to stay with her mother. Later, becoming even more desperate, she went online looking for a payday loan. She saw an ad for Casa Loan Services of Miami, Fla.

“You qualify”

Badger talked to a company representative, who told her she qualified for a $7,500 loan and could get it quickly. “I would have the money the next day,” Badger said. The representative told Badger she had to wire $1,200 as collateral to the lender in Canada. After she sent the money, Casa Loan called back saying before it could give her the loan, she would have to send $500 more for Canadian taxes.

It’s a scam

“That’s when I realized it was a scam,” she said. She said the company promised to refund her money but never did. Now, when she calls their number she gets a recording. The Better Business Bureau calls this a classic advance fee loan scam.

The BBB said Casa Loans has an F-rating and uses a Miami address only to make the consumers think it is based in the United States when in fact it is in Canada.

Classic advance fee loan scam

“It’s a scam,” said BBB representative Tom Bartholomy. “There is no legitimate lending company out there that’s going to charge you an advance fee. Sending a money order to Canada to get your loan just doesn’t happen.” Badger now says be careful. “Don’t trust everything that pops up on the Internet.” She now realizes she is not getting her $1,200 back, an expensive lesson learned the hard way.

Texas CSO Credit Services Organization Transition to CAB Credit Access Business, January 1, 2012

Written on October 19, 2011 by Payday Loan Industry in credit access business payday loan business, credit services organization, CSO Credit Svc Organization, texas cab, Texas CSO

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If you have an interest in the Texas payday loan CSO Credit Services Organization transition to the new CAB Credit Access Business Model read on! Delete this now if not!!

Texas (CSO) Credit Service Organizations are facing a new phase of payday loan regulation as they are forced to transition to the Credit Access Business (CAB) model.

Texas has mandated several new requirements to obtain this new CAB license. As a result, many existing CSO’s are scrambling to make the January 1, 2012 deadline for implementation.

A new company called C.A.B Consulting & Brokerage, formed by a group of highly experienced payday loan executives (full disclosure: In addition to Michael Brown, Jer with Trihouse is one of the founding members ), is now available to help you with this transition!

C.A.B Consulting and Brokerage is the most informed consultancy in the payday loan – micro-lending space regarding the new Texas CAB laws. C.A.B.’s strategy is to focus exclusively on assisting existing CSO’s and new CAB’s through this transition.

http://www.CreditAccessBusiness.com offers free information, packets, manuals, consultant arrangements and a Credit Access Business Blog. Contact C.A.B today to discuss options and transition services to move your business into this new era of lending in Texas. Sign up for the Newsletter via Email or an RSS feed for daily posts.

If you’re lending in Texas now, or you plan to enter the Texas micro-lending space, you need this new C.A.B. resource!

Michael Brown
Jer Ayles-Ayler
C.A.B. Consulting and Brokerage
“Compliance, Capital, and Collections”
http://www.CreditAccessBusiness.com

Email Michael: Michael@CreditAccessBusiness.com
Call Michael: 214-293-8676
Fax Michael: 888-561-0986

Pensioner Sues over Payday Loans

Written on October 19, 2011 by News in Interest rates, Payday Loans

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Trapped in a debt nightmare

Disability support pensioner Ronald Hayes who claims he was trapped in a debt nightmare after being recklessly granted dozens of payday loans, has launched a legal challenge against Cash Converters. Hayes claims he was forced to rely on food handouts after he was given at least 64 payday loans in three years.

Court

The Consumer Action Law Centre says Australia’s biggest short-term lender will be put under the microscope in the Magistrates’ Court. Mr. Hayes alleges that two Cash Converters companies breached consumer credit laws.

The lender says

But Cash Converters spokesman Glenn Donaldson said that the company would vigorously defend any allegations that it had engaged in predatory or unfair behavior.

Mr. Hayes says he had to rely on family, friends and charities for food as his pension was eroded by loan repayments. “Sadly, consumer organizations like ours see cases like this on a regular basis,” Consumer Action chief Catriona Lowe said.

A loan to help

“People take out a loan to help pay their bills, but when the repayments are direct-debited out of their account, they find they don’t have enough money left to live off and they go back for another loan.” The payday lending industry is fighting a Federal Government proposal for a cap on fees and interest. Critics say that a typical payday loan has an annualized interest rate of more than 400 per cent.