| A growing number of consumers are struggling to | | | | Studies also report that it is the rare payday-loan |
| pay their basic bills these days. This is no surprise; | | | | borrower who only takes out payday loans for |
| the nation's unemployment rate is still hovering | | | | emergencies. Most borrowers take out a loan, find |
| near 10 percent. Businesses are laying off even | | | | that they can't pay back the loan by its deadline |
| their top employees. Finding a new job sometimes | | | | and take out an extension, borrowing even more |
| seems impossible. Consumers are desperate for | | | | money. While doing this, they rack up more |
| quick cash. But these consumers should be | | | | interest rates and origination fees. It is a great |
| cautious of any cash now loan offers. These | | | | system for payday lenders, but a lousy one for |
| almost always bring future financial trouble. | | | | consumers. |
| The most common type of cash now loan is the | | | | That is why so many states have either passed |
| payday loan. Payday loans provide customers with | | | | or are considering legislation to regulate the way |
| quick infusions of a small amount of cash. They | | | | payday lenders operate. For instance, some |
| are supposed to tide people over until their next | | | | states have passed laws that forbid these lenders |
| paycheck, when consumers will pay them back. | | | | from passing out more than $500 at a time. |
| Unfortunately, these payday loans are set up to | | | | Others have enacted laws that limit how many |
| ensnare borrowers in a never-ending cycle of | | | | payday loans consumers can take out. |
| debt. For one thing, these loans come with | | | | The lure of receiving quick cash now, though, is a |
| sky-high interest rates, with some research | | | | tempting one to many consumers. It's hard to |
| saying they come with annualized interest rates in | | | | blame them for falling for the payday loan trap; |
| the 390-percent range. Secondly, these loans also | | | | after all, they need quick money to fill their cars' |
| often feature high origination fees, making them | | | | gas tanks, pay the rent and keep the lights on. |
| an even more expensive way to borrow money. | | | | |