The Economic Downturn Heats Up the Instant Cash Advance Loan Industry

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While more people are turning to instant cash advance loans, the legislators in some states are turning up the heat on lenders. points out some concerns and recommends tips for borrowers so they do not fall into a more difficult financial situation.

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As the economy continues struggle, the instant cash advance loan industry is assisting more people with their quick cash loan needs. points out concerns that legislators have surrounding the quick cash loan industry and gives recommendations to borrowers to help them from falling into a more difficult situation.

When people are in need of a small, short-term loan for immediate personal needs, such as car repairs or emergency room visits, they can turn to a quick cash loan lender. They provide loans with no credit check and no collateral. However, these minimal requirements mean the lender is taking on a high risk loan and therefore charges high interest rates. When people turn to fast payday cash loans, it is usually because they do not qualify for traditional lines of credit through a bank or credit card.

With the economy continuing to decline, people with higher median household incomes are becoming customers of fast payday cash loan lenders. One of the nation's largest operators of fast payday cash loans recently reported that their median household income of customers has been slowly increasing. From last year, it is up about $1,500 to $42,629.

Additional laws have been put in place in several states to protect borrowers from high interest rates and difficult loan terms. In 2005, the Illinois legislature passed a law that capped interest rates on short-term payday loans. This law states that interest rates are to be capped at 403 percent annual interest rate for loans that are taken out for up to 120 days.

The law passed by the Illinois legislation also limited the amount of loans one borrower could hold at any given time, placing this limit at two loans. In addition, payday loan lenders must work out payment plans with borrowers who are unable to pay rather than taking them to court for legal action. Illinois is the only state with an interest rate cap on short term payday loans; however, there is no cap on longer-term loans. As such, some lenders have changed their loan terms so they exceed the 120 day mark. There is legislation currently being discussed to close this loophole for the state. recommends that borrowers shop around for payday lenders when they are in need of instant cash. After finding a reputable store with reasonable rates, thoroughly read and fully understand the terms and conditions. If the interest rates or term of the loan seem unreasonable, look for other means to obtain a fast cash loan.

Fast cash loans are intended for occasional and emergency use only. If a borrower finds themselves in a difficult reoccurring financial situation, payday loans are not the answer. Borrower should possibly seek professional help from a reputable credit, budgeting or debt management program such as the National Foundation for Credit Counseling at 1-800-388-2227.

About provides people in need of emergency funds a resource to find instant cash loan and payday loan lenders.

Contact: Marlene Brown
Public Relations Specialist


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