Archive for the ‘Payday Loan Press Releases’ Category


** Payday Loan Industry Collection Warning **

Posted by Al

Consumer Alert regarding fraudulent collection activity involving payday loan customers!!

Earlier this month we released an important notice on unlawful payday loan collection agents  calling our customers in an attempt to solicit payment. There demeanor is very threatening and highly aggressive and unprofessional. In some cases, this group of individuals are threatening consumers with incarceration.

Cash USA just released a similar notice via press release and mass emailing to their customers to apprise them of this unfortunate matter.

As a reminder, Pay1Day is a direct lender that not only utilizes diplomacy during the course of communication with there customers, we continue to enhance the awareness of such matters to our complete customer base. Our In-House Legal Division has been trained to provided information to victims to ensure that there identity is safeguarded.

If you suspect you may be the target of this disturbing activity, please report this to our legal department @ 888-729-1329, option #2.

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Payday Lending’s Final Days? Not by a Long Shot

Posted by Al – Many payday lenders are concerned over the forthcoming consequences brought upon by the financial bill that was passed by the Senate and signed by the President yesterday. Their concerns regard new regulations on the payday loan industry by the federal government. Many payday loan lenders, such as Payday Loan Trust, believe these regulations are too restrictive and hand too much power to the respective payday loan State. These new regulations will be counterproductive to payday loan business operations, as it will hurt their business and may result in downsizing. In the long run, a new wave of layoffs and shutdown businesses from the payday loan sector will go on to hurt the struggling economy even more.

A recent payday loan article from The Huffington Post claims that the new financial bill will put an end to payday lending because it enables banks to compete against payday lenders for short term high interest loans. According to the article, “If banks want to grow in the future, they will have to adapt their business models to serve the credit-challenged population.” In the same article they go onto say that 1/3 of the US population is at high credit risks, lending out money to high risk borrowers will only put banks at more risk.

The fact of the matter is, big banks will never be able to compete with short term lenders so long as they are attached to Wall Street. A payday loan of $100 could cost banks a lot more than a payday lender simply because of banks operating costs. Take into consideration bank business costs and overhead, their employees, and their executives salaries and bonuses, a banks will not be able to be profitable on short term loans.

The new financial overhaul is here to put caps and limits on all types of short term loans, including payday and title loans, and to curb predatory lending. It is simply wrong and naive analysis to think that this bill was going to shift the short term lending industry from payday loan lenders to bigger lending institutions like banks.

In addition, studies show that many Americans have lost faith in our banking system because they see it as a direct correlation to the downfall of the US economy. They will continue to fear hidden fees tacked on by banks even if the new bill forces them to “advertise their fee structures as clearly as a McDonald’s menu.” Americans are smart people and they know it was big banks and Wall Street that failed America back in 2008, not payday lenders.

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Many Parents Paying for Children School Bills With Payday Loans reports

Posted by Al

A recent study conducted by a payday loan resource website shows that many parents are now using payday advance loans to pay for their children school expenses. That is mainly because school expenses of their children is becoming more expensive. Lunch money, activity fees, clothes, and supplies all add up throughout the year. As the cost rises and economy is not recovering fast enough, more people turn to payday advance lenders such as or

Average Cost of School Supplies

On the low end, parents end up spending over $600 a year per child for school. This figure included school clothing, shoes, supplies, and electronics. For children who are enrolled in specialized classes such as advanced math, art, or photography classes another $250 can be added to that figure.
Most students are expected to have all of the necessary school supplies on the first day of class. This means you can expect to need to pay a large chunk of the overall money needed for the year during a single month.

Extracurricular Activities

While schools struggle to find the necessary funding to keep the required programs open, they look to parents to supply the money for extracurricular activities. Most experts will agree that students need to participate in activities outside of the standard curriculum to develop social skills. Many schools have charged students to participate in sports, and more are going that direction.
On top of equipment, insurance, uniforms, and transportation, many parents are now faced with needing to come up with $100 or more just for their child to enroll in an activity. This is another expense that is usually not spaced out over time, rather it’s all due at once.

Additional Expenses

Throughout the year many other expenses will arise. Tickets to school performances, money for field trips and other activities, and even yearbooks and high school class rings can be thrown in the mix. A yearbook can be as high as $75, and class rings can run up to several hundred dollars.

Finding the Money

While most experts will tell you to start saving money for school expenses early on, very few people are able to actually do this to the extent which they need. Between standard living expenses, and the unexpected things that pop up, putting more than $1000 a year aside can be a struggle. Many Americans turn to payday advance loans to help with the necessary school expenses.

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The Truth Behind The Numbers: What APRs REALLY Mean

Posted by raul

One of the most frequent objections to the payday lending industry from opponents is that the APR’s (Annual Percentage Rate) are “too-high“.  Those who stand so strongly against the payday loan industry have usually never taken out a payday advance, and do not understand how to calculate an APR.  Some will claim that they do not need to know how to calculate an APR, and that “everyone knows” APR’s of 400% and up are just “wrong” or “evil”.

Let’s take a look for ourselves!

APR stands for “Annual Percentage Rate”.  It helps to understand a bit about how these numbers can fluctuate greatly depending on how long the loan is given; especially when these “Annual” ratings are applies to short-term loans. You can use an online payday loan calculator or you can calculate it yourself.

The basic formula to calculate an APR on a Payday Loan is:

APR = ((Interest Rate/Amount Borrowed) * (Days in a Year/Days in term of contract)) * 100

For example, if you borrowed $100 with $15 charged, for two weeks the calculation would look like…

First, we have to calculate $15/$100, which is .15

Then, we calculate 365/14, which is 26.071 (cutting out several digits to simplify)

Now, multiply .15 * 26.071, which comes to 3.91065 and rounds up to 3.9107

Multiply that by 100 to get the actual percentage of 391.07%, or as the formula would look….

(($15/$100) * (365 days/14 days))*100 = APR of 391.07%

On this next example below I’m using an online long term APR calculator

Below, I’m calculating what 3.6% APR would be for 30 years on a $100,000 loan. It ends up adding roughly 63% of the original amount borrowed.

WOW!!  Only 3.6% APR ends up being 63% of the original amount financed, on this standard 30 year loan (mortgage) scenario!

Which means you’re probably asking yourself, “If only that situation is only 3.6% APR, why does over 391% APR only end up being $15 for $100 borrowed?

The answer lies within the time-frame, or the amount of time the money is borrowed.  Due to the “truth-in-lending” act, nearly all lenders MUST disclose the APR in writing to the borrower.  Unfortunately, when used on a short-term loan, APR’s can increase greatly when the term is decreased.

Hopefully this will help you to form your own opinion next time you read about Payday Loan APR’s being “too-high”.

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College Students Adapting To Tough Economy

Posted by Al

Due to our current economic crisis, college students all over the country are making several changes in order to stay afloat financially and continue their education according to loan blog of direct payday lender Pay1Day. Whether just beginning their post-high school educational journey or chasing down a graduates degree, students everywhere find themselves making adjustments and changing existing trends in order to stay afloat amidst these tight economic times.

Some of these changing trends are reflected in a recent annual survey by the Princeton Review entitled “College Hopes & Worries Survey” which surveys both college-bound high school grads and their parents. The study shows that 68% of students reporting high stress levels, and that the largest concern (37%) among parents and students alike is that they (the student) will be accepted to their first choice school but be unable to afford it especially when loans are difficult to obtain.

And for those already enrolled, the student housing situation at many colleges seems to be a changing concern as well. In the past many juniors and seniors move to off-campus housing, whereas this year many are staying on-campus to save money or taking out personal payday loans to make ends meet. This leaves many students scrambling with only weeks to find scarce and more expensive off-campus housing at a time when they need to save money on living expenses to make ends meet.

Understandably, the percentage of students employed while attending school has also increased recently as well. Although this seems like a viable and ultimately “honorable” option during an economic crunch, this may eventually become an issue for students from smaller community colleges. With more and more students entering the workplace while still in school, this could drastically affect the job market especially in these smaller colleges and communities.

Not only students are feeling the crunch. Faculty, administrators and many more are making the necessary changes to stay on top of these changing trends. Many schools are actually starting to get away from offering loans which would start most student careers off in a state of debt. Grants and work-study programs are some of the options replacing loans in financial aid packages.

Although the economy is certainly making it tougher for some students to pursue their higher education, it is comforting to see that most students aren’t giving up on their dreams. We can only hope that these struggles will only help to make our future workforce more resourceful and independent in the future.

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Payday Lenders Unfairly Targeted by New Reform Bill

Posted by Al

Proposed financial reform bills currently in congress may result in creation of a new agency called CFPA intended to regulate the financial industry to prevent a similar financial meltdown that had resulted in the economic crisis of 2008. However, these bills may be unfairly targeting businesses and hampering their contribution to the economy.

payday loan industry and direct payday lenders. Some argue that payday advance lenders were one of the few financial institutions that contributed positively to the economy by allowing cash flow to the average working family.

“Payday advance loans are the easiest and fastest loans to obtain especially during these hard times, but of course they come with a price.” said Richard Hwang director of finance at a “Our short term loans helped many borrowers get money on demand and avoiding unnecessary overdraft fees and other type of late fees.”

It is true that a payday advance loans can be expensive in terms of fees and interest rates but that is because they are considered high risk loans with higher default rates. Many payday advance lenders are reporting millions of dollars will be lost this year because 20 – 40% of borrowers will default on their payments.

Responsible Payday Lenders
Many direct payday lenders have been adopting responsible lending practices while informing and educating their customers about payday loan risks. For example, advises customers that payday loans are to be taken for emergencies only and customers with more than two open loans should not and would not be able to qualify for any future loans until the number of loans drop. Many other direct payday lenders have also similar rules and policies in place to both protect both the customer’s and lenders best interests. Yet despite all these self regulations, payday lenders could be over-regulated by a new financial reform bill governed by the CFPA. This could result negatively; stifling payday lending puts a roadblock on consumer financing as well as the economy.

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Small Businesses Fearing Proposed Financial Regulation

Posted by Al

In the wake of the subprime mortgage collapse, and amidst the proposed consumer financial protection bill, it seems that small businesses are finding it tougher and tougher to get access to small business credit. This seems to be one of many unfortunate “side-effects” of both our current economic crisis, and the proposed regulations that small businesses and others may soon be facing. And many smaller lenders and including payday lender, are already planning and preparing for these possible changes in federal regulation that may soon cast new restrictions on how they currently do business.

Many small businesses will not be able to cope with changes to their financing options or afford the legal council to draft changes to their contracts, leading many to simply abandon their current financing options. Unfortunately, these financing options many times are a driving force in their business providing simple finance options for working-class Americans who otherwise would not be able afford the purchase, and without the ability to provide financing options to their customers many businesses may not be able to survive losing sales due to lack of financing.

For example, dentists often offer “in-house” financing options, meaning that you could get braces for your children and apply for finance options right in the dentist’s waiting room. This new legislation stands to oversee this type of finance, in which case many dentists will simply abandon offering any finance options leaving no options for their patience but to take online payday loans for their dentist and other doctors bills. In spite of the fact that finance options help drive their business by offering credit options to those who cannot simply pay their total balance “up-front”, they simply are not in the business of finance therefore are not prepared to cope with new financial regulations.

While one could argue that payday and short term cash lenders could benefit from this arrangement, but the at their payday loan blog, folks at argue that they are also falling within the small business category and the financial regulation is making it more costly for them to lend short term cash hence the cost of payday advance loans are also increasing.

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Mother’s Day Arrival Expected to Increase Payday Loan Lending at

Posted by Al

Mother’s Day is coming up which historically gives businesses a chance to boost sales in these hard economic times. Generally mother’s day has been great to many retail businesses as visible by promotions in the windows of flower shops, gift stores, and even spas.
In addition, the recent economic recession and downturns has also enabled payday loan lenders and short term cash lenders to have promotions for Mother’s Day.

Direct payday lenders are in a better position as they are the ones lending funds directly to customers and can offer better promotions.
“We are expecting a 20% increase of applications this week mainly because of Mother’s Day” said Richard Hwang, director of Finance at, a direct payday lender online.

“Payday loans were once meant to be for emergencies, however, because traditional loans are getting more difficult to qualify for and obtain, this has created more demand for such loans,” says Sara M. Varese who writes for their payday loan blog and, which features a recent article titled, “Mother’s Day Second Sunday of May, Traditions, and the Gift of Time” demonstrating the importance of Mother’s Day all around the world.

The reasons for increase of such demands are very obvious and simple – Cash flow is still a major problem with the average Americans. And furthermore, traditional banks and financial institutions are not providing enough credit for their consumers, therefore, many Americans are turning to short term cash lenders for their fast cash needs.

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Subprime Mortgage Collapse Leads To Tightened Financial Regulations For All

Posted by Al

Currently our Senators are debating the creation of a stand-alone government agency to protect American consumers from the aftermath of another subprime mortgage collapse.  This proposed agency (CFPA) would be regulating and overseeing a vast breadth of financial agencies, most of which have no ties to our economic crisis.  Because of this it seems that companies that had absolutely nothing to do with the subprime mortgage collapse would be “penalized” for the alleged actions of Goldman Sachs by facing new regulations which many fear would lead to new business and legal costs forcing some businesses to close their doors.

Opponents of the CFPA claim that not only are they being punished and regulated for a situation that they did not help create, but that the new regulations will actually worsen our economic situation in many ways.  A recent study by Joshua Wright (George Mason University Professor) estimates that the creation of the CFPA will reduce job creation by 4.3 percent or approximately 60,000 fewer jobs every year.   Because the CFPA would oversee car dealers that offer loans, payday advance lenders and payday stores, many existing industries are lobbying against the implementation of new regulations.   Also, entities such as Payday Lenders are already regulated by strict State laws, sometimes limiting APR’s to as low as 36% (or a mere $1.38 charge per $100 borrowed) which arguably puts them out of business.

There are also some recent news reports which claim that our senators need to dig a little deeper to find the true culprits behind the subprime mortgage collapse, alleging that those responsible may not be the ones currently under scrutiny.
A recent report from states:
“But if Senators were really interested in finding out the cause of the housing bubble, they would call one Eric Stein to the dais.
Mr. Stein is currently that Deputy Secretary of Treasury for consumer protection and is likely to head the vastly powerful Consumer Bureaucracy currently being pushed by big banks and Wall Street. But prior to his appointment to Treasury, Mr. Stein the bag man for the Center for Responsible Lending and its many Self Help subsidiaries, was singly responsible for more bad loans than all Goldman employees together.”
I hope that a proposed “protection” bill will actually provide consumers with some form of protection, and not simply eliminate more jobs.

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Goldman Sachs Now Faces Criminal Charges

Posted by Al

By Contributing Author Gabe Rodriguez

Charges seem to be mounting against Goldman Sachs reports one of the payday advance lenders Goldman Sachs accused of defrauding investors with selling securities tied to subprime mortgages. Recently the Securities and Exchange Commission (SEC) charged Goldman Sachs with civil fraud regarding the alleged ties to the subprime mortgage collapse. The civil charge alleges that John Paulson (Paulson & Co.) worked with Goldman Sachs to hedge funds in order to “bet” on the subprime mortgage collapse, with the 2007 sale of “collateralized debt obligation” (CDO). Goldman Sachs allegedly did not disclose conflicts in the CDO’s, and were betting on the fact that their value would plummet. When the CDO’s value finally crashed John Paulson stood to make approximately $1 billion off of the crash.

Currently the SEC’s charges are only one part of Goldman Sachs mounting legal woes. Last week Federal Prosecutors began a criminal investigation into Goldman Sachs and its employees regarding their alleged securities fraud. Other legal actions against Goldman Sachs and its employees seem to be mounting as well, including the demand of an investigation from UK Prime Minister Gordon Brown. On a State level, Richard Blumenthal (Attorney General, Connecticut) stated that he will be looking into the SEC’s charges, which may lead to a formal state investigation. There are also mounting cases from individual investors who claim that Goldman was not transparent with information about “Abacus”, the mortgage security which is currently under investigation by the SEC.
There are some recent news reports which claim that our senators need to dig a little deeper to find the true culprits behind the subprime mortgage collapse, alleging that those responsible may not be (only) Goldman Sachs.

A recent report from states:
“But if Senators were really interested in finding out the cause of the housing bubble, they would call one Eric Stein to the dais.
Mr. Stein is currently that Deputy Secretary of Treasury for consumer protection and is likely to head the vastly powerful Consumer Bureaucracy currently being pushed by big banks and Wall Street. But prior to his appointment to Treasury, Mr. Stein the bag man for the Center for Responsible Lending and its many Self Help subsidiaries, was singly responsible for more bad loans than all Goldman employees together.”
Regardless of opinion, this will be a legal case to keep a close watch on.

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