The average payday loans in Utah are now at an average of 466% annual interest—down from 2013’s annual average of 474%, this according to a report.
According to the annual report of the Utah Commissioner of Financial Institution for the fiscal year 2014, the average payday loan in Utah costs $17.93 in interest every two weeks per $100 borrowed. This new rate shows a decrease of 29 cents from the last fiscal year.
In a report by the Salt Lake Tribune, a spokesperson for the Utah Consumer Lending Association said that although many are complaining that the numbers are too high, “talk of annualized interest rates is highly misleading given the interest on payday loans is limited to 10 weeks.” David Parkinson said the payday loans, also called deferred deposit loans, are usually the more economical choice when compared to the fees for bounced checks or utility reconnection.
Critics of this payday lending program say the poor are often at the losing end, because they’ll likely take out another loan to avoid lawsuits over the default of their original loan.
Following the release of the report, a state representative revived his plan to pass a bill that protects consumers from payday lenders, particularly the high rates that came from the report.
“Instead of going for the all-out ban, or the interest rate cap which a lot of people want, I’m saying OK, let’s try to find a way that you guys can conduct business, but let’s also find a way that strips out the abuse,” Republican member-elect of the Utah House of Representatives Brad Daw was quoted as saying in a report on kuer.org.
“So that’s why we have this, what I call a compromise piece of legislation.”
Although the numbers are high, it doesn’t tell the whole story. The rates soared because some lenders charge a flat fee no matter what the loan duration is. This results in a higher annual percentage rate, is the loan is settled before it’s actually due.
It is for this reason that Utah Money Center always encourages consumers to shop around for the best possible rates.
Our suite of signature loans always include the principal and interest so you know exactly how much it will cost, and that it’ll suit your lifestyle and budget. We also let you pay off your payday loans early without incurring penalties.
If you’re shopping around for the best rates, call us now. Our loans come with the lowest rates, guaranteed! Apply now and get your money as fast as today!