Checkbook loans were created to disguise payday loans after tighter restrictions were put on payday loans. Everyday people get into situations where they need money now, but they don’t have it. Cars break down, heaters quit working, bills have to be paid, and sometimes the money just isn’t there. When this happens, one source people turn to for money is payday loans. Payday loans offer people the chance to loan money if they have a verifiable source of income. Sources of income can include paychecks, child support payments, regularly scheduled settlement payments, and etc. The problem for consumers is that payday loans come with ridiculously priced loan terms and shady features. A few years back, Illinois noticed a problem with payday loans, so they put in restrictions on the lending companies under the Payday Loan Reform Act. To get around the new restrictions, the companies ended up making new names and terms for the loans in order to bend the rules. The lesson here is, if you see a place offering “checkbook” or “installment” loans you better be very careful. For instance, the Act was put into place for loans that lasted under 120 days. As a result, the companies just extended the loans out past 120 days, but raised the fees. Fees on these types of loans are said to range anywhere from $10 to $30 for every $100 borrowed. That is an insane amount of money to be paying in fees. If you are interested, the name “checkbook” loan comes from the fact that you will need to fill out a post-dated check in order to get a loan. Of course that doesn’t change the fact that you will be paying dearly to take out any type of payday loan. Anyway, if you find yourself in a position where you are considering a payday loan, you may want to consider other options. If you are struggling to get by from month to month, it may be the result of an unmanageable amount of debt. If you have debt payments that take up a large portion of your income every month, and you can’t afford to live your life with the rest of your money, you may be a good candidate for bankruptcy. Bankruptcy will give you the chance to wipe out and restructure debts, so that you won’t have to struggle from paycheck to paycheck. Payday loans will no longer be a part of your life, and you’ll be much better off. You’ll get to keep your house and vehicle, and you’ll be able to move on with your life in almost no time. If you would like to find out more, don’t hesitate to contact a good bankruptcy attorney.
