A sign of modern times and modern economic circumstances is the growth of what were once considered “fringe” financial services – services that the establishment frowned down upon as being less than reliable are now part of the mainstream. One such financial service id the cash advance or payday loan enterprise. Cash advance services are growing and expanding like wildfire for very good reason; they provide a much needed service for consumers who occasionally experience shortfalls in their personal finances. Cash advance services make short-term loans to consumers, basically drawn against future income; with a cash advance loan, a person is able to borrow money that will be repaid out of their next paycheck. For many across the nation, this has become a common way of bridging the gap financially between paychecks – when money becomes tight or unexpected surprises pop up – as they so often do. Once considered a small insignificant and industry segment, cash advances (or deferred presentments, as they are also called) have quickly become a common weapon in the average person’s financial arsenal.
One state that has seen the benefits that cash advances bring to its citizens is Alaska; like most US states, Alaska has adopted special regulations and laws for the purpose of governing the issuance of cash advances within the state so that the burgeoning industry could begin to grow within their borders. With Alaska statute 06.5 0.100 being enacted, the state became one of many to support the efforts of legitimate cash advance services who are trying to provide a valuable service to the community.
The state law provides regulation for Alaska payday loans services, and sets strict parameters within which the companies must operate. The statute sets maximum loan amounts that may be granted to any one individual in a cash advance situation to a $500 maximum at any given time. If any lender should go beyond that limit, the legislation also sets fourth strict penalties and provisions – that can even include a company being barred from operating within the state of Alaska. The reason for the stringent regulations is so that companies operating in Alaska will keep their operations aboveboard, thus protecting the consumer, and creating a win-win situation for all concerned. Although the state has enacted the ease strict guidelines for Alaska payday loans services, it should not be misconstrued as an attempt to limit the operations of these companies, as the state has made it clear that legitimate operators are very welcome – the guidelines were in acted to separate some of the less desirable cash advance services from those that are doing a legitimate and helpful business.
Another restriction set in place by the law is that Alaska payday loans are to carry a term of no less than 14 days. With a 14 day minimum term firmly in place, any company offering cash advances in the state of Alaska, has to allow the consumer at least two weeks to repay their loan. This means that a consumer has more than enough time to reach their next pay date – from which they should be able to repay the loan. The 14 day minimum amount to a very effective method of protecting the consumer against unscrupulous lenders that would attempt to provide funding for a shorter amount of time, but at very high rates of interest and fees. When a consumer takes out Alaska payday loans, they are likely to be able to actually see two paydays before their loan is actually due; if one borrows on a cash advance on the first of the month ( with that day being a payday), then they will actually have two paydays occur leading up to their loan being due – and this does not taken into consideration the possibility that the loan may actually be for even a longer-term – like in many states that allow up to 31 days for repayment of a cash advance.
The final, and considerably important, point that we will cover here is the government restrictions set on the finance rates and fees that a company can charge consumers for Alaska payday loans; this very important limitation is set in place to protect the consumer from escalating and recurring fees that could dramatically increase the actual amount owed by a consumer over a very short period of time. There have been many horror stories of consumers who have taken out cash advances in unregulated states, and have been subject to unannounced reoccurring fees and ever accumulating interest charges. Now that Alaska payday loans are governed by state laws, this is a fear that does not have to be shared amongst the state’s citizens. The maximum amount of interest that can be charged on Alaska payday loans is 15% (or $15 per $100 borrowed) + a five dollar finance charge. Having set the interest rates that can be charged on cash advances in the state, Alaska has made proactive moves to keep the industry thriving and keep its citizenry safe and protected. It should also be mentioned, though, that the citizen does indeed have certain requirements and responsibilities to follow for their part in the borrowing process as well; consumers have to keep in mind that although Alaska payday loans are easy to come by, and may be considered quick and easy money, these are legal and binding loan agreements. When anyone enters into a formal contract, there are responsibilities on both sides, and the consumer’s chief responsibility is to repay the cash advance on or before the date stated on their contract. Doing so will you alleviate and eliminate extraordinary fees and charges that come with any business agreement that is defaulted upon. As long as the consumer is working with a reputable Alaska payday loans service, and lives up to their end of the bargain, then there will be a transaction that works out well for all concerned; the consumer will have gotten their emergency funds in a timely fashion, the company making the loan will have made a few dollars on the loan (no doubt satisfying their shareholders) and the state will be right in the middle – monitoring lending operations and collecting corporate taxes along the way.