Payday loans in Houston get a little stricter which may be a prediction for some uproar in the industry. This new rule may not be good news for a lot of business but may throw some light on the way borrowers can handle their debt and show them a comprehensible path.
A spokesperson from Consumer Service Alliance of Texas shared his forecast of several companies going out of business due to loss in revenues and he also mentioned that a lot of other companies may still continue business but at lower financial levels. Quite a few companies have already closed shop in the metropolitan areas of the city. Predictions also point to the probability of borrowers looking towards unregulated lenders if their loan requirements exceed the limitations of the city’s payday loans.
The Payday Loan Ordinance limit in Houston restricts borrowers to borrow 20 percent of their gross income per month. In addition to this the single-payment credit may be refinanced only thrice compared to installment loans that can be refinanced four times. In the case of installment loans the principle sum owed must lower down to a minimum of 25 percent after each payment or refinancing.
Borrowers have confessed to using Payday Loan Ordinance to buy gifts during Christmas but have also confessed that the interest that they have to pay on the loan is a significant amount but that these loans are a great help when in times of need. They have confessed that these payday loans are a relief when there is an emergency and they need that extra cash immediately. This is the only place they can turn to for some quick cash.
The new payday loan rules passed in December of 2013 by the City Council have made borrowers happy, by providing them a clearer path out of debt. These regulations have been modeled on complaint based systems and claim to move on to other models too soon. Already cities nearby like Austin and Dallas have started to conduct code inspections as well as audits to make the process smoother.