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Lending on the rise in Mississippi

Sep 03, 2012 Sean Albert

Many individuals are forced to seek out alternative financing options when faced with an emergency expense that they haven't saved up enough money to cover. This could be in the form of medical bills, car repair fees or the need to finance new purchases. A number of people decide to seek out short term lenders when they would not otherwise qualify for traditional loans. These companies include pawn shops, short term loans companies and title loan financiers. Usually, consumers are able to pay off their debts in a relatively short amount of time, including fees and interest that are levied to account for the added danger of lending to risky individuals. As such, the popularity of the offerings is soaring in many regions, including Mississippi. Hattiesburg seen increase in lenders According to a column in the Hattiesburg American, residents of the Mississippi urban area are seeing more and more options to obtain fast cash. The source said the most popular types of programs for residents are often car title and short term lending companies, which are viable because, despite lowered interest rates, traditional lenders are becoming more picky about borrowing standards. The Hattiesburg American suggested calling for an increase in legal coverage for borrowers, as the loan companies are becoming extremely popular in the area. The newspaper explained many of the consumers are low-income, already indebted or young, without a credit history. These populations often need fast cash options but have very little available to them, which lenders can help with. Lending sought out all over Mississippi The Hattiesburg area is not the only location Mississippi residents are traveling to for their short term lending needs. According to a recent Pew Safe Small-Dollar Loans Research Project released in July, while there are a number of local laws governing borrowing, the state is thought of as generally permissive in letting lenders decide on their preferred interest rates, helping consumers gain access to money. However, Pew found people can only take out $500 at a time, including fees and interest, no matter which short term company they are are dealing with. Usage rates throughout the nation tend to be around 5.5 percent of the population, though Pew found that number jumps to 6.6 in permissive states. Also, according to the most recent data published by the Mississippi Economic Policy Center, in 2007, the state was home to nearly 1,100 licensed check cashers, or short term lenders. That number is most likely to have soared after the financial troubles of 2008 prompted many lenders to open storefront locations nationwide to help struggling citizens.