Jul 16, 2013 Sean Albert
The short term lending industry in Rhode Island remains strong despite an attempt to limit the services provided by the state's alternative loan outlets.
According to the Providence Journal, the Rhode Island General Assembly failed to ratify any legislation that would have reduced the interest rate that short term lenders could lawfully offer. A coalition recommended that interest rates on short term products be limited to 36 percent. However, no change was made to existing legislation, which allows for up to a 260 percent rate on such loans.
Although it may seem like an excessive rate, the figure is a misleading one. Short term loans are designed to be paid off in just a few months, unlike long term loans. Therefore, a higher loan interest rate is to be expected and allows the company to not continue operating and helping clients, but to also then give back to the local economy.
Personal Relief noted that theses loans can be extremely beneficial to consumers. That means that limiting such lending practices could be detrimental to Americans.
The source indicated that short term loans can be approved in minutes, unlike loan applications to major banks. Consumers or business leaders looking for immediate capital can turn to these services for financial assistance that would otherwise be unobtainable.