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www.rivervalleyloans247.com/Cash advance apps are similar to payday loans, but they’re not exactly the same. Their fees are often lower and mostly optional, and advance amounts are usually smaller than payday loans.
Regulatory agencies don’t currently categorize these apps as lenders, meaning they don’t have to follow common lending laws like the Truth in Lending Act, which guarantees certain consumer protections.
But Kushner says the apps function as smaller payday loans that borrowers can get more frequently.
On average, cash advance app users borrowed 26 to 33 times per year between 2019 and 2021, according to a March report from the U.S. Government Accountability Office. The average payday loan borrower takes out about eight loans per year, a 2012 study from The Pew Charitable Trusts found.
“If you take more of them, what you’ve really done is just broken up a payday loan cycle into much smaller, more frequent direct-to-consumer advances,” Kushner says.
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