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Many people wonder how much it costs to start your own loan business, and end up very quickly moving toward one of the shadier sides of the lending industry; Payday loans. Payday loans are a quick and easy way to get involved with money lending, but their days, for better or worse, are becoming numbered as many state governments are imposing tough regulations on them, and some countries are beginning to crack down on them entirely.
First, what is a Payday loan? Payday loans are small loans that one can apply for to get them through a tough time during their business cycle. The borrower visits a Payday lending store, which are numerous as there are many different franchises. The loans cover an amount necessary to get one through an ugly two week period, and are issued accordingly, similar to an employee pay cycle. The loans often come at a very high interest rate, somewhere between 15% and 30%. While this may seem merely on the high end of reasonable, keep in mind that each one of the Payday loans is a separate loan; this causes the numbers to ad up very quickly.
Most people are attracted to this system because of how much it costs to start your own loan business; the Payday franchises are very open, as there is no established main franchise for this industry. But it should also be noted that Payday loans are rapidly becoming extinct. Several states have, in fact, banned them outright while others have imposed very, very strict regulations on them as being usurious practices. It is reasonable to believe that the practice may soon be illegal altogether.
So when trying to factor out how much it costs to start your own loan business, be aware that the Payday loan scheme will, most likely, go out very soon. The cost will most likely be wasted time.
