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New Mexico has new interest rate cap on payday loans effective 1/1/2018
#1
I found this article in the Santa Fe New Mexican that says interest rates will be capped at 175% for payday loans starting January 1, 2018. That’s good news for New Mexicans!
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#2
Although this may have been good news to many in the area, the interest rate is still staggering and a far cry from what consumer advocates are seeking (36%). I just can't imagine how the government allowed lenders a free hand in imposing interest rates that preyed on cash-strapped people and sent them deeper into debt. It looks as if the government is incapable of helping its constituents and has thus allowed small loans company to take over. While the cap is an improvement, they can do better by actively introducing more alternative lending sources to ensure that low interest rate capital is made available to more people.
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#3
In general, this may have a good effect especially in the future economy of New Americans. This rules and policy wanted to aim a long term growth for the economy. But there are some people (opportunist) who would take advantage to offer loan sharks with the poor. The poor doesn't have any choices but to take hold of the loans for them to survive that soon buried them into debt. Or government might have take a look to what could be the implications in the lower level society. Maybe they should find an alternate programs not to sacrifice the small ones.
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#4
The bad part of taking such loans with interest rate as high as 175% is the issue with repaying such loans. I mean how can someone who is borrowing to start up a business be able to cover both the loan amount and the interest added and still be able to make profits. This is not just right for me, and I hope the government will provide alternative sources of taking loans that have got the interest of the people at heart.

(01-02-2018, 02:37 AM)kwaikin25 Wrote: In general, this may have a good effect especially in the future economy of New Americans. This rules and policy wanted to aim a long term growth for the economy. But there are some people (opportunist) who would take advantage to offer loan sharks with the poor. The poor doesn't have any choices but to take hold of the loans for them to survive that soon buried them into debt. Or government might have take a look to what could be the implications in the lower level society. Maybe they should find an alternate programs not to sacrifice the small ones.

I think you have a point by saying that this is meant for the rich for only them could be able to afford the huge interest rate. I'm addition, those that have big companies can afford these loans while they pay back from the profits they make from the business. The new policy is not for the poor and that's not a good way to start off the year. 
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#5
I think 175% is not a good Idea and at the same time is not fair. Even though it can reallt affect to their economy in a positive way but remember that loan is to help those who are in need so I think the interest percentage should decrease a little more.
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#6
I think its better that their Government will put up an Government Organization where their people can avail a loan on much lower interest. I am sure that their Government can do something about that, it will be more beneficial to their people that their Government is the one who is truly in control so their people does have a say on it as well unlike if its private where business is business.
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#7
They are implementing this law because New Mexico is one of the states with the lowest income and highest poverty rate. People are simply struggling there. Does this mean all states have to be poor in order for the state governments to introduce this new rule?

New Mexico will also change how frequently loans gets payed off. The article says borrowers will be able to settle up their loan in at east four installments instead of just one. That's another advantage of this new state law.
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#8
It makes no sense to impose such high interest rates on people who are already struggling financially. This is disgusting behaviour and affects mostly the poor. I absolutely agree with mexico in this regard.All lending should be regulated by the government, in the interest of the common man. Payday loans are repaid very fast and the maximum interest they should be allowed to charge is 15%. These are loans guaranteed on salary so there is very little risk.
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#9
Only 175 percent?? That is astoundingly high. I mean if they were going to but a cap on it..why not something reasonable like 35 percent or something? That is why I hate Payday loans so much. I mean if you could actually afford something different, you wouldn't be doing it!
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#10
I don't find this worth celebrating. The 175% interest rate is still high, and most Mexicans will accumulate debt that they won't be able to pay. The people who are in dire conditions will seek to have payday loans as they have no alternatives, so the government must make it easier for them to acquire a loan with very low interest, typically at 20%.
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