Paying in cash is any day better than taking a loan from a loan shark. In good old days people used a wad of cash to pay everything starting from furniture to grocery, if they did not have enough, they would wait for something cheaper or for the time when they had sufficient amount of money.

'Pay cash' is always a better and simple approach to managing finances because that's a trouble-free rule which even the regulations from the Consumer Financial Protection Bureau can never match. A pay day loan can attract more as fees than the amount itself, if one cannot pay back in time.

Most people know how disastrous pay day loans can be But still it is estimated that more than twelve million people take out payday loans every year. Such loans of $300 or $500 can even have a yearly interest rate of 391percent.

There are approximately 16,000 lenders who run their lending outfits at storefronts in shopping centers also online.

In the first of its kinds, Federal regulators have proposed a noteworthy crack down on payday lenders along with loans that demand high rate of interest. The industry mainly targets the poor and desperate who want to quickly borrow money to cover unexpected expense or pay back another loan.

In case the proposals become rules, it will cause a countrywide tightening and restructuring of the payday loan industry which is worth about $38 billion.