Monthly Archives: April 2016

Online Payday Loans ??

Online credit is problem enough, payday loans

online payday loan
Payday Loan sign

are worse, but, put them together, getting an online payday loan?

Watch out!

What Is Wrong With Getting An Online Payday Loan?

Well, let me count the ways.

The interest rate:

U.S. payday lending industry that provides the typically 300%-to-500%-interest-rate unsecured loans

Trying to find the S.O.B.s if they do violate the Fair Debt Collection Practices Act, or any other state or federal law.

Payday loan companies often seem to have only an online presence, no brick and mortar, and try to find them when you want to.

Do you really need a couple of hundred dollars that fast?

Are you embarrassed to ask a friend or relative?  Credit union where you work?

Even a 401(k) loan is better.

The vast majority of payday loan borrowers think they are going to repay that payday loan in a week or two.

And, that does NOT happen.  The loan keeps rolling over, the interest payments continue; many of my bankruptcy clients then get another payday loan, because the money they would have for that situation has been paid in interest on the first payday loan.

Usually, you have signed papers authorizing them to take the payday loan payment right out of your bank account.

Then you forget, and get bounced check fees on top of the payday loan interest.

From Kevin McCoy’s USA Today article linked to above:

Half of the borrowers who got the high-interest loans online later were hit with an average of $185 in bank penalties for overdraft and non-sufficient funds fees when the lenders submitted one or more repayment requests, the Consumer Financial Protection Bureau analysis found.

I know it is tough, but, set aside $200 or $300 in cash at home for the kind of “emergency” that you would be tempted to take out a payday loan to pay.

Freeze the cash in the freezer (an idea I saw in Reader’s Digest decades ago) or do something so that you have to think for a little while before you spend the money.

 

photo credit:

By Gregory F. Maxwell <gmaxwell@gmail.com> PGP:0xB0413BFA (Own work (Original caption: “By Uploader”)) [GFDL 1.2 (http://www.gnu.org/licenses/old-licenses/fdl-1.2.html)], via Wikimedia Commons

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Zombie debt

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