Payday loan

[jaker2731]

Any thoughts on them?

[LadyInTheRed]

That's a very vague question. But, when I saw the title of the thread I cringed.

Pay day loans are the worse kind of credit you can get. Terrible rates and terms and the lenders are the worst of predatory lenders.

Why are you considering one?

[jaker2731]

I'm not necessarily considering one, I'm just wondering in there is a emergency and I have nothing else to turn to would that be an option.

[AngelinaCat]

Not unless you like paying it back at 300% interest.

[LadyInTheRed]

I just looked at your other posts and see that your Chap 7 was just discharged a couple of months ago. You need to live within your means and start building an emergency savings. Credit should not be used as an emergency fund. But, if you must have an emergency back up, wait a few months, pull your credit report and clean up any errors and then apply for a credit card that you can put in a glass of water and freeze in case of emergency.

Many people who take payday loans find that when payday comes along and a big portion of the check goes to pay the loan, they have no way to get to the next payday, except to take another payday loan. It's a vicious cycle. Stay very far away!!!

[AngelinaCat]

A payday loan is the financial equivalent of cocaine.

[frogger]

A payday loan is the financial equivalent of cocaine.

Crack cocaine.......

[AngelinaCatHub]

Many people who take payday loans find that when payday comes along and a big portion of the check goes to pay the loan, they have no way to get to the next payday, except to take another payday loan. It's a vicious cycle. Stay very far away!!!

This is extremely true. I have a (former) friend who borrows $500 every month and pays it back $550. Then repeats this. She is said to have been quite intelligent. We had a bit of money once, and I bargained with my friend that I would give her $1000 to pay off the loan and have $500 ahead where the loan would have fit. It would have made her fifty bucks a month in saved money. She lasted three month and got back on the hook of Payday narcotics.

No longer will I help this ungrateful person. She will forever keep herself poor. This too is a sickness. 'Hub

[Freddy03]

It's a vicious cycle. It's very hard to break.

[TheBajan]

I walked into a payday loan center for the first time in my life a few weeks ago. I didn't go there to borrow money. I sell dogs and one of my buyers had paid me with a money order drawn from a financial institution I had trouble trying to cash so I went there wondering if they could cash it. When I walked in, there was one customer at the counter. I sat down and waited. They spent 45 minutes with this customer and to be honest I was so intrigued by what was going on that I stayed the entire time. There were 4 employees "working". Three of them were talking shop and one was assisting the customer. No one even acknowledged my presence. There was no regard for the customers privacy and I was able to observe and listen to the entire transaction. Apparently, she was a new customer signing her life away for a $600 one week loan at an astounding repayment of $673. This was just for one week!!! I had no idea that rates like that were even legal. I remembered thinking to myself what could be so terribly vital that it would be worth paying that sort of interest to borrow for one week??? When she was finally done giving them her life history, social security number, bank account info, ect and they finally finished, they gave her a stern warning to be sure she pays it back on time. She confidently acknowledged that wouldn't be a problem and left with her cash in hand. I felt so sad for her. I knew and they knew she would be back for more. When my turn came, I smiled and asked whether I would have to go through same rape that I had just witnessed to cash a money order. They said yes and I walked out. I ended up just depositing it into my checking account instead. What an experience that was. All tooo sad and so very true that it's the crack of the financial world. I could see on their faces that they knew it.

Stay away.... stay FAR away!!!

[Sammie]

Loan Sharks have better interest rates. I read the fine print on the Indian Pay Day Loan on TV (I actually TV'od it to read it). $5,000 dollars in your checking acct. tonight--$487.00 a mo. for 84 mos. WTH--seriously?

They can get away with this because they "claim" that they conduct business on an Indian Reservation and are not under Fed. guidelines.

[HHM]

Loan Sharks have better interest rates. I read the fine print on the Indian Pay Day Loan on TV (I actually TV'od it to read it). $5,000 dollars in your checking acct. tonight--$487.00 a mo. for 84 mos. WTH--seriously?

They can get away with this because they "claim" that they conduct business on an Indian Reservation and are not under Fed. guidelines.

I have seen similar ads, all from Indian reservations. $10,000, the APR works out to 89.9%. The payment is the equivalent of a luxury car lease.

[Pjmax]

If you paid yourself $487/mo. for 84 mos., you could buy the lux car for cash! $40,908! (Plus the interest in your savings.)

[angel7821]

I have never done payday loans nor will I ever consider doing one. I think some people become so desperate for money they don't even think about what they are getting themselves into. They just know they can get quick cash this way. It is a very sad situation if one falls into this kind of trap.

[HHM]

angel7821, I certainly understand where you are coming from, and I agree.

But there really is economic stratification in our society. Payday loans do satisfy a need and are very profitable enterprises. I have said this in other areas of the forum. Bankruptcy is a tool of the middle class (and formerly wealthy). The reality is that the poor and lower middle class can't get traditional credit, they are already living paycheck to paycheck and minimal savings and limited ability to save, so when something happens, there only outlet is payday loans because they can't whip out a credit card. It's unfortunate, to be sure.