By: Eric Carlos

Eric Carlos — Tue, 30 Nov 2010 20:54:11 +0000

Hat’s off for uncovering the nastiness of this business. Scammers

By: Mike

Mike — Fri, 28 Mar 2008 18:34:04 +0000

Bruce, Please see my comments above in response to Grady, who made
many similar claims to you. If you've had positive experiences with
Payday loans in the past, I am glad that you were able to use them
responsibly. Many others are not so lucky. More than anything else,
many of the people who get abused by payday loans, turn to them out
of lack of understanding and the belief that they have no other
option. Hopefully discussions such as this one will help to spread
awareness of the inherent dangers of using payday loans in a
non-responsible manner as well as inform consumers of much less
expensive alternatives such as p2p loans from Lending Club.

By: Bruce

Bruce — Fri, 28 Mar 2008 04:10:08 +0000

I recently read a Reuters news article, written by Nick Carey, Mar
23rd, 8:15pm ET, titled, "’Pay day’ loans exacerbate housing
crisis". I would like to clarify that there are some great
inaccuracies and bias in this story that really must be pointed
out. I have had extensive experience with pay day loans, and,
though I agree that the APR (annual percentage rate) is quite high,
and people can get into trouble when they do not use these loans as
they are designed to be used, this news report highly exhagerates
the cost of a loan. Read from the article as follows; "A pay day
loan is typically for a few hundred dollars, with a term of two
weeks, and an interest rate as high as 800 percent. The average
borrower ends up paying back $793 for a $325 loan, according to the
Center." This is not accurate! And there was much more inaccuracy
than this in the article. A pay day loan from a legitimate
financial retailer generally costs about $15 for every $100 up to
$500. This means that for a loan of $100 for 15 days the charge
will be $15, totalling the loan at $115, which must be quoted as an
APR of 365%. the actual total pay off for a $300 loan is $345. In
reality it is only a fee that is being paid, not interest. However,
government regulations require that it be quoted as interest, as an
APR. The only way that a short-term loan, a pay day loan, could
build up to the absorbitent amount qouted in the news story, is if
the loan were to be "rolled over", which is highly illegal in
nearly every state that regulates these loans, so, thus, it would
be highly improbable that there would be an average of borrowers
that pay such amounts. Pay day loans are for exactly what they are
named. A short term small loan to be paid off by the next pay date
of the borrower. These loans have saved many a borrower, in a
temporary financial pinch, to pay some bill(s), from much harsher
penalties and costs that are incurred by banks and credit
institutions if checks do not clear or payments are late. The
proper use of a pay day loan actually shows a personal and
professional level of responsibility when it is used properly. Yes,
people do mis-use these loans, people get into trouble, people
borrow beyond their means, and there are less than savory lendors
who do not do what is right in order to avoid such disasters for
their borrowers. Pay day lendors must exercise great responsibility
to protect borrowers and potential borrowers from becoming victims
of borrowing beyond their means. That might even mean turning down
a less than able and questionably qualified customer from
borrowing. I am disturbed to also hear lawmakers and politicians
who are buying into mis-information and threaten the reasonable
management and existence of a very useful and helpful service to
many people. Bruce - Washington

Comments on: Payday Loans Exposed

By: Eric Carlos

By: Mike

By: Bruce