Pay day loans?

iVillage Member
Registered: 06-03-2003
Pay day loans?
5
Tue, 09-28-2004 - 4:24pm
I am just curious. I have only heard horrible things about these loans. Why are they so bad? If you intentionally get these loans knowing you have to pay them back on pay day? It seem to me if you know the fees and you pay back the fees plus the amount you borrowed it's all good right? Unless these people cannot really afford the fees or they had no money on pay day i guess.
iVillage Member
Registered: 05-06-2004
In reply to: kenkat25
Tue, 09-28-2004 - 5:47pm
I've been wondering the same thing. I'm sure the finance charge is high, but you would know that from your paperwork.
iVillage Member
Registered: 06-15-2003
In reply to: kenkat25
Tue, 09-28-2004 - 8:16pm

HIGH? Yeah I think they average about 50% interest. NY puts an interest cap of 30% on loans, so you won't even find a payday place here, guess they won't make enough.


Other then that, I dont think they are 'bad'. Just a rip off. If the interest and fees are less then you would pay in bounced checks, late fees, etc. then it definetly makes sense to utilize one, as long as you dont get in the habit of it as an easy way out.


I read an article once about these places, and one reported a girl writing a thank you letter, because without their loan she would not have been able to go out shopping with her friend. That, I think is dumb...lol...


I guess if it is better then paying a bill late, it is worth it. I would try calling a CC company or a utility first though and ask for an extension.


They just tend to get a bad name because they

~okee

(formerly oneandonlyother)

iVillage Member
Registered: 05-06-2004
In reply to: kenkat25
Tue, 09-28-2004 - 10:48pm
I think there should be a law about how high a c card can charge (its finance rate)and they shouldn't be allowed to change the f. rate whenever they want to. donna
iVillage Member
Registered: 03-25-2003
In reply to: kenkat25
Tue, 09-28-2004 - 11:25pm
I had to do this once. They charged me 35.00 for every 100.00 I borrowed. You have to take them out in 100's as well so I got charged 70.00 to borrow 200.00 for three days. It was unadvoidable to do as it was for daycare for my son and It had to be paid.
Avatar for lovmy2kids
iVillage Member
Registered: 03-26-2003
In reply to: kenkat25
Wed, 09-29-2004 - 1:08am
Typically the reason you hear bad things about these places is that people tend to fall into a cycle or (trap) when using them. The fee's are extremely high and you pay back the loan and the fee on pay day. What happens then is that you run out of money before the next payday because you had to take a portion of your paycheck to payback the money you already borrowed. Since you are out of money before payday again you borrow money again from a payday loan and the cycle starts and then continues. It really is better if a person can avoid using these places in the first place. I guess it's good they are there in a emergency, I haved used them a time or two in the past. I would not use them again though. I had a bad experience with confidential information. The company was an over the internet direct deposit one where you had to fax them your information. I had to fax them my paycheck stub 3 times before they finally received it. Who know's where my info was sitting the other times. They also have a secure site where you can few your documents on line. I signed in with my social security number and secret password and low and behold It came up with someone elses information. Someone elses bank statement that had a name, soc number, address, account number and all transactions including deposits from her place of employment. It's scary to think what could of happened if this information fell into the wrong hands. Even more frustrating is that I reported the problem and they never did fix it. I informed them I would never use them again because of the security problems and they still did not fix it!!!!! I now know it's better just to wait till payday and not give up my money to fee's and private information. Even if on occasion I have had to float a check till payday.

-Darcy