Payday Loans Prey on the Vulnerable With High Rates

June 11, 2005 by
Kathy Brewis  
Kathy Brewis
Kathy Brewis
  • Published Content: 22
  • Total Views: 47,120
  • Fans: 0
View Profile | Follow | Add to Favorites
Single page
Font Size
Read comments (8)
More topics
Pay Day Loan  |  Bank Loans  |  Types of Car Loans  |  Payday Loans

The Modern Day Loan Shark

Payday loans are the modern day loan shark. Everywhere you look there is some form of advertisement for a payday loan company. Take a drive down the main streets of where you live. Chances are you will see one or two payday loan companies. Take a ride on the information superhighway and
 you won't have to look far before you see company after company begging you for their business. Open your email and you will find your mailbox full of offers from companies such as Quik Payday.

What are payday loans? According to an article found on www.bankrate.com, payday loans are loans issued against a paycheck. These are short-term, small loans that typically range from $100 to $500. People who use these companies are usually in a desperate situation in which there is not other means of obtaining money. They prey on those vulnerable such as those with bad credit. They may have had unexpected car trouble or there may have been sickness in their family. There are many reasons why people turn to payday loans. Payday loans can be easily obtained. You don't even have to drive to a payday loan store near you. You can simply log onto the Internet and do a Google search for payday loans. Payday loans are also referred to as cash advances.

You only need to provide proof of employment and sign a few documents and then you are all set. If you apply for them over the Internet, you will have to fax in the requested documents. If you have applied for one over the Internet, the money will be put into your account within 24-48 hours.

These companies take advantage of people by charging them with very high interest rates. Payday loan companies simply loan you money until your next paycheck. Because these loans are short term loans the interest on them usually ranges from 300-1000%. Far more than what you pay on your credit card.

Page: 1 2 3 Next »
 Print   Save Read comments (8)   Next piece
Related Video
   
RelatedRecommendedFeaturedMore By This Source
Payday Loans Are Not Consumer Friendly - Watch Out
Many people use payday loans to tide them over in an emergency. What many people don't know about them proves to be costly.
By Glen Morris  |  Published 4/26/2007  |  Read more »
The Predatory, Parasitic Problem of Payday Loans
Payday loans are parasites sucking the financial blood out of the poorest people. They are predators of the desperate.
By Sherri Joubert  |  Published 6/18/2007  |  Read more »
Bank Fees Vs Payday Loans
Are financial institutions like Washington Mutual really just Payday Loan companies in disguise?
By Kris McLeod  |  Published 3/9/2007  |  Read more »
The Truth About Payday Loan Companies
Before you borrow money from these legal loan sharks, read this informative article and learn the truth about payday loan companies!
By Kassidy Emmerson  |  Published 1/23/2007  |  Read more »
CFSA: Protecting the Rights of Payday Loan Consumers
The CFSA was founded for the purpose of protecting the rights of payday loan consumers. Unfortunately, the CFSA is run by the Payday Loan Companies.
By Indigo Moon  |  Published 7/6/2007  |  Read more »
Tips on Getting a Payday Loan
If you are reading this article then you are most likely looking for a payday loan due to some sudden unexpected cost. Please read on before even considering a payday loan.
By Maxwell Payne  |  Published 7/19/2007  |  Read more »
Related information
TakeawaysDid You Know
  • Don't borrow money from payday loan companies unless you absolutely have to.
  • Start a personal budget and live within it.
  • Read the fine print.
 
Comments 1 - 8 of 8  
Comments
Type in Your Comments Below

Without payday loans, the consumers will have to pay more bank fees. Bank overdraft charges are overwhelming to people who had acquire loans from them. People will find themselves trapped in a cycle of debt. They target people who are in dire need of cash and trap them into lots of overdraft charges. That is why banks wanted payday loans to be outlawed since it was their biggest competitor. Do you agree that no fax payday loans be outlawed because big banks are telling lies about them? I have found interesting discussion about bank's nasty issues: http://personalmoneystore.com/moneyblog/2008/08/04/banks-caught-lying-about-the-payday-loan-industry-the-real-predatory-lenders-part-i/ I'm sure you will be surprised with the information provided in this article.
Add a Comment

Posted on 09/09/2008 at 3:09:27 AM

Pay Day Loan Mis-Information Category: News and Politics 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 co
Add a Comment

Posted on 03/27/2008 at 12:03:56 AM

payday loans are good, when you need them, now that the critics are out they don't won't you to get a loan from these places because they counldn't handdle fast money,just because some one gave you a loan, now you hate them, for the simple fact that you just can't give back money that's not yours... it's time to pay!! and now your mad...but i bet you'll pay your rent with that loan...that's why your broke...and you'll always be broke,your a loser, you'll lose in life, you'll lose in court,and you'll lose in trial...the moden day loan shark
Add a Comment

Posted on 12/28/2007 at 2:12:00 PM

In the State of Washington, a customer must repay their payday loan in full before taking out another one. Rollovers are illegal. Further, the payday loan industry also serves the 40 odd million people who work but the banks refuse to deal with due to bad credit or no social numbers or other reasons. Furthermore, many people would rather go to a payday loan store than ask a relative for some money. The Payday stores fill a very real need in the community for short term small loans. The mark-up is 10-15% for a loan. The regular retailer who sells a can of coke marks up 35%. Are we to say that retailer is worse? The reality is that payday stores expose themselves to much greater risk than the local coca cola reseller for lower return. A payday store who lends to 8 people only needs 1 person to default and the owner has lost the profit on all 8 customers. I say to you that you need to get off your high horse and admit that the reason payday stores are around is because big business has wr
Add a Comment

Posted on 05/12/2007 at 10:05:00 PM

I have to say that PDL's are a trap. They will take you down faster than you could even imagine. I know i have them and they are eating me alive, i took one out and because i couldnt afford the finance charge i was forced to get another one...and the cycle continued....you need to understand that even if you have bad credit (which i do) that there is other things out there, you can get credit cards for bad credit which is way better than getting a payday loan. You will pay once a month and can make a minimum payment that still brings down your balance. All i am saying is think before you take out a payday loan they are LOAN SHARKS.
Add a Comment

Posted on 05/02/2007 at 8:05:00 AM

You say "get overdraft protection at your bank" as an alternative to payday loans. That just shows what a spoiled punk you are. Not EVERYONE has good credit. If you don't have near perfect credit, banks are going to tell you to go to hell before they give you overdraft protection. I know. I tried!
Add a Comment

Posted on 10/30/2005 at 10:10:00 PM

If Payday Loan companies are to be outlawed, so should credit card companies. These are all just legal loan sharks. But the fact remains, the poeple using them are doing so of their own free will because they are in a tight spot.
Add a Comment

Posted on 10/30/2005 at 10:10:00 PM

Yeah, out of desperation. They know these people are desperate so they know they can get away with these outrageous practices. Maybe you should put yourself in their shoes and see what you would do if you were really desperate.
Add a Comment

Posted on 07/03/2005 at 7:07:00 PM

Comments 1 - 8 of 8 

Have more to say?
Become a Source on AC