Using a payday loan can feel like a deal with the devil. After signing and receiving your money, you may be wondering, “what did I do?”
TEMPLE, Texas — We’ve all been there at some point in our lives. You are having financial difficulties for a number of reasons and you just need some quick cash.
However, getting one of these easy-to-get no credit check loans could make you a customer for longer than you think.
With interest rates ranging from 200% to 300%, up to 400%, and special interest rates offered, these quick cash loans can be easy to get, but very hard to repay.
“If you ask me, my kind of personal opinion is that they are placed in certain areas, for people who may need income more frequently or who may need money quickly and easily,” Rolandus Johnson said. (Rojo), a financial planner, told 6 News: “And so what you end up getting is people coming in and needing that extra income and then they’re in trouble because now they’re getting it. have, and they did everything they had to do and now they can’t pay back.”
It is designed to keep you as a customer in perpetuity.
“Rojo” went on to say, “It almost kills your financial future. Because the interest rate is so high. And then the extra money you would have had goes into that so you can’t invest and there’s there’s a lot of things you can’t do. So I would say, and that’s for sure, here, stay away if you can. I know things happen, but stay away from this guy of loans.
Unfortunately, some Americans cannot stay away. Even with that advice, according to pewtrusts.org, twelve million Americans take out payday loans every year, spending $9 billion in loan fees.
Many of these types of lenders are predatory, as Rolondus explained to us: “They don’t know how loans work. How credit works and these different things. And they may have made mistakes in the past. And so they’ll go over there and they’ll get the money they need without knowing or even reading the fine print that says if you withdraw $500 you’re going to pay me back $2,500.”
And here’s a little perspective for you.
In 2017, there were 14,348 payday loan storefronts in the United States, while there were only 14,000 McDonald’s locations. The typical payday borrower is in debt five months out of the year. And the average income of payday loan borrowers is $30,000 a year.