Payday Loan: Get an insight into its drawbacks

Are you going through a short term cash crunch and are planning to opt for payday loans? Before you consider using them, view this video about the drawbacks and the pitfalls of payday loans. Get an insight into different types of payday loans, how they work and what harm can they cause to your financial health.

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• loan
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• drawbacks
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[hefnerroger]

I have made several loans, as long as you pay them back in a month or 2 I have never had a major problem, I think if you cannot afford to do the loan don't do it, maybe go borrow from a friend or family member. or just don't do a loan.

[Anavengertg]

@fermionsandbosons You cannot even type liar properly. Moron!

[checkngoanswers]

You mentioned payday loans "cost" Americans $4.2 billion in fees. But in 2006, consumers spent $4.2 billion in ATM charges to withdraw their own money. They paid an estimated $22 billion in NSF fees to banks & credit unions, and banks collected an estimated $10.3 billion for overdraft protection. Businesses charged an estimated $57 billion in late bill payment fees. And credit card interest cost consumers more than $87 billion.

Watch the attached video for APR comparisons.

[kabloozie]

economist Donald Morgan:

Who then benefits from payday loan bans? Credit unions, for one, notes Morgan. He says interest rates on overdrafts charged by credit unions and banks can exceed 2,000 percent, dwarfing the high interest rates on payday loans. Credit unions, he adds, have been especially hurt by payday lenders cutting into their overdraft fees.

[kabloozie]

The notion that $793 is paid for every $325 loaned is deceptive. It suggests that an individual takes out a single loan of $325 and pays it off along with an additional $468 interest. In fact this number is based on an assumption that a borrower receives a $325 loan and pays a fee of $52 nine consecutive times, piling up $468 in interest before the borrower is able to pay off the principal. This is precisely the type of rolling over that is widely limited or prohibited by law.

[kabloozie]

the claim of APR as high as 390 percent disguises some important caveats. To reach this APR, the consumer would have to roll the loan over repeatedly. This scenario is unlikely, it says, since rolling over these loans is illegal in 22 states and severely restricted in eight others.

[shyguy0252002]

what about the predatory lending of banks? What is the APR on a bank overdraft? What about Utility companies? What is the APR on a late fee? Credit Card Companies? They have been getting away with it for years. PaydayLoan companies are nothing compared to Utilities, banks and credit card companies.

[astrolifter]

Get into the industry, I'll be happy to take your money and not pay it back you greedy scum.

[Ratbeeitch]

I am considering getting in the payday loan business. However with all theses complaints, and countless states wanting to take action against them, I am getting skeptical. But I don't understand why the industry is cutting its own throat. If they continue the way they are going they will be stifled out of business by government regulation.

Come on guys, clean up your act before the government does. Maybe they feel that the end is near and they need to make their money now.