Loans

Money Talks: Predatory Loans Are Very Dangerous

Money Talks
Written by Publishing Team

Using a payday loan may seem like a deal with the devil. After signing and getting your money back, you might say, “What did you do?”

Temple, TX – We have all been there at some point in our lives. You’ll be in financial trouble for any number of reasons and just need some quick cash.

However, getting one of those loans that don’t require a credit check and are easy to get may keep you a customer for longer than you think.

With interest rates anywhere from 200% to 300% to 400% and special “teaser” rates offered, these quick cash loans can be obtained easily, but really hard to pay off.

“If you ask me, my personal opinion is that they are placed in certain areas, for people who may need income on a more frequent basis or may need fast cash that is easy to get,” said Rolandos Johnson (Rojo), a financial planner, he told 6 News “And what you get at the end is people who go in and need that extra income and then get in trouble because they got it now, they did everything they needed to do and now they can’t give it back.”

It is by design to keep you as a customer forever.

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 been going to go away so you can’t invest and there’s a lot of things you can’t do. So I would say, that’s for sure, here, Stay away if you can. I know things happen but stay away from this type of loan.”

Unfortunately, some Americans just can’t stay away. Even with this advice according to pewtrusts.org, 12 million Americans take out payday loans each year, and spend $9 billion on loan fees.

Many of these types of lenders are predatory, as Rolondus explained to us: “Uneducated in the way loans work. The way credit works and these different things. And they might have had some mistakes in the past. And so they’ll go out there and get the money they don’t need.” to his knowledge or even to read it in small print saying you know that if you get $500 you will pay me $2500.”

Here’s a small view for you.

As of 2017, there were 14,348 payday loan storefronts in the US, meanwhile there were only 14,000 McDonald’s locations. A typical payday borrower owes five months out of the year. The average income of payday borrowers is $30,000 annually.

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