I’m all for payday loan alternative products. There is room in the market for anything that customers demand, but some of the things these articles allow to print are rediculous.
For example,
“It’s a high risk to the consumer,” Carrol says. The Better Business Bureau says when you see a triple digit interest rate, beware. “Let’s say you default on a loan like this, 500%,” Carrol says, “it can ruin your life, it’s huge.”
“Ruin your life”? I find that hard to believe considering payday loans:
- Do not report to the 3 major credit bureaus, so they can’t hurt your credit.
- It’s not like you borrowed $500 from your brother-in-law and did not pay him back. Now, you have to face him at Thanksgiving.
- Most, if not all, payday lenders will allow you to enter into a payment plan.
Here’s what the article leaves out (I went to the credit unions website):
- They run a credit report. “…this is one of several determining factors in the decision of your application.” (from their site)
- They may require a co-borrower to sign.
- You must attend mandatory monthly financial coaching classes once a month for the term of your loan.
Sometimes, I think society wants lenders to give away free money. Even when interest rates are low, they use the term free money; but they expect you to pay back the amount you borrowed. People do not realize how many borrowers take out a loan and never make a single payment. This is why the fees are where they are.
You can read the article titled “Non-Profit Offers Payday Loan Alternative.”
