I hate the concept of payday loans so much I wrote my own negative position on the subject here, and only accept articles that are against people doing it. For those of you who don’t know what these are, their loans you can get from companies that will tide you over until your next paycheck. They’re usually pretty small loans; you’re $100 short until payday and you need it now instead of waiting a few days without it. The thing is that the interest rates are high, sometimes as much as 1000% on some smaller loans, and the terms are such that you could end up owing thousands to these companies when you only started out owing a small amount.

Credit squeeze
Creative Commons License Alan Cleaver via Compfight

It turns out that I’m not the only one who’s seen these companies as the scams they are. Last week the Attorney General of New York state collected fines of around $300,000 from payday loan companies for violating the states laws against exorbitant interest rates. It banned those companies, and a debt buying company, from working again in the state, from collecting on anything outstanding that they say they’re owed, and the debt buying company has to reverse more than 8,500 negative reports on credit reports for those consumers. The cap on loan interest in New York is 16%; see, there are benefits from living in this state.

I’m not even mentioning these companies names, but if you want to see them, as well as 35 other names that are linked within the story I’ve shared above, by all means check it out. These people are scammers to the nth degree, and it’s amazing how gullible many consumers are when it comes to things like this. Folks, if it sounds simple it’s not; buyer beware, but if you’re not aware hope to live in a state that can help you out.

What’s the better option? Actually there are many.

The first is to not get into this position in the first place by understanding the difference between the money you have, the money you need to spend and the money you want to spend; did I say “budget“?

The second is to read everything you’re even thinking about putting your name on, especially if you’re about to be indemnified for something that’s going to cost you more than what you’re getting in the long run.

And the third, research companies online that you’re thinking about working with before you decide to hook up with them. Sure, you’re going to find many false positives about almost all of these companies, but in my searches I’ve found way more negative reviews about every payday loan company I’ve ever looked up, though I’ll admit I haven’t looked up lots of them because I’ve always known better.

Now you do also.

Digiprove sealCopyright secured by Digiprove © 2013 Mitch Mitchell
Tweet about this on TwitterShare on Facebook0Share on LinkedIn0Share on Google+0It's only fair to share...