Are you safe from these professional con artists?
Seems with payday loan scams on the rise, anybody who takes out these high interest short term loans could be taken to the cleaners if they are not very careful!
Every day brings a new twist to this business, and the losers are always the underprivileged, poor and minorities.
lets take a look at all the ways these companies find you, and how you can be taken to the cleaners rather quickly.
Location is everything!
Have you ever looked around at where many of the payday loan storefronts are located?
You will find the majority of them close to low income housing, liquor stores, high traffic areas of minorities, and in run down neighborhoods.
These companies know that these areas are going to be perfect hunting grounds for people who are in need of extra money but have less than desirable credit.
Low income areas are the most desirable, as many of these short term loans are actually written out to cover peoples rent and food.
Anyplace where they can be visible to the disadvantaged will work, as these are the people they most want to do business with.
How they work
Most of these companies will offer you a loan with a lump sum payback, but rarely does this end up happening.
Most loans end up getting extended at least 4 times before they are retired in full, and this can lead to huge interest and fee payments by the borrower.
When you extend a payday loan you are essentially paying the fees for the original loan, the interest charge for the first loan which can be huge.
One example of the interest due on a roll over of a $500.00 two week loan is $150.00 plus the fees of $95.00 for a total of $245.00
So, you have $245.00 invested in a 2 week $500.00 loan and you still own the loan company the $500.00, plus another 2 weeks interest of $150.00 and the new fees of $95.00 for a total due in two weeks of $745.00 plus the $245.00 you already paid for a grand total of $990.00 IF you pay this loan off in full.
Not bad for a 4 week loan…… for the loan companies that is.
Summary
This post only scratches the surface on ways these companies can manipulate the laws and take advantage of you.
We suggest if you have payday loan debt you get rid of it immediately by the quickest way possible, and if you need money in the future do not use these companies.
By arming yourself with knowledge you take away all the power they may have over the uniformed!
