Payday loans

John Oliver did a good piece on payday loan companies in last week's episode. Check it out. ^

How do you feel about these companies?

I've never patronized a payday loan business...I've never lived paycheck-to-paycheck like that...so I can't comment on their service. Payday loans are literally the worst means of borrowing money outside of the mafia...at least payday loan companies won't come and break your legs.. The interest rate you end up paying is astronomically high. You're far better off using a credit card, and even that is foolish.

Yeah. I'm glad they are (mostly) illegal in Canada and in 13 states. I'd add that the government has failed in having a social safety net if desperate individuals need to resort to these awful means to make ends meet.

Their interest rates are mind-mindbogglingly high.

Like, you pay them nearly $40 for every $100 you get.

And they must not be illegal in my province (MB) because I see them everywhere (unless it was a recent thing).

Can't comment on MB but in ON they are technically legal but not allowed to charge more than 20% interest rate. There aren't many stores here anyway besides Money Mart.

Should they be allowed to exist? Sure. If you're dumb enough to do business with them, that's your fault.

Do I think they're ethical, **** no.

The people who run them aren't much better than thieves.

These business prey on people when they are financially vulnerable and get them spinning in a spiral of debt.

Like Celine Dion says and that's the way it is.

I watch little to no late night talk shows, but I find this segment pretty darn funny. I'll be keeping on you, John Oliver.......

One kid I served with was into these guys for $34k. Blew my mind. I don't think he's paid them off yet and the discharged him early because they didn't want to deal with him any longer.

@airshocker: wow 34k? How is that a payday loan? I thought they only would lend you what you could pay back in one paycheck? How is 34k even allowed? I know someone who used them to get rent money. We ended up letting them borrow 500 to pay them back because they were family and they had their car title tied up with them.

@Aljosa23: This is loansharking gone legal and taking advantage of weak minded people who doesn't know how to control their finiances.

So even though its a free market and all i get why these practices need to be prevented.

34k? Holy shit lol. I wonder if he borrowed from one of those companies that had to pay millions because of a class action but probably wouldn't have got a lot.

The video was dam funny, never seen that show before because I'm from the UK but I like that show. The Sarah Silverman "Anything Else" segment was funny.

I've been in a payday loan cycle before, with Wonga the biggest UK payday loan company.

The first loan was to address several unexpected issues in one month, it snowballed to the point id be in the cycle of on payday paying off my loan. Then about 6 or 7 days later running out of money and re-applying.

I got out the cycle through will power, I managed to lend less and less each month until I no longer use them.

A typical loan from them was to lend £1000, and in 28 days on my next pay day id pay back about £1250, pretty much my whole wages.

I know several people who are in trouble with Payday loans, the main reason is because they miss payments then avoid the company and not speak to them. Wonga are actually decent if you call them and say your screwed they will freeze your interest and ban you from taking out any further loans.

This does not excuse there terrible practices in the first place, but the people who lend from them often lend fully aware they can not pay the loan back.

@Jacanuk: "This is loansharking gone legal and taking advantage of weak minded people who doesn't know how to control their finiances"

C'mon dude, sometimes unexpected expenses pop up at the worst time and not everyone has family or friends that can help out financially and not everyone can afford to save vast amounts of money incase of costly emergencies or whatever.

They have gambling help hotlines. Cod they not have payday loan help hotlines?

Yes, unexpected expenses can come but as to saving up its all about priorities and about thinking more than from paycheck to paycheck.

Also if you cannot go anywhere else then a "loanshark" like payday loans, then you need to look hard at your credit rating and also have a chat with your bank on how to improve your standing with them.

@Jacanuk: "Also if you cannot go anywhere else then a "loanshark" like payday loans, then you need to look hard at your credit rating and also have a chat with your bank on how to improve your standing with them"

True

This may be the case, but you're better off trying to work directly with your debtors than to patronize these payday loan predators. If people actually lived below their means and built emergency savings, this wouldn't happen. If you make $25k a year, you shouldn't have a smartphone, a newer car, and cable TV.

@bforrester420: "If people actually lived below their means and built emergency savings, this wouldn't happen. If you make $25k a year, you shouldn't have a smartphone, a newer car, and cable TV"

Agreed. it's like the world tempts you into debt, it takes a great deal of discipline to resist accumulating too many monthly payments lol.

Other than utilities (electric, water/sewage, ISP, garbage, Netflix) and insurance (homeowners and two cars), the only monthly payment I have is a mortgage. I make a pretty good living (between 65 and 70k), but even I don't have cable or a cell phone.

Sure, I spend money...I go out to eat more often that I should and I play golf once or twice a week...but I've got 6-months of expenses in savings and a bit over a quarter million in retirement savings. Even before I was married, when I lived alone and didn't earn as much, I always put away at least 10% into retirement an put a portion of my earnings in a savings account.

ugh whats wrong with me having a smart phone? i like to use the internet on the go. i dont have the other two though, got rid of cable last month.

If you're able to pay all of your bills and tuck away money for the future, there's absolutely nothing wrong with you having a smart phone. I should have stated as much in my earlier post.

never had to deal with it. but like most other things, buyer beware.

It's a type of loan sharking that's only slightly better than borrowing money from the mob. There's a reason states are increasingly regulating or outright outlawing them.

@bforrester420: "If you're able to pay all of your bills and tuck away money for the future, there's absolutely nothing wrong with you having a smart phone. I should have stated as much in my earlier post"

I think a big problem most people have is that they live for the here and now, or they try and keep up with the jones. They are more concerned with their image than anything else. So sometimes you see a person they have nice phone nice car nice watch jewelry designer clothes and you think they are doing well for themselves, when in reality they are destroying themselves by getting into so much debt to be able to have such things. Money that they could be putting away for the future is being paid to debtors paid with a load of interest ontop.

Never took one myself but I knew a ton of guys in the military that got absolutely raped by these types of lenders. Part of knows that they should be responsible adults and managed their money better, but the other part thinks that these types of loans are designed for people to fall into the trap. Personally I think predatory and should not be allowed to charge such high interest.

Like credit card companies, I don't doubt they expect you not to pay it off, but continue paying a "minimum payment" that covers basically the interest but keeps the principal around. It's how credit card companies make money, and why they offer credit limit increases to people who max out their credit cards and continue to keep up with the minimum payments. They want you to get further into debt, without it hitting your bureau, and the interest continue to compound as the months drag on.

It's how I ended up with two credit cards maxed out with $4500 of debt on them. I used them as a means of covering costs when I was unemployed a few years ago (meaning I just had to cover the minimum payment to avoid getting in trouble) instead of getting an actual loan or line of credit with decreased interest rates.

@foxhound_fox: I ended up with a few grand of credit card debt after being a stupid teen/early 20 something. I just paid what they wanted and it never seemed to end. Then I finally got some help they forgave a portion of my interest and I managed to pay them all off completely in like 2 years. The part the forgave was consider income and then the IRS had me pay them a few hundred in taxes for it.