I took out a loan when my car broke down and I had just started a job after graduating technical college about 9 years ago. I did not qualify for a loan through my credit union and literally had about $20 bucks to my name.
I knew the risk, the financial terms, and the interest rate that was close to 500%. I signed the agreement and paid it all back within a month.
All this will do is hurt people who simply cannot get a traditional loan through a bank or credit union. Yeah, yeah I know. People need to be more responsible, but payday loan companies serve a niche. Sometimes they do keep people trapped in payment cycles, but that's because people borrow more than they need and don't understand the risks involved. And besides, how is that different from federal government policies that trap them on welfare and other federal benefits?
This is another example of federal government overreach and Obama playing politics to stoke up more class envy and anger among the black underclass. I bet there'll be some type of Obamaloan that will take over the market, you heard it hear first.
A quick trip to Amscot can solve a multitude of “liquidity issues” for those who live paycheck to paycheck, as about half the population of the USA does.
The interest rate is a straight up 10%, plus $1.00.
Say you need $300.00 to pay your rent, but an unexpected doctors visit or car repair bill cleaned out your tiny savings cushion.
Kiting a check could get you charged with a crime, fines, and possible jail time, in addition to the bank's insufficient funds fee of $35.00.
Not to mention the rental late payment fees.
No bank is going to loan you the money.
But a payday lender will, and on $300.00, the cost will be $31.00.
No late rental fees, no risking a bounced check, and no risking criminal charges and possible jail time.
Any one of the above will typically add up to be much more than $31.00!
Are the feds going to offer a new ultra-short term loan plan?
ROTFLMAO!