Payday Lending | Federal Trade Commission


[MUSIC] John’s truck broke down. And he needed money quickly
to get it fixed. He couldn’t get a loan. And his credit card
was maxed out. So, John went to a
payday lender. To get his $500 in cash,
he had to give the lender a check for $575– $500 to repay the loan
and $75 for a fee. John didn’t have the money in
his account right then. But it didn’t matter. The lender would hold the check
for two weeks until the loan was due. But after two weeks, John didn’t
have enough money to pay back the loan. So he paid the lender $75 more
to roll over his loan. That means he got two more
weeks to repay the loan. And two weeks later, the
same thing happened. John paid another $75. That bought another two weeks
to pay back the loan. It took John 12 weeks–
that’s three months– to save enough money to repay
the original $500 loan. In the end, John paid $1,025
when he only needed $500. That was a really
expensive loan.

4 comments on “Payday Lending | Federal Trade Commission”

  1. 박수진 says:

    eeexxcеellent

  2. youngtrapjesus says:

    this on some gang gang my dood

  3. 12dollarsand78cents says:

    Sadly if he didn't have any other means of getting his truck fixed, he could have lost his job, resulting in thousands of dollars lost.Law makers need to make it illegal to charge over 100% A.P.R. for any time period.

  4. Michael Hohn says:

    good

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