Payday loans, title loans and other high interest debt


Imagine if I told you that you’re going to
pay 400% on that loan or that none of the payments you’re making are actually going
to reduce what you owe. Well, it’s true. When you need money, man, the sharks are out. Payday Loans, Title Loans, Check Cashing,
Rent-to-own, Refund Anticipation Loans, Buy Here, Pay Here. The list just keeps going. All of these services know that you don’t
have any options. That means that they’re taking risk and you’re
definitely going to be paying for it. Let me show you a small example. Assume Betty takes a $300 Payday loan for
10 days on October 1st. The fee is usually $15 for every $100 borrowed. That means she’s going to pay back $345 on
October 10th. That is 547% interest. That’s crazy but I know what you’re saying,
you need to money right now. Life’s not always pretty. The commercials are pretty compelling too. I get it. What are your options. First, go to a Credit Union or a Community
Bank. These banks are nonprofits that try to work
with consumers in tough situations. Nothing’s guaranteed but it’s a good place
to start and get some objective guidance. Secondly, take a look at benevolence funds
or hardship funds from your employer. Many employers have these funds to help employees
get through tough times. It’s simply another avenue to explore. Third, borrow from a friend. Now, I hate that advice because friendship
and money rarely mix but if you’re going down the path of paying 500% interest, it may be
worth a call to a close friend. Lastly, maybe you just avoid the cost altogether. If this is to eat or to make sure you’re not
homeless, I get it. Go for it, fine. But if you’re about to rent a 50 inch flat
screen TV. I don’t get it. Look, I can’t judge your situation but you
can. Be honest with yourself. If you’re going down this route, be really
careful and make sure you’re focusing on financial fuel so that you can get out of it as quickly
as possible. Don’t let this be a deadly trap for something
so trivial.

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