I don't know - I've never dealt with either, but when a $5000 loan costs over $40,000 to repay I can't help but think someone is getting screwed.
My wife works at a loan company, but they do not do payday loans. They do high risk secured loans. They are expensive, but you have to consider the clientele.
A woman making 85k a year working in the medical field comes in to borrow $300 because she blows 2k a week at the casino. They get ALOT of those, probably 65% of the business is due to gambling. IMO they deserve to get it up the backside without lube due to horrible money management. These people pretty often get taken to court to recover funds. I am okay with this. Same with the guy that is on welfare and food stamps but somehow has the money to drive around an escalade with a $5000 stereo.
The rest of the business are people down on their luck. They very often cannot make their payments and are usually behind. Atleast in a small town like this, they are rarely taken to court and the loan people work very hard at getting them caught up and in good standing. Not because of the company per se, but because of good people knowing that good people run into hard times occasionally.
But that place.....i mean wow. I especially like how the contracts states you basically have to give up all of your rights so the tribal court can screw you over.
A woman making 85k a year working in the medical field comes in to borrow $300 because she blows 2k a week at the casino. They get ALOT of those, probably 65% of the business is due to gambling. IMO they deserve to get it up the backside without lube due to horrible money management. These people pretty often get taken to court to recover funds. I am okay with this. Same with the guy that is on welfare and food stamps but somehow has the money to drive around an escalade with a $5000 stereo.
The rest of the business are people down on their luck. They very often cannot make their payments and are usually behind. Atleast in a small town like this, they are rarely taken to court and the loan people work very hard at getting them caught up and in good standing. Not because of the company per se, but because of good people knowing that good people run into hard times occasionally.
But that place.....i mean wow. I especially like how the contracts states you basically have to give up all of your rights so the tribal court can screw you over.
I am far from a math genius. However I do dispute some of the silly interest rates that are posted on the doors of payday loans. For example if you borrow $100 from one of them you pay back $120. 20 is 20% of 100. So in my simple math land it is 20% interest. Now all you smart math people explain to me how that is over 100% interest.
I am not really for or against payday loans. If you need them they are nice if you go there to get the money be prepared to pay the interest.
Because interest is figured on a yearly percentage. At 20% interest it would only cost you $20 if you took a year to pay.
You Borrow: $100.00
You Payback: $115.46
Finance Charge: $15.46
APR: 403.06%
14 day laon
Yes, that is accurate for simple interest, but this a bit different. The rate is based on the APR, or Annual Percentage Yield. So you have APR= Ix time/year. Payday loans are generally based on 2-week intervals; APR= 20% x 26, which means the APR is 520%.
First, what is the amount of credit the borrower will receive (Amount Financed) = i.e., $350.00.
Second, what is the dollar amount the credit will cost (Finance Charge) = i.e., $50.00.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the total Finance Charge ($50.00) by the Amount Financed - the amount the
borrower will receive ($350.00) = 0.142857.
Step 2 – Multiply the answer (0.142857) by the number of days in the year (365) = 52.142857.
Step 3 – Divide the answer (52.142857) by term of the loan (14-days) = 3.724489.
Step 4 – Move the decimal point to the right two places and add a percent sign = 3.724489
becomes 372.45% Annual Percentage Rate
At that rate, you would have $1700 in interest for a $350 principle loan if you didn't pay it off in one cycle. I took one out a few years ago when my job wasn't paying all the bills and I needed some cash. Paying off a 500 loan in two weeks is not easy, you get sucked in. Sure it sounds reasonable, $50 for a quick 2-week $500 loan, but being able to pay it back without having to re-up the loan is really tough. I paid mine of right away, but add it up when you can take out 3-4 (even though state law is 2 at a time), that becomes $200 a month real quick. That is pretty tough, especially when you already can't make your bills. Just ask my sister.
First, what is the amount of credit the borrower will receive (Amount Financed) = i.e., $350.00.
Second, what is the dollar amount the credit will cost (Finance Charge) = i.e., $50.00.
Third, what is the term of the loan = i.e., 14-days.
Step 1 – Divide the total Finance Charge ($50.00) by the Amount Financed - the amount the
borrower will receive ($350.00) = 0.142857.
Step 2 – Multiply the answer (0.142857) by the number of days in the year (365) = 52.142857.
Step 3 – Divide the answer (52.142857) by term of the loan (14-days) = 3.724489.
Step 4 – Move the decimal point to the right two places and add a percent sign = 3.724489
becomes 372.45% Annual Percentage Rate
At that rate, you would have $1700 in interest for a $350 principle loan if you didn't pay it off in one cycle. I took one out a few years ago when my job wasn't paying all the bills and I needed some cash. Paying off a 500 loan in two weeks is not easy, you get sucked in. Sure it sounds reasonable, $50 for a quick 2-week $500 loan, but being able to pay it back without having to re-up the loan is really tough. I paid mine of right away, but add it up when you can take out 3-4 (even though state law is 2 at a time), that becomes $200 a month real quick. That is pretty tough, especially when you already can't make your bills. Just ask my sister.
JB, You should open a loan company right next to your law office, Then you could get'em twice!!!!
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