Moneyes wrote:

FrankN wrote: I would NEVER EVER recommend anyone to getting a pay-day loans. There are better alternatives.

Yeah, like the mafia. Pay Day interest rates are insane. Even back when I was younger and didn't know much about finances, I knew that what they were doing was a trap for the people getting loans.

Pay Day interest rates prey on the poorly educated and basically scam people

FrankN wrote: I would NEVER EVER recommend anyone to getting a pay-day loans. There are better alternatives.

Yeah, like the mafia. Pay Day interest rates are insane. Even back when I was younger and didn't know much about finances, I knew that what they were doing was a trap for the people getting loans.

I remember commercials for pay-day loans when I was a kid. When I knew nothing about money and interest rates it seemed awesome. It's been awhile since I've seen a commercial, though I'm sure they have billboards in the parts of town that are more likely to "need" that. "Need" because, as FrankN says, there are better alternatives.

I would NEVER EVER recommend anyone to getting a pay-day loans. There are better alternatives.

The big advertisement I've seen is about referral incentives. It's $25 for the first loan and another $50 for the second loan. What makes this even worse is that the referrer doesn't have to be a customer of the payday loan company. That means landlords and others can benefit even more from your debt if they send you there for a loan.

I never paid just one dollar for any of the loans (and I do mean loans plural). I always paid them off but I was put right back into a situation where I was going to be short again. I finally broke free with a bonus I got unexpectedly. Thank God and my boss for that. It could have been much worse.

FrugalFran wrote: I don't think I've seen commercials claiming to have a one dollar fee. I wonder if the catch is that the loan has to be paid back within a week or something like that.

Oh, I never even thought of something like that, but I bet you're right. There is probably some catch to it with impossible expectations that few of their borrowers could meet - or they'd get the loan from a credit union or bank.

Payday loans and title loans are a fine example of interest rates going wild. Both of these options have unreal interest rates and it causes you to get behind (on the title loan) then they can come and get your car. I used payday loans a couple of times for just for an emergency. Regrets came later.

CentsibleSaver wrote:

FrankN wrote: I agree payday loans are a complete scam and are screwing over people who do not understand finances. If you have a friend who is using it, you should try and teach them why you should NEVER use a payday loan. I also agree it should be against the law.

The industry is illegal in my state and a few others. Wish it was like that nationwide.

Congratulations Frugalfran and Pinky for digging yourselves out which is never easy. Since you've taken out a loan with them before, can you tell me if the commercials that claim you can borrow X amount and only have to pay back a dollar extra are true? I always figured it was just advertising to draw people in but only those with perfect credit scores could get that deal. And of course, those with perfect FICO scores would be more likely to go to a bank or credit union for a loan in the first place.

Totally agree, it takes advantage of people who may not have the financial savy to really understand it either.

I don't think I've seen commercials claiming to have a one dollar fee. I wonder if the catch is that the loan has to be paid back within a week or something like that. I can tell you that the problem with these payday loans is that theoretically, it's only supposed to carry you to the next paycheck and then you're supposed to pay it back. The problem is that most people who take out these loans are living paycheck-to-paycheck and so the next check is spoken for when you take out the loan. So, I could see them offering to loan the money for only one dollar if it's paid back when it's supposed to be knowing full well that won't happy 99% of the time.

FrankN wrote: I agree payday loans are a complete scam and are screwing over people who do not understand finances. If you have a friend who is using it, you should try and teach them why you should NEVER use a payday loan. I also agree it should be against the law.

The industry is illegal in my state and a few others. Wish it was like that nationwide.

Congratulations Frugalfran and Pinky for digging yourselves out which is never easy. Since you've taken out a loan with them before, can you tell me if the commercials that claim you can borrow X amount and only have to pay back a dollar extra are true? I always figured it was just advertising to draw people in but only those with perfect credit scores could get that deal. And of course, those with perfect FICO scores would be more likely to go to a bank or credit union for a loan in the first place.

I have to admit although sheepishly, that I not only fell for it but jumped in with both feet. Luckily I was able to get a consolidation loan from my bank to get rid of those and a title loan my husband had done (oh boy!). We were able to consolidate all those high-interest loans into one we could manage.

I'll admit that I fell into this trap once back in the day. Thankfully, I pulled myself out of the hole it created for me, but what a mess!! I really can't believe that our government allows these loans to continue.

I agree payday loans are a complete scam and are screwing over people who do not understand finances. If you have a friend who is using it, you should try and teach them why you should NEVER use a payday loan. I also agree it should be against the law.

I don't think the laws should be different for payday loans compared to regular loans, at least not as much as they are. If a regular lender charged the interest rates that payday loan lenders did, it would be considered usury and against the law. I understand a higher interest rate, but not 30=50%!