Comments on: The 1460% Loan http://www.savingadvice.com/blog/2006/10/13/10875_the-1460-loan.html Bridging the gap between saving money and investing Tue, 24 Nov 2009 22:38:31 -0800 http://wordpress.org/?v=2.8 hourly 1 By: Jerry J http://www.savingadvice.com/blog/2006/10/13/10875_the-1460-loan.html/comment-page-1#comment-351269 Jerry J Mon, 30 Jun 2008 10:09:33 +0000 http://www.pfadvice.com/?p=875#comment-351269 Payday loan charges may well be so high as to be out of order, but I was talking to our local Pawn Broker the other day and he does a roaring trade in cheque cashing at 6%, and none of his customers complain at that - they are only to eager to get their hands on the money! Payday loan charges may well be so high as to be out of order, but I was talking to our local Pawn Broker the other day and he does a roaring trade in cheque cashing at 6%, and none of his customers complain at that – they are only to eager to get their hands on the money!

]]> By: Lewis http://www.savingadvice.com/blog/2006/10/13/10875_the-1460-loan.html/comment-page-1#comment-214100 Lewis Tue, 15 Jan 2008 18:14:53 +0000 http://www.pfadvice.com/?p=875#comment-214100 The other thing to factor in with credit card APR's, is they are compounded daily based on average rates, and at the end of the year, your total interest will be greater than the % listed on the paperwork if you carry a balance. Most reputable payday lenders have a flat service fee, which is never compounded or added to. NSF and/or late fees aside (where applicable). Also, most are willing to work with there customer just like any company, offer repayment plans, grace periods, and extensions. The citing of Annual percentage rates to compare a loan of a couple weeks to a month to a daily compounded rate is comparing apples to oranges, or at least a Granny Smith to a Fuji. The other thing to factor in with credit card APR’s, is they are compounded daily based on average rates, and at the end of the year, your total interest will be greater than the % listed on the paperwork if you carry a balance. Most reputable payday lenders have a flat service fee, which is never compounded or added to. NSF and/or late fees aside (where applicable). Also, most are willing to work with there customer just like any company, offer repayment plans, grace periods, and extensions. The citing of Annual percentage rates to compare a loan of a couple weeks to a month to a daily compounded rate is comparing apples to oranges, or at least a Granny Smith to a Fuji.

]]> By: Lisa Eisner http://www.savingadvice.com/blog/2006/10/13/10875_the-1460-loan.html/comment-page-1#comment-116896 Lisa Eisner Mon, 24 Sep 2007 12:37:06 +0000 http://www.pfadvice.com/?p=875#comment-116896 I agree the rates are awful. The truth is though a payday loan is often the only option for the very low income. I had a FICO score of 730 with no collections and could not get a $300 loan from my credit union. I have been receiving direct deposits at this credit union for over 2 years, have never bounced a check, etc. I appealed the denial to the board of directors and was still denied. I opened another account at a different credit union. This time my EQ FICO was 770. I was denied a loan again due to my income. This time I attempted to take a loan out for $1,100 as a collateral loan so I could buy a car. They looked up the car and said it was worth 5K but they would not approve me for the loan because of my income. It often has nothing to do with credit or money management. They traditional financial institutions have lending guidelines set up that exclude the very low income. It's not always a question of paying a bill "late", it's sometimes about keeping electric turned on or paying the court rent before you and your children are evicted. I wish people would give those getting payday loans the benefit of the doubt that they have exhausted every other possibility. There is so much criticism of payday loans but most banks/credit unions are not willing to lend to the very low income. I had a difficult time even getting each credit union rep to finish my application once I stated my income. I agree the rates are awful. The truth is though a payday loan is often the only option for the very low income.
I had a FICO score of 730 with no collections and could not get a $300 loan from my credit union. I have been receiving direct deposits at this credit union for over 2 years, have never bounced a check, etc. I appealed the denial to the board of directors and was still denied.
I opened another account at a different credit union. This time my EQ FICO was 770. I was denied a loan again due to my income. This time I attempted to take a loan out for $1,100 as a collateral loan so I could buy a car. They looked up the car and said it was worth 5K but they would not approve me for the loan because of my income.
It often has nothing to do with credit or money management. They traditional financial institutions have lending guidelines set up that exclude the very low income.

It’s not always a question of paying a bill “late”, it’s sometimes about keeping electric turned on or paying the court rent before you and your children are evicted. I wish people would give those getting payday loans the benefit of the doubt that they have exhausted every other possibility. There is so much criticism of payday loans but most banks/credit unions are not willing to lend to the very low income. I had a difficult time even getting each credit union rep to finish my application once I stated my income.

]]> By: Buying Someone Out - Money Minute Video - SavingAdvice.com Blog http://www.savingadvice.com/blog/2006/10/13/10875_the-1460-loan.html/comment-page-1#comment-56123 Buying Someone Out - Money Minute Video - SavingAdvice.com Blog Fri, 08 Jun 2007 10:20:27 +0000 http://www.pfadvice.com/?p=875#comment-56123 [...] Four Reasons You Should Get A Payday Loan: A nice attempt at a contrarian point of view, but payday loans are some of the worst that you can get - like the 1460% Loan. [...] [...] Four Reasons You Should Get A Payday Loan: A nice attempt at a contrarian point of view, but payday loans are some of the worst that you can get – like the 1460% Loan. [...]

]]> By: Cindy http://www.savingadvice.com/blog/2006/10/13/10875_the-1460-loan.html/comment-page-1#comment-7537 Cindy Sun, 15 Oct 2006 01:30:35 +0000 http://www.pfadvice.com/?p=875#comment-7537 No questions the interest rates on payday loans is usurious and egregious. Just one more reason to plan ahead and have an emergency fund to cover finanical emergencies and not even need a payday loan in the first place. The sad truth is the vast majority don't and in any transaction the party who's desparate will get the short end of the stick. And let's not forget interest rates can be deceiving. If a borrower were to secure fast emergency cash and pay $20 interest in a 5 day loan of $100 sure the interest rate is astronomical, but it's still $20. And it that $100 helps you pay a utility bill or maybe even two and avoid 2 $30 late fees. Was it worth it? No questions the interest rates on payday loans is usurious and egregious. Just one more reason to plan ahead and have an emergency fund to cover finanical emergencies and not even need a payday loan in the first place.

The sad truth is the vast majority don’t and in any transaction the party who’s desparate will get the short end of the stick. And let’s not forget interest rates can be deceiving. If a borrower were to secure fast emergency cash and pay $20 interest in a 5 day loan of $100 sure the interest rate is astronomical, but it’s still $20. And it that $100 helps you pay a utility bill or maybe even two and avoid 2 $30 late fees. Was it worth it?

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