Check Cashing / Pawn your title rip offs

[cbmeeks]

Man, I've always known those "check cashing" or "pawn your car title" places where a rip off but yesterday, I really found out HOW much they rip off!

I was listening to a money talk show (not DR) ...a local one.

Anyway, they were talking about those places saying how they are legal, but un-ethical because of the high interest rates they charge for such small and short loans.

Well a local owner of one of those places was ticked off and he called to complain and tell the radio people they weren't being fair. He said not all of the companies are crooks.

Well, to make a long story short, they radio people asked how much his company charged in interest and in a very serious voice, the man said 391%.

THREE HUNDRED NINTY ONE PERCENT!!!!!

And he was acting like that was a good deal! Hell, maybe it is...I've read that some of them charge 1900%

WHY PEOPLE WHY???

[Snoopy2645]

Not sure how they work all I know is I keep hearing they charge around 400% interest it is weird these places are popping up on every corner & I dont live in a big area I think we have as many of those as we do banks

[boefixepa]

I'd rather sell my blood and live out of my car than walk into one of those places.....I can't even imagine being desperate enough to agree to that. They really should be outlawed....Personal Opinion

[sweeps]

Originally Posted by cbmeeks

THREE HUNDRED NINTY ONE PERCENT!!!!!

WHY PEOPLE WHY???

Why would someone take on a 20% interest rate for that matter? The reason is he or she is desperate.

People don't realize they're paying such high interest because it's a short-term loan. If Joe Blow agrees to hand over his $300 paycheck in 2 weeks in exchange for $250 now, that is "just" $50 in interest. An accountant knows that is 20% * 26, which comes out to 520% annual interest rate, but the average person just doesn't look at it that way.

[Snoopy2645]

I agree it is sad that people are borrowing so much I have had debts but I have always gotten mine at 0% interest!! I know I would never borrow from one of those places I would starve or go without ya know what I mean I think once you start on thier cycle you will be lucky if you ever get caught up also!!

[Ima saver]

You never do get caught up. They showed one couple on tv that made decent money, but always need their paycheck a little early. After months of doing this, they owed thousands, just for getting their own pay early!! It is really dumb. We have one in my little town, it is right next to a mexican grocery store. I think that is get people that don't understand english very well.

[Writer@Large]

Originally Posted by Ima saver

You never do get caught up. They showed one couple on tv that made decent money, but always need their paycheck a little early. After months of doing this, they owed thousands, just for getting their own pay early!!

This seems like the obvious trap to me, and I'm always surprised that people who use those places don't actually see it. Unless it's a one-time, critical money need, all getting the paycheck early is going to do is make you need your NEXT paycheck early, and then your NEXT one, and the one after that ...

--W@L

[poundwise]

These things are not legal everywhere. Here in North Carolina, for instance, the 'pay day loans' have fairly recently become illegal. I'm not sure about the title loans, but I don't remember seeing any, or at the least not many, around here. Unlike my home state, Alabama, where it seems that there is at least one title loan place in every community.

But yes, it is obvious that these places exist to take advantage of people who are desperate or who don't realize what they are actually paying for these loans.

[Writer@Large]

Originally Posted by poundwise

Unlike my home state, Alabama, where it seems that there is at least one title loan place in every community.

Here in the Detroit tri-county area, pay advance places are a sure sign that you're in the "wrong" neighborhood after dark. They prey on the economically depressed areas, and don't even bother setting up business (with the exception of the occasional Check N' Go chain) in the wealthier areas.

--W@L

[Thrifty Ray]

In one of the towns nearby, there is a giant historical brick building...was the Masonic Lodge since the late 1800's...it was recently turned into a check cash place with NEON green signs...right in the middle of the historic area....

There is no better example of a snowball effect than with these slimy places... the rates they charge are outrageous...and those paying the fees are those who can least afford to do so....eventually they are financially drained and ruined.

[Ima saver]

It seems so obvious to us, never to borrow money from a place like that. I wonder why it isn't obvious to others? Some people just don't "get" it.

[Thrifty Ray]

Originally Posted by Ima saver

It seems so obvious to us, never to borrow money from a place like that. I wonder why it isn't obvious to others? Some people just don't "get" it.

No, they don't get it. They are looking for a quick fix to a long term problem. Alot of these people have pawned their stuff, borrowed from friends and families, bounced too many checks to have an account any longer and are resorting to the 'last resort'.

Drugs, gambling and shop-a-holics are the most common reasons.

[Ima saver]

I guess I hadn't thought about drugs/gambling. I am naive. I think everybody is just like us!

[debtdude]

Look at the number of people who live paycheck to paycheck. For many people, this is a fact of life. "Payday Loans," as they are called, can reduce some of the stress for these people.

Am I saying payday loans are good? It's like anything else...if it's used responsibly, then it's ok. But if Bob and Payday Loans 'R Us knows you by name, then you'll soon be filing for bankruptcy.

[Ima saver]

I don't think a loan like that can be used responsibly. The interest rates are far too high!

[veronak]

Wow is all I can say, 391%. That is crazy and unfortunately they prey on people who's credit is dwon hill and are desperate, WOW

[debtdude]

Look at the interest rate in light of the high-risk people they lend money! The more peole that skip town with the money, the higher the rates will be.

[joeswife]

i borrowed money from there one time. i know..i konw..i shouldnt have..but i didnt have anyother way to get the money for a lawyer in child custody case..i was set up for 2 mos payments..each one was 54.00 or so..untill the last one...it was 500.00..huh..i only borrowed like 500. i flippped...my parents werent around..and i needed the money right then..i got the loan..then i managed to get my car sold adn paid it off in one week..it still cost me like $50 in intrest..but i didnt have to pay that last payment..i woulnt ever EVER EVER pay that again...id beg my folks or do something else...but not ever that.

have a good day
ericka

[Thrifty Ray]

Originally Posted by debtdude

Look at the number of people who live paycheck to paycheck. For many people, this is a fact of life. "Payday Loans," as they are called, can reduce some of the stress for these people.

Am I saying payday loans are good? It's like anything else...if it's used responsibly, then it's ok. But if Bob and Payday Loans 'R Us knows you by name, then you'll soon be filing for bankruptcy.

Used responsibly? Where payday loans are concerned, that is an
oxy-moron.

Now, dont get grouchy with me...I know that a very small percentage of those who use these services need them for TRUE EMERGENCIES..and for that small percentage, if there is no other option, apurpose is served.

But for the majority of folks who use these services, it is because they are IRRESPONSIBLE with their money and this is just another (albiet costly) avenue to get quick cash.

Sorry- but I worked at a financial institution and I saw first hand what the real statistics were.

and folks who live paycheck to paycheck are the last ones who should rely on payday loans as an alternative to their financial problems.

[PRICEPLUS]

You're almost better off going to a loan shark. What is the difference. I have seen stuff like this all my life under different names. It is EVIL! Plain EVIL!!!!!