Tuesday, August 25, 2009

Protect yourself, don't use quick loans

The Consumer Protection Predatory Lending Act is one I hope to see pass here in Wisconsin. I think quick loan stores are a financial trap out of control across the country. Interest rates are so high on these loans that you have to pay enormous ammounts to clear the way to the principal. Take my situation for example.

I didn't just go out and get this loan without taking anything into consideration. I did my math and planned out when I could pay off the 600 dollar title loan I got from Payday Loan Store. I didn't expect my finances to take a whopping change at 65% of my income. This didn't matter to the loan store though. There are no fall back clauses for hardships, even the sudden ones.

Thanks to my condition and the interest rate I made $170 dollars a month into the pockets of the lenders and just $5 on the balance of the loan. On a couple of occasions I had to roll over the loan, borrow for the payment amount and that suited them just fine.

They've collected over $2000 from me on an $600 loan that I now owe over $1100 on. My next interest payment will be about $221 and won't put one dime on the principal.

Far more desperate people get these loans for a variety of reasons as well as those who are just plain financially lazy. The loan looks good and covers a short term need or want. After that, however, you have monstrous interest to pay and you better hope you can cover it and not have to roll it over at all. Thousands of people are hopelessly trapped in these pitfall quick loans. Many of them for the titles of their cars. That's my loan, if I can't keep up the interest payments I will lose my van.

So this is a special message for all of you out there. Watch out with quick and easy payday loans. You might just throw yourself into a financial hole that you can't get out of.

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