Comments on: The High Price of “Low Cost” Payday Loans

By: Alex

Alex — Sun, 26 Jun 2011 12:45:27 +0000

While I agree that payday loans can be very expensive in terms of APR its not really a fair way to measure the cost of what is intended to be a short term loan. After all there are certain fixed costs to setting up a loan regardless if the amount is for £100 or £5000.

Regardless if they are expensive or not if people didn’t want them then their would be no market and the companies would be out of business!

By: Wendy

Wendy — Mon, 04 Apr 2011 20:34:59 +0000

It’s frightening how much these loans are starting to take off in the uk too now – over 1 million repeat customers according to this http://paydayloansense.co.uk/2011/03/payday-loans-becoming-more-and-more-popular-over-1million-repeat-customers/

By: bridesmaiddresses

bridesmaiddresses — Wed, 26 Jan 2011 09:50:06 +0000

Do not get your girls wear a plain white bridesmaid dresses.

By: Todd

Todd — Fri, 02 Apr 2010 03:31:37 +0000

Avoid Payday loans like you wold an ax wielding maniac.

By: Michele

Michele — Thu, 01 Apr 2010 19:30:40 +0000

I work in Payroll and I have seen the garnshments of employees from payday loan stores and the interest was 500% and more. Employees would tell me how they borrowed $100 and they would pay it back and because they were a “good customer” (I guess over time) they could borrow more and take longer to pay. One employee told me that she “borrowed” $500 and by the time I received it for garnishment, it was $2500.

The commericals on TV makes it look very glamerous. (friend getting married in Vegas on the last minute, you go to your friendly payday loan store and borrow to travel for the wedding)

Since the economy is now so strained, I see Payday Loan Stores popping up everywhere. Sadly, I have seen them in the more urban neighborhoods.

By: M Matthews

M Matthews — Wed, 31 Mar 2010 16:41:53 +0000

I feel that payday loans have a niche if used for the right situation and individual. In the right situation, a credit card would be a better option, provided you don’t have an existing balances. Provided you use the payday loan to borrow against assets you will/should have, you will be fine. It’s unfortunate that the majority of America isn’t educated on personal finances.

By: Victorino

Victorino — Wed, 31 Mar 2010 14:38:02 +0000

Thanks Lynnae for giving an enlightenment on “low cost pay day loans” that are not really that so. For me, emergency fund can really help us in any future financial troubles. We don’t build it overnight, we build it even at a little by little steps.

Selling stuff is a good alternative. But the problem is, when we are in a hurry, we can’t set a nice price for what we intend to sell.

By: Todd

Todd — Wed, 24 Mar 2010 03:43:48 +0000

Your friend needs help. This is one of the reasons payday loans are so controversial. IN theory I think they make sense. High APR interest rates in exchange for high default risk. The high APR is really never realized if the loan is only for 2 weeks or a pay period. However many people fall into this cycle. I suggest avoiding payday loans like you would an ax wielding maniac.

By: Lynnae

Lynnae — Tue, 23 Mar 2010 06:18:40 +0000

Completely agreeing with you. I should have written that making a charge on the credit card would be a better option, as a commenter above pointed out. That would definitely be better than a cash advance, for the reason you mentioned.

Either way, I still hate credit cards. :)

By: Todd

Todd — Tue, 23 Mar 2010 02:10:04 +0000

Great Article!

One question.

“Even though I hate credit cards, it would be much better to take a cash advance from a credit card at 20% APR than to get a payday loan at 260% APR!”

Do you really want to take a cash advance from a credit card? I think you would like to do this only if you have no balance on it and you know you can pay it off right away. Most credit card companies will place your payments against all other purchases before they do your “Cash advances”. And Cash Advances have higher interest rates usually. This way the cash advance portion is never paid off until you pay of your credit card completely. I agree…I hate CREDIT CARDS!