More in middle class using payday lenders

[Liberal_in_LA]

More in middle class using payday lenders

http://www.latimes.com/business/la-fi-payday24-2008dec24,0,3602054.story

More and more middle-class families use the loans "to put off the day of reckoning," she said: "Too many families live with no cushion, so when something goes wrong they turn to payday lenders."

Payday loans aren't available only on payday. The term derives from the fact that they are designed to help borrowers get from one paycheck to the next, usually about two weeks.

Sheryl Loebig is a single mother of four who works as a paralegal for the nonprofit Legal Aid Society of Orange County.

After her aging Chevy Blazer died in early 2006, she cobbled together six payday loans for a $1,500 down payment on a new Toyota Corolla. She had no other credit options, she said, because medical bills had driven her into bankruptcy.

Two years later, the Anaheim resident had racked up $7,000 in fees to renew her loans every two weeks -- but still owed more than $1,000.

This is horrific! $7000 paid to reduce principle to $500! :puke: I hope someone gives the woman the other $1000 to pay off these blood suckers

"I am desperately trying to pay them down, but I just can't," said Loebig, 47, who earns $33,000 a year. "I don't drink. I don't party. I don't go out. I don't have a cellphone. We don't have cable or any of the other amenities. I don't spend much on anything, but I still have nothing left over to pay the loans down."

She had come to dread her own payday, since that meant spending the evening driving around Orange County, writing checks to her lenders.

[wryter2000]

1. These leeches need to be bled dry

Some people need payday loans. The interest rates need to be slashed and the fees eliminated.

These guys make Scrooge look like Mother Theresa

[HowHasItComeToThis]

7. THE FOULEST OF THE FOUL

USURY IS A SIN

[Liberal_in_LA]

10. agreed

[backscatter712]

2. So far, I've managed to avoid getting sucked in by those usurers.

A couple years ago, I had some bad credit card debt, but at that time, I thankfully had a job, so I worked that debt down and settled it, and managed to put some away. Of course, now, I'm unemployed, that money I put away is almost gone, and my standard unemployment just expired (though I'm probably getting an extension, so that should hold the wolves for three more months.)

Even in my desperate financial situation, there's absolutely, positively no way in hell I would ever do business with the payday loan places.

[billyoc]

Calling Raskalnikov...

:evilgrin:

[truedelphi]

3. blame our politicians. The Chicago Mafia had loan rates as highas 150% a year

This was one of the reasons that politicians used to put so much heat on them.

Now these paycheck advance loan centers charge 900% a year - and all because our politicians are bought out on the local, state and Federal level.

We really do live in a Banana Republic.

[Bozita]

15. Amen.

[Robbien]

4. The second anyone steps in the door of one of those payday lenders

the moneylender leeches attach themselves to the poor soul and never go away.

[SoCalDem]

6. and a few years back those payday lenders were bought up by MAJOR banks

so they could get in on the "action"..

This is how "banks" "service" the very people who cannot afford to have a real bank account, or for whom the banks refuse to even offer them accounts.

[knowbody0]

5. I was shocked to learn that the major banks

are owners of these sharks. wells fargo, bank of america etc. that makes them even more vile.

[Hydra]

8. I used to work for one of these companies

I used to joke that I was on "Hell's Payroll."

The best moment I ever had there was when a guy was not approved and called me up to convince me to let him have his loan. He called our service "A blessing"- I told him flat out that he was lucky he was turned down.

The rates they charge are unbelievable- ours were 461.45% APR. Coming from there, ARMs and all the other "fleece the poor" instruments that were revealed after the bubble burst were no surprise to me.

[MadMaddie]

9. They need to close these places. These places are

are predetors...people get into the cycle and they are never able to come out of it.

[TheKentuckian]

11. These companies are almost, if not completely, evil leeches

400-500 APR is completely criminal and it adds a lower level new car payment to already struggling people that needed a little breathing room for groceries, to fix a break down, or to cover rent and in many cases leads to a closed bank account and the associated lack of access and expense once these same folks have another emergency or lose their jobs.

When you make the seediest and greediest loan sharks look like George Bailey, then you might be an evil fuck.

[Bozita]

12. They spread like crabgrass around here just before mortgages started melting down.

They were there when the economic lives of so many began to crumble. Convenient, eh?

SE Michigan here.

[kentuck]

13. Then, they are no longer in the middle class...

would be my guess. They have slid downward into the working class.

[Liberal_in_LA]

14. The same thing crossed my mind. Middle class is shrinking, folks don't want to admit

their not middle class.

[NashVegas]

20. I'll Never Take On a Car Loan Again

This woman's greatest mistake was in using the loan for a down payment on another loan, instead of using it to buy a car outright. Having to put $300-$1k a year into a used car still comes out to less than if you're making $100-$300 payments a month AND full collision + comp on top of liability insurance.

All that said, our economy is going to continue to be fucked as long as wages remain stagnant while everything else goes up.

[ColbertWatcher]

16. I always wondered why those small loans weren't available in America ...

... like they are in Third World countries.

[Yogi]

17. Here in Ohio we passed....

a law this past Nov. that Payday lenders could only charge 28% annually down from 391%. The lenders said this would put 6000 people out of work and they would have to close. I’ve seen few if any closed and heard nothing about job losses from these lenders. I’d be glad if all Payday lenders were gone.

[truedelphi]

18. I've found one or two that are legitimate,

As a result of M's bank not wanting to cash his state tax refund!!

But almost all of them are scurrilous mangy dogs.

And good for you folks in Ohio!!

[riverdeep]

19. Expect to see more of this nonsense.

People are going to be doing increasingly more desperate things as the times become more desperate. Stealing grocery from stores, not paying at diners, selling everything that isn't absolutely necessary.

The sad part is, if we had allowed Al Gore to be president, none of this- not 9/11, not Katrina, not the financial implosion- would have happened. But too many American dopes wanted someone 'they can have a beer with'. Well, you got it, didn't you?

[killbotfactory]

21. They won't be middle class for long

[jberryhill]

22. "for a $1,500 down payment on a new Toyota Corolla"

These payday loan places are criminals.

Money management should be a part of public school curricula. If you don't have $1500 to put down on a new car, then you don't buy a new car, and you certainly don't borrow the down payment.

[Alamuti Lotus]

23. Why did she need to buy a new car if she couldn't afford it?

There is no argument against payday loan places being predatory animals, but on the other hand some better choices can be made in such situations!