Today I was looking through the coupons and I was shocked to see a loan being advertised for 17.65%. Their example was a 7,500 loan at 17.65 % APR for 60 months. You’ll only pay $189.02 per month. Wow! That sounds great you might be thinking. But, if you end up paying for the full 60 months with no penalties you’ll be paying $11,341.20 for that $7,500 loan. That is $3,841.20 in interest which is 51% of your original loan amount.
Can this be legal? Sadly yes and many people make the deal out of desperation or just lack of knowledge. The Center for Responsible Lending claims that 12 million people are trapped in loans with 400% interest. Payday Loans are the worst. See what your state laws are on these loans. If you are in the military there is some protection. Can you believe that we have to protect our servicemen and women (many who are young and have a large first paycheck and signing bonus) from these type of loans. Also, some big banks like Wells Fargo & are getting in the lucrative business. Beware they are coming to your bank soon! What can you do? Take ACTION with several options at the Center for Responsible Lending.
Picture by Surfonaut.