Payday Lenders closing their doors!

@dragon54u (31608)
United States
May 16, 2008 7:59am CST
Here in Ohio, they finally passed a law capping the interest rates that these "payday loan" stores can charge. The new law says that the 391% per year interest is illegal now and caps it at 28%. The lenders are closing now because they say they can't afford to stay in business. I'm sorry for the jobs that will be lost but there are people here that borrowed $100 in an emergency and ended up paying nearly $1000 because they had to keep it revolving, couldn't quite come up with the whole amount when it was due. When I was young, I used pawn shops. They're still around, and a good resource for temporary loans if you have something valuable to pawn. Many people no longer have anything valuable, though. People are responsible for their own actions but when driven by desperation they will go to lenders like those that are closing their doors. The interest rate these people were charging kept people beholden to them with every-increasing fees. There's a lot of other facets to this story like the bad economy, financial ignorance and the like but I'm glad that they're closing. They were like legal loan sharks.
3 responses
@CRSunrise (2964)
• United States
2 Aug 09
We had to go through a few months where we had to borrow money back to back from a payday loan place. I didn't like it, but until we could get out of that hole, there was nothing else we could do. Fortunately, when we got our income tax money this year, we were able to pay them back, and we haven't gone back since. That was back in March, so we've gone "sober" on the payday loans for 4 months. lol I know that's not necessarily a funny thing since there are other people out there in this same kind of situation, but you have to have something to laugh at these days. If you can't laugh at yourself, who can you laugh at?
@dragon54u (31608)
• United States
2 Aug 09
Laughter is the best medicine, especially during hard times. I hope you don't have to use those loan places again! Credit unions are now making small, short term loans with much better terms than the payday loan sharks.
@CRSunrise (2964)
• United States
2 Aug 09
I know that credit unions are a better place to get money borrowed from, but it isn't going to work out to well if you're credit stinks.
• United States
19 Aug 09
Yeah they are looking to put a cap on their interest rates here too. I think we are also one of the few states as well that do not have a cap on those rates. They show a lady on the news who fell victem to one of these places. I'm afriad they survive on peoples despiration to survive and go beyond taking advantage of someones bad situation.
1 person likes this
@dragon54u (31608)
• United States
19 Aug 09
You know, if we taught our kids to save for things rather than buy on credit, a lot of this agonizing endless cycle of debt could be avoided. I saved money when I could and had it when my dog got injured and when I had to rebuild my 85 year old house's chimney. I was ready when my ex filed suit to reduce our divorce settlement. I had two month's worth of food and water in my basement storm room because I made do with last year's clothing and furniture. We need to teach our kids to buy with cash, despite all the media hype!!! Our economy would be so much more healthy!
@luvstochat (6914)
• United States
16 May 08
I wonder if they will pass a law like that here where I live I have never used one of those payday loan services because of the high fee they charge but there are people who are so down on their luck they need the money right now just to put food on the table and that was the only way they could get it was to be charged those ridiculous prices those payday loan places were making a killing off of people who could not afford to pay! I have always been lucky that my mom will loan me money if I need. I am glad something is starting to be done with those places.
1 person likes this
@dragon54u (31608)
• United States
16 May 08
Me, too! Credit Unions are beginning to offer low interest short term loans but many people can't spare the $5 needed to join one and you have to be a member for two months to get one of the loans. Things are so desperate for so many people! I'm glad these financial predators will be closing but I wonder what those people will do who need money fast and have nothing of value to pawn?