10 Frightening Facts on Payday Loans

Happy Halloween from TLC Loans! As Halloween spending hits an all-time high ($9B – an average of $86.79 per person), many people are also dealing with some pretty scary circumstances.

 

 

SPOILER ALERT! All the dangers you’ve heard about payday loans are true.

What are payday loans?

Payday loans are a short-term, high-interest loan, generally for $500 or less, that’s designed to bridge the gap between paychecks. The quick cash is nice, but you may wind up getting more than you bargained for. The cost of the loan (finance charge) may range from $10 to $30 for every $100 borrowed.

 

A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of between 400% and 5,000%! (By comparison, an unsecured personal loan from Total Loan Company’s interest rates are 200% to 4,800% lower than payday lenders and are highly competitive with other installment lenders.)

 

Here are ten scary financial facts (via Payday Lending Facts and Business Insider) on payday loans that will haunt you…

  • Frightening Fact #1 – 80% of payday loans are rolled over into new loans within 14 days.
  • Frightening Fact #2 – 20% of new payday loans cost the borrowers more than the amount borrowed.
  • Frightening Fact #3 – 22% of monthly borrowers, “largely people whose income is from Social Security”, remain in debt for an entire year.
  • Frightening Fact #4 – 60% of payday loans are renewed seven or more times in a row, typically adding a 15% fee for every renewal.
  • Frightening Fact #5 – Most borrowers owe payday lenders for five months out of the year and typically end up paying $800 for a $300 loan.
  • Frightening Fact #6 – Half of all borrowers take out at least 10 sequential loans.
  • Frightening Fact #7 – An average payday loan claims a third of a borrower’s next pay check.
  • Frightening Fact #8 – The rates charged on payday loans can be up to 35 times those charged on credit card loans and 80 times the rates charged on home mortgages and auto loans. .
  • Frightening Fact #9 – They’re known to harass borrowers at work, take money directly out of their bank accounts and even threaten to have them arrested (they’ve also been sued multiple times).
  • Frightening Fact #10 – There are nearly as many payday storefronts in America as McDonald’s and Starbucks!

Beating the Bad Guys

Some people don’t see a way out of the tunnel of debt. But there is still hope yet! TLC Loans are designed to get you back on your feet.

 

If you’re caught in the vicious cycle of payday loans and are struggling to get out, it’s time to take control of your finances with a TLC unsecured personal loan. Short-term multi-pay loans are a perfect way to respond to unexpected emergencies such as car repairs, medical expenses, travel.. or debt!

 

Our team at TLC Loans specializes in debt relief and we’re ready to help you. So get rid of those payday greedy ghouls and contact us today!

 

And don’t forget – Just say “NO” to payday loans with TLC.