Payday Loan Interest

Birmingham City Council again delays vote on payday loan, title pawn moratorium

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BIRMINGHAM, Ala. -- The Birmingham City Council this afternoon again delayed action on a proposed moratorium on payday loan and title pawn businesses.

The three-week delay comes after a lengthy debate and public hearing and months after the original ordinance was proposed.

More than a dozen people spoke in favor of the restrictions, while another crowd stood in opposition.

Councilwoman Lashunda Scales, who sponsored the ordinance, said the intent was to curb the proliferation of the businesses, which she said stifle other commercial development and prey on city residents.

Scales called another delay unnecessary.

"We did everything that we were asked to do," she said. The ordinance had been revised by city attorneys and had gone through the committee process.

But Scales ultimately did vote with the majority in its 7-2 vote to delay consideration of the ordinance.

Among the divided audience members were payday loan customers, some of whom called the businesses useful.

"I am in dire straits, as they say," said Joyce Vaughn of Birmingham. "I'm like everyone else, strapped for cash. I had nowhere to go. This was my only option."

But other former customers said the businesses exploit their customers with high interest rates that often trap people into debts they can never pay off.

A representative of AARP also spoke to the council, urging the new rules.

"It is predatory lending and it's unscrupulous," said Dr. Jack Bradford. "I'm talking about getting into people's pockets who can ill afford it."

I used to work for one of these businesses, this company also cashes checks for a certain % rate. Once you start one of these it is really hard to break the cycle. For awhile the State of Alabama was regulating them to where you could not have more than $500 out TOTAL for all places combined. I am not sure if they are still controlling that, but I remember having to tell people that they could not rewrite the loan because they had other loans out totaling more than that amount. You could see the desparation on the faces of people because they were having to rob Paul to pay Peter. It was heart breaking & I had to get out of that business because it will steal your soul...

Low Interest Payday Loans: There's No Such Thing | freeay.com

Are you looking for low interest payday loans? If so, you will probably be looking for a long time because payday loans are notorious for their outrageous interest rates. Payday loans were created to fill the need for emergency cash and people in that situation often can’t afford to be concerned with the interest rates on the loan. They are in need of the money, no matter how much it will cost to repay it.

As you can imagine, since there is really no such thing as low interest payday loans, people often get into a financial mess by taking out payday loans. The payday loan has to be repaid in full in a very short amount of time, usually two to four weeks. And since these are not low interest payday loans, there is an additional fee tacked on of around 10%.

Payday loans work like this; you provide the proof to the payday loan company of your identification, banking information, and employment history and then the payday loan company will determine how much money you can borrow. The amount will vary depending upon your income and could be anywhere from $50 to $1000.

The reason people are attracted to these types of payday loans is because there is no credit check and they get the cash money in just a matter of minutes. The problem with the payday loan is that it must be paid back in full, plus interest, on the date of your next payday, and since these are not low interest pay day loans, the fees add up alarmingly fast.

That is very difficult for someone who is in financial distress so what happens to a lot of people is that when payday comes and they pay back the loan, they don’t have any money left over so they have to take out another payday loan and it creates a vicious cycle that is hard to break out of. This happens in part because these are not low interest payday loans.

Legally, a payday loan cannot be renewed; it has to be paid off and then can be taken out again in 24 hours. But by taking it out again in 24 hours which many people are forced to do, it makes the interest on the loan skyrocket.

@ Finally Q = Quickquid (never get a payday loan as interest rate is 1736% APR) - that one's not a joke! xx

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