Reputable Payday Loan Companies

In my mind, the phrase “reputable payday loan companies” ranks right up there with “honest politician”, because I’m not sure that either one of them really exist. We have all heard the nightmare stories of people being caught up in the payday loan treadmill, to the point where their situation truly seems hopeless. I was reading the other day about a lady who took out a $3,000 payday loan, paid back in installments that were drafted from her checking account (with exorbitant interest of course), and the mind-boggling thing about it was that she ended up paying it back over the course of about 10 years, at a final cost of over $30,000. Yep, you read that right—thirty-freakin-THOUSAND dollars. In my mind, some of these “Money Til Payday” places need to be investigated and/or shut down completely for their predatory lending practices. The sad thing about it is that since the poor hardly ever have a voice in politics or in any type of regulatory circles, this type of systematic financial rape goes on all the time, largely unchecked. As all of us know, most of the time these companies target lower-income customers and are usually planted in lower-income neighborhoods. I mean, think about it: When was the last time you’ve been to the section of town where the million-dollar homes are, and seen a “Payday Loans” store anywhere nearby? Or a pawn shop? Or a “check cashing” outfit? No, for the most part, it’s a system designed to target the poor, and it is designed to keep them poor. This really infuriates me when I take the time to think about it. Financial rape and predatory lending are despicable practices in my mind, and I’m amazed that we live in a country where people can get away with doing things like that, but then again, we all know that at the end of the day, it’s all about money.

Some would try to highlight the fact that these institutions provide some benefit to people because of the fact that they do not check your credit score before they decide to lend to you. In fact, for most payday loan companies, all you need is proof of income from a job for them to lend to you, and more often than not, they require either post-dated checks from you to pay back the loan in installments, or they require your banking information so that they can perform an electronic ACH withdrawal of the installment payment on the day you get paid. This sounds great, as far as if you’re looking for a way to obtain some quick cash without having to jump through all of the usual hoops, but please be aware, these people are not your friends. The average annual interest rate on a payday loan is 400%. Yup, you read that right—four-HUNDRED percent. This means that if you obtain a loan for $500, at the end of it all, you’re going to pay out about $2,000 to the payday lending company in interest and fees. These companies are basically cash cows for their owners (and the large banks that back them), and unfortunately, the clients are plenty. So in my mind, finding a reputable payday lending company is like trying to find a mechanic only does the work you requested him to do without “finding” extra problems with your car. Basically, it’s like finding a needle in a haystack…in the dark…blindfolded. I’m honestly not sure if any reputable payday loan companies even exist. Some have believed that Money Mutual is probably reputable because of good ol’ Montel, but I say proceed with caution, not just with Money Mutual but with ALL payday lending firms, and ALWAYS read the fine print…sometimes it gets really ugly.