PDL Companies AKA Loan Sharks

I am going to make a post here with my opinions on the Payday Loan industry. Most people aren't going to agree with me, I'm sure. But, I am speaking as someone with experience with these companies.

The main argument seems to be that with the passing of HB 281 Ohioans have been robbed of a viable source of credit.

Let's look at something here...

They claim that 90% of people who take PDLs are not repeat customers... or only take out one and pay it right back.

Where did they come up with this? This must be "research" from the actual PDL companies trying to save face. But let's be real....

Most people take out payday loans in financial crisis. And during a financial crisis all you think about is making ends meet. For instance, we got trapped in them because our car's rack and pinion was shot. We NEEDED our car, with two kids, and hubby needing to get to and from work (and before you argue public transportation, we do not have 24/7 reliable public transportation in this county). So we took out 1200 in payday loans thinking "we can pay these off". We took 300 from 4 different locations.

These quickly grew to 600 a piece, because between having to pay off the 15 dollars per 100 that we borrowed, the fees that we accrued made it impossible to not have to keep borrowing more and more to pay off the first.

Now let's do the math:

600+ 110 fee (this includes tax on top of the 90 dollar payback fee)=710 dollars.

710 x 4=$2810

This is what we paid every month. Essentially we were paying $440 a month to borrow no money at all (because you pay off what you borrowed up front). $440 a month to BREAK EVEN.

That is more than my car payment and insurance. If you figure you end up actually borrowing 600 a month x 12= $7200 a year.

But!

The fees are $440/mo x 12=$5280 a year.

But really, are you borrowing 600 a month? Think of it this way.

I take out 600 from #1- I pay back 710. I am behind 110. So I take 600 out from #2 and pay it off... 710- I'm now behind 220. Number 3- another 600- 710 to pay off... I'm down 330... and so on. So with 4 of them, I'm not really getting any extra money, just fees of 440 coming out of my income.

So in reality, I am paying $5280 per year for 2400 dollars. Let's figure out that percentage rate shall we?

220% annual percentage rate.

That's where they get their rates from- from repeat borrowers, from the MAJORITY of people who use these services. Ever notice where these companies are located? Lower-class areas. They prey on people who are desperate. Sure, you can argue responsibility in borrowing money- but you know what? People forget about responsibility in borrowing when it comes down to having a car or feeding their kids or paying rent.

Personally, I think they should all be outlawed. Why? Because they prey on people! The debt consolidation company we are working with said they work with PDLs more often than ANY OTHER INDUSTRY when it comes to people's debt. We have to still pay 450 a month JUST TO PAY OFF what we have borrowed, and we won't have it paid off until December! That's a huge chunk of someone's income. The PDL companies are not interested in working with you to pay off your debt. They want their money right then and there. We were left with no other option- and even with PDLs we still struggle to make ends meet. Are they a Godsend? Hell fucking no they aren't, and don't let any asshole who's never borrowed from one convince you that they are.

What needs to be done is more options to people with bad credit to get credit, but the bottom line is... we need to take care of our own people. People who work their asses off everyday and their jobs get sent overseas and they are left with nothing to fall back on but a minimum wage job at McD's. That's the problem with society- we are all dispensible. And guess what, righties? YOUR party is mostly responsible. You can thank trickle-down economics for that one.

So while people bitch about HB 281 passing, I sit and cry as I watch the middle class disappear and the poorer get poorer in the hands of the same people who cry foul that yet another loan sharking industry is put out of business. I wonder what all the people in the states that don't allow payday loans do when times get tough? Amazing that most have economies better than Ohio's. Hmmm... how interesting.