Complaint Review: Cash Choice/Budgetline Cash Advance

You pay $15 to borrow $100 for 2 weeks. You pay back the $115 in two weeks or the loan is rolled over with more fees. Fees, schmees, whatever. Interest is what you pay to use someone elses money, AKA a fee.

People who get these fees are ''too close to the line'' for one reason or another. If they were short $100 this week they will probably STILL be short $100 two weeks later.

I heard on the radio today about a Republican Senator getting $2500 from the payday industry for a 'party' sponsored by that senator.

You pay $15 to borrow $100 for 2 weeks. You pay back the $115 in two weeks or the loan is rolled over with more fees. Fees, schmees, whatever. Interest is what you pay to use someone elses money, AKA a fee.

People who get these fees are ''too close to the line'' for one reason or another. If they were short $100 this week they will probably STILL be short $100 two weeks later.

I heard on the radio today about a Republican Senator getting $2500 from the payday industry for a 'party' sponsored by that senator.

i am involved in the collection end of the payday advance industry (a third party collection agency), and i have extensive experience dealing with both payday lenders AND their clients. there are some misconceptions out there that the banking industry has spent millions and millions to spread, and "consumer advocates" have been only too happy to jump onboard and further these bits of half-truths.

here is the whole story: payday advances are not evil...the people that USE themjust simply need to make sure they don't get into an arrangement that they cannot afford. every lender posts notices that these loans are for the purpose of a one-time solution to a cash flow problem, and advise strongly to pay them back in full when the date comes due.

furthermore, when the media refers to these loans as "high-interest" short-term loans, listing the APR as "proof," they are misleading the public. quick lesson: APR refers to INTEREST RATES. payday lends CHARGE NO INTEREST. instead, they charge FLAT FEES according to the amount loaned. for instance, it is common to see a $15 fee for a $100 loan...the problem is that the BANK LOBBY got lawmakers to FORCE payday lenders (a natural enemy to the bankers) to list these fees CONVERTED TO APRs so as to scare the public off. problem is, INTEREST is something that ACCRUES over time, while payday loan fees are ONE-TIME fees that do not recur. granted, a person who takes out loan after loan will eventually pay a lot of money in fees...but nobody forces anybody to take out more than one loan.

i understand the desire of certain cultural "elites" in this country to babysit the less affluent by trying to enact legislation to remove the option of payday loans as an alternative to paying HUGE overdraft fees in their BANKS. notice that banks are NOT required to list as APR these fees, even though they occur EVERY TIME a debit occurs below what the cash in the account covers...it's common to see a $25 fee for a $15 dollar debit...AND GET THIS, PEOPLE--do you know it is POLICY for most banks to HONOR the checks of higher dollar amounts ahead of smaller amounts that may even come in BEFORE the higher amount checks...to FORCE the account into overdraft protection for EVERY check of smaller amounts...one overdraft fee PER ITEM...it is not uncommon to see banks charging as many as 3, 4, 5, even MORE overdraft fees for checks that IN TOTAL never reach $100, rather than honoring all the smaller amounts and then charging the overdraft fee for the larger amount a single time. WOW, right?

with that in mind, i find it difficult to support the idea that payday advances are even CLOSE to as evil a product as regular old CHECKING ACCOUNTS with overdraft "protection." the fact is, banks do not want the competition, so if they can manage to completely WIPE OUT payday loans, people of medium to lower incomes will have little choice but to submit to the banks' exhorbitant fees. nobody will ever convince me that the banks are in the right. while i agree that the fees for payday advances are pretty high, i know that they offer a service (short term, small balance loans) that are otherwise unavailable to people with less than perfect credit or no desire to submit to ridiculous overdraft fees.

i say GO AHEAD and get your payday loans, but PLEASE just be responsible to yourself and your family and do NOT get caught up in a cycle of taking out loan after loan after loan...you will suffer if you do. if you use it in a manner in which it is intended, you can help avoid difficult situations like having utilities cut off or late car payments...as long as you understand that you CANNOT SPEND all of your check...you must leave enough in your account to cover that loan, so you can avoid trouble.

good luck,

pablo

PayDay loans have largely taken over the loansharking business from the mafia...only now loansharking is legal and has been "corporatized." The mushrooming of payday loans across this land is a testament to how "We the People" have had our government taken over by business and corporate interests...It's a "Pay to Play" system now...finance companies that buy off politicians are free to to what they want.