Payday Loans VS. Loan Sharks
The Huffington Post recently had an article about Payday lenders leaving Arizona. In their usual left leaning slant the article was cheering about these companies were leaving the state, and how awful they were preying on people to take out loans. Which got me thinking about what exactly is predatory lending anyway? Is the lender stalking you, forcing you to sign that loan for a paycheck you don’t have yet? Are they putting the proverbial gun to the borrower’s head making them take out the loan? Common sense says of course not. It should go without saying getting a payday loan is bad money advice! If I must resort to using payday loans to support my existing lifestyle, I need to cut back or make additional income. It’s not uncommon for a payday loan’s effective APY to be over 40%! Some people do use these loans because of emergency purposes, which in my opinion is fine, and was the original purpose of these loans. Is it the fault of the lender that the individual keeps coming back to use their service?
