A Texas Pastor Takes on Payday Predators
Here’s a bit of Chaddick’s story:
…the family would be able to live within their means except for one item of debt that was dragging them down: a $700 payday loan they had taken out roughly four months earlier to help with a rent payment on their home. The terms of the loan: $200 every two weeks was automatically deducted from the husband’s bank account and timed with the deposit of his paycheck. This $200 did not reduce the original amount of the loan. It merely allowed for the $700 principal to roll-over until the next pay-period. In the course of the four months the family had maintained this loan, they had rolled the principal over nine times—at a cost of $1,800. Had they continued to pay on the loan for a year, they would have paid $5,200, for an effective APR of over 740%!
Chaddick goes on to detail how payday products are set up to ensure the consumer fails, thus earning the lender additional money through fees.
Read more about this inspiring (and difficult) fight against payday predators in Texas.
For more on the fight against payday loan sharks, follow @TNCitizenAction