News: FYI:  We have three websites in our inventory: onnidan.com - news, recaps, blogs, black college sports page | onnidan1.com - this forum  | onnidan2.com - composite hbcu football schedule

Author Topic: Missouri Man Paid $50,000 in Interest After Taking $2,500 in Payday Loans  (Read 65 times)

Offline y04185

  • Assistant GM
  • *****
  • Posts: 66,848
  • Karma: +76/-764
  • Assistant GM
    • View Profile
Read more

Small payday loans are touted as quick, short-term access to money, but people like Elliott Clark of Kansas City, Missouri, call them "debt traps."

A retired and disabled Marine, Clark still has a hard time talking about the more than 5 years in which he says he struggled to pay $50,000 in interest which began with $2,500 of these loans, sometimes called "cash advances" or "check loans."

"It was hard for me to talk about it without breaking down in tears," Clark told ABC News. "If you're a man you take care of your family. If I had another choice, I would have taken it. I wouldn't have gotten in that situation at that time."

Clark's road to the payday loans began in 2003, when his wife slipped on ice and broke her ankle, which required surgery to restructure it. His wife, a retail employee, was unable to work for several months, Clark said, and was ineligible for benefits from her employer. With two daughters to help support through college, Clark couldn't pay his wife's medical bills, which he said totaled $26,000. He turned to his family and friends, but they didn't have the money to lend him.

"I tried banks and credit unions. My credit was 'fair,' but it wasn't enough to get a large sum of money to pay the money," he said, noting his credit score of 610. A credit score of more than 750 is typically described as "excellent."

Clark said he eventually took out five $500 loans from local storefront lenders, and he paid interest every two weeks. Every two weeks, $475 in interest was due ($95 from each loan) and he would often take out new loans to cover the old ones.
Fayetteville State by choice. Bronco by the Grace of GOD.

Offline aggiejazz

  • Assistant GM
  • *****
  • Posts: 939
  • Karma: +0/-0
    • View Profile
A few years ago, I advised a friend to get out of an endless cycle of payday loans that had been going on for months.  She did not understand compound interest and she assumed incorrectly that she was being helped by paying off the loan and then get another loan of the same amount that she paid the "loan shark" company that was operating legally in VA.

I told her don't get another loan and showed her how to pay off the loan and it didn't cause any financial hardship.  She was done with the loan in about 6 weeks.

I also got my cousin to stop getting those stupid tax refund loans.  I told her "you really can't wait four weeks to get your refund in February?  Come on!"  I kind of embarrassed her into not doing it anymore but it took a couple of years.  My cousin told me she was paying off Christmas bills with the tax refund loan.  Thank goodness she stopped or she would have been one of those black women standing outside one of those tax preparer offices wondering where her stimulus check is?
« Last Edit: May 24, 2020, 06:30:19 PM by aggiejazz »

Offline Maroon and Gray

  • Assistant GM
  • *****
  • Posts: 28,782
  • Karma: +223/-109
  • Head Coach
    • View Profile
A few years ago, I advised a friend to get out of an endless cycle of payday loans that had been going on for months.  She did not understand compound interest and she assumed incorrectly that she was being helped by only paying off the loan and then getting another loan of the same amount that she paid the "loan shark" company that was operating legally in VA.

I told don't get another loan and showed her to pay off the loan and it didn't cause any financial hardship.  She was done with load in about 6 weeks.

I also got my cousin to stop getting those stupid tax refund loans.  I told her "you really can't wait four weeks to get your refund in February?  Come on!"  I kind of embarrass her into not doing it anymore but it took a couple of years.  My cousin told me she was paying off Christmas spending with the tax refund loan.  She would have been one of those black women standing outside one of those tax preparer offices wondering where her stimulus check is?

basic personal finance should be a mandatory course in high school. Some folk will have the sense of learning this stuff on their own.  Many others will not and perhaps a high school course will give them that information for later in life.

 

Onnidan's HBCUSports Logo
News

 

Support Our Efforts

Support our efforts

With all the divisive rhetoric on social media outlets like Facebook and Twitter, websites such as ours, especially message boards, are under the watchful eye of the Internet giants. And those giants are coming down hard on sites like this one due to the perception of the need for better "oversight".

We recognize the cultural conflict that exists and over the past few months we've been accused of allowing content in posts/threads that supposedly violates some advertiser's policies. Those threads weren’t an issue in the past, but for some reason, they are an issue now. And we are being penalized (financially) because of it.

 

As a result we are coming to you directly for your financial support>

 

Please consider supporting our efforts to foster free and open discussion of current issues as they relate to the topics you are interested in. You can use the Cash App and contribute to $onnidan, or process your donation through PayPal below.

=OW= 


 

 

Powered by EzPortal