It’s sad how lending companies often target those who can least afford it with easy loans and crazy interest rates.
A torrid example: Cash Call (a company that’s been advertising heavily in my area). In the state of Washington, they offer the following rates for loans:
HOLY CRAP!! On the $2,600 loan (of which, you actually get $2,525 because they subtract the $75 origination fee before paying you a dime), you end up paying back $9095.10 over 3 and a half years.
Even the 29.26% rate over 2 times as high as my worst credit card’s interest rate (and that’s for Exceptionally qualified applicants only) .
Of course, anyone with good credit would never use a service like this. This is just an attempt to extort money from people who have credit problems, offering them a loan with insane terms.
Of course, if you think that’s bad…. you should look at what the payday loan company’s charge. For example, this was pulled from MoneyTree’s website (again, rates for Washington State based on a 14 day loan)
This should be illegal.
Sadly… there are about 15 payday loan franchises within a 5 minute drive from my house, so business must be booming for them (as they suck the life out of those who can’t afford it).