These short term lenders are the worst example of predatory lending, outside of loan sharks who will break your legs if
You Miss a payment, that I can think of. I might argue that loan sharks are more honest, since they tend to make it pretty clear what the consequences of nonpayment are.
Getting out of a short term
problem (that may or may not be overstated) by placing yourself into a definite long term problem is simply a path to
financial slavery.
Annual percentage rates (interest + disguised fees) average 391% on payday loans. Anyone who actually believes that this is a way to solve anything but a
TRUE life or death situation, is fooling themselves. You don't need an MBA to figure this out.
Here's what I can tell you with full faith and confidence: if you're an investor (without a conscious) and you want to make SERIOUS returns, with minimal overall risk, buy into an LLC that engages in payday lending. Your money will be lent out to desperate, uninformed people who know little about the law or finance, who have probably made some seriously poor financial and life decisions over a long period of time (so being sodomized by "money men" is what they see as normal), who you can take advantage of (legally and illegally) if/when they don't repay the entire principal balance (not that most of them ever will), who you can trap in a never ending debt repayment cycle (like a mouse on a wheel inside a cage), who you can garnishee their wages to earn even more of your money back because you can make up legal and servicing fees, where payments are applied to interest first and you can keep the principal balance rolling in place forever, where the average one is afraid of a courtroom, so when you sue them, they won't show up for court and you'll automatically get a default judgment... Oh man, it just goes on & on.
For a good part of my adult life, I had an "anything for a buck" mentality and you could say that (at least in the go-go 80s) I was
morally challenged. But at my worst, even I didn't take up this sort of predatory investing. So while I didn't play the game, I do know very well how it works.
So yeah, if you own a
buy here/pay here used car lot, where you sell auction junkers to unwed mothers and old people, charging them ridiculous fees, meaningless warranties and 25% annual interest on 3 year loans, and now you want to make
even higher returns on your dollars, ya definitely need to get into the payday lending
biznass. Two weeks after you "solve" their initial problem by floating them a loan, they'll have five more problems that'll need solving - and even less money on hand to solve them.
Garonteed. :thumbsup: A lawyer that I knew, who was in one of these schemes, told a mutual acquaintance that if God didn't mean for chickens to get plucked, He wouldn't have given them feathers. If you needed money to pay him, he'd direct you to the "friendly & helpful" payday lending business that he (secretly) owned. So you just have to have that attitude that they're meant to be taken advantage of... then you can sleep well at night. He's dead now. I often wonder what corner of Hell he occupies.
A lot about the CFPB is B.S. I don't disagree with that. But anything that's done to eliminate these cockroaches of the financial industry is a good thing, IMO. To say that these shylocks and blood suckers do anybody any real good is like saying that Jeffrey Epstein helped lots of underaged girls buy school supplies by paying them to rub & tug him while standing there in their training bras.
