Payday Lending--Hurting Texas Families
Author:
Don Baylor /(512) 320-0222 x 108
February 22, 2008
Payday Lending--Hurting Texas Families >>
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It’s the American Dream that if you work hard you get ahead. But with the high cost of living these days, that isn’t always the case. Sometimes families run short of cash and turn to payday loans—short-term loans that give Texans a cash advance on their paychecks, Social Security payments, or veteran’s benefits. Millions of families use these loans when they are short of cash, but the high cost outweighs the convenience. Interest rates start at 400 percent APR and can surpass 1,000 percent, and it is typical for a worker to pay $180 in interest on a 10-day, $700 loan. More often than not, the individual is unable to repay the full amount within the short repayment period, and the debt balloons. In fact, most payday lending volume comes from individuals forced by the cost of the original loan to take out another and another. We’ve seen the devastating impact of subprime lending on the economy. But what do payday loans cost families and communities in Texas?