For those who pay off the loan with their next paycheck, a payday loan can be a boon
Here’s how problems can begin: a customer needs extra money and takes out a typical $300 advance on their paycheck along with 15% interest at $45. Over time, the $45 every two weeks adds up and customers who stay in this cycle for a year find the annual interest rate is over 300% and they have paid $1170 in interest for the original $300 loan.
Lyndsey Medsker, spokesperson the Community Financial Services Association (CFSA) told CBS News that in response to such criticisms, their member companies now offer extended payment plans.
„So any members of our association are required to offer – if you borrow $300 and two weeks later you find that you cannot pay it back, you’re required to offer an extended payment plan to that customer to give them an additional eight weeks to pay it back at no charge,“ Medsker said.
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CBS News called fifty payday stores across the country whose companies are members of CFSA to ask if they offered an extended payment plan.
One Advance America employee in Bastrop, Texas said, „No, the way it works here is I’m not supposed to discuss this over the phone. I’m supposed to try and get you to come in the store.“
The Advance America website states: „If a customer is unable to pay back an advance within the arranged timeframe, Advance America offers an Extended Payment Plan to allow customers a longer time period to repay at no additional charge.“
But at the Advance America store in Ames, Iowa an employee said, „No, we don’t really do payment plans. Weiterlesen „For those who pay off the loan with their next paycheck, a payday loan can be a boon“ →