Mom Seeking Info. Regarding Loans or Payday Loans

Hi B.!

do NOT do this. I have never done it, but I was watching Suze Orman one night and a woman had called in who had borrowed a smal amount of money (like you aare mentioning) and then something happened, and she couldn't pay the full amount back by the first due date and, long story short, was now WAY over her heaad in debt. THey charge a rediculous amount of interest and, in my opinion, should be illegal.

IT just sounds like a bad idea. I mean, there would be TONS of things you could use the 45 extra dollars on, other than interest fees...

I would strongly caution against using a payday advance loan for anything. The repayment terms and interest rates are not consumer friendly (to say the least). Everything that I have ever read from financial planners or financial advice sights advise people not to use these places! If you belong to a Credit Union they usually have Christmas loans that you can get up to a certain amount (like ###-###-####) dollars that you are able to get quickly and repay without penalty and at a very low interest rate. Best of luck.

I used to work at a bank where I saw many of these types of loans overdraw peoples accounts. Here are a couple of things for you to think about: Do you have plans for your next paycheck (rent, food, car payment, etc)? Do you have $45 that you can toss out into the wind?

My experience has been that it is better to wait until you have the paycheck to spend it.

Hello. This can seem like a quick and easy way to get a little cash on hand but if you pay a $45 fee over one month that is equivalent to a 180% apr!!!!!! I can't even believe that these places are legal! You might as well go to a loan shark- that's really what they are. Except that if you don't pay on time they don't break your legs, they just keep adding up fees until $345 turns into $400, turns into.....
Good luck! and God Bless you!

DON'T DO IT!!!!!!!!!!!!!!!

The government keeps a close eye on these places since they are such rip-offs.

If you don't have the money to buy your kids Christmas gifts then don't get them much. They are 3 and 5 and will hardly notice.

These payday loans become a horrible cycle of borrowing and paying back, borrowing and paying back, etc. The interest rates are horrible and they are rip-offs!

Don't do it! my advice to you is to ( which might be too late now) but before the holidays set aside money in a savings account to use for xmas shopping. We have a savings acoount that we have no access to except to go into the bank and get the money, it prevents us from doing online transfers and running to the atm. than we had a llinit $250. my girls are 2 1/2 and 6. we keep xmas small compared to most and remind the girls the real reason is Christ not getting presents. if you can't afford cash for xmas presents you can't afford them and you should rethink your gift ideas.

Don't do it! The interest rate is usually about 300-400% ... my husband went out of the country back in 2006 when our son was six months old and he was gone for 12 days with travel and so his paycheck was really small, too small to pay bills with so I got a payday loan ... the amount I needed was pretty much my entire paycheck so from May until September (when my school money came in; I'm a part time student as well), I was getting my checks, going to check n go, paying back and in order to buy groceries and pay rent, was borrowing the money again.

Don't do it! That's 15% interest for 1 week (or maybe 2) multiply that by 52 (or 26) to get the annual % rate.

Getting involved with payday loans is a terrible financial decision as is borrowing money for Christmas shopping. Appears they are charging at least 15% interest for a 2 week period and I would not trust that this is the only cost. And as for Christmas shopping, we are very financially secure and our Christmas budget for our 2 1/2 year old is three gifts for a total of $50.00 and homebaked goodies for everybody else.

Try not to spend money you don't have. Save your money for emergencies. Financial security, and role modeling this priority, would be an excellent gift for any family.

Don't do it! I have a rule never to spend money that's not mine. If I don't have the money in my bank account, I don't spend it, period. It's a slippery slope to borrow money in any form and it's a good way to find yourself in debt before you know it. Remember this, if you don't have the money to pay for something today, you probably won't have it next month either when it is time to pay the loan back. Besides, the interest rates on these kinds of loans are usually outrageous. It's just not worth it.

Unless you have some extreme emergency I would advise staying away from payday services such as these. You are much better off putting the charges on a credit card and paying off the entire balance at the end of the month. That way you can get the shopping done early and you won't be charged a penny as long as you pay the entire balance off. My husband's friend started using one of those payday loan places and he is still paying for it - the snowball effect is pretty much standard in those situations.
If shopping online, try looking for discount coupon codes for the particular store before going to the website. You can usually get some amazing deals (10 - 20% off, free shipping). I am not a big fan of going to the malls either!!! Good luck and Merry Christmas!

B.,
Payday loans are about the very worst loan anyone could use. The rates are outrageous!! I can't think of any reason why they would ever be a good idea!
Kids are more understanding than you might think. They really don't need all those toys, especially if you have to get a pay day loan. What they really want is time with you. Take them sledding, skating, build a snow fort, bake cookies, etc. Those kinds of things will mean so much more to them!!

Pay day loans are bad news BIG time! They charge crazy interest amounts. Try hard to stay away from them but If in the future you do ever find yourself in a bind and must do a pay day loan, don't do it over the internet when there are pay day loan establishments on almost every corner now.

M. in Camden, MI

B., the advice from other moms telling you to stay away is priceless. I teach my clients to RUN LIKE THE WIND from payday lenders... who are really predators on the low/middle income who could use extra cash.

Pay cash for your Christmas gifts, and what you can't buy, oh well! -D.

-D. Conner
Financial Coach
connercoaching.com

As a person who has made the mistake of getting involved with these type of loans. Don't do it, it is not worth it. It becomes a vicious cycle that is hard to get out of because you have to borrow money every time to cover your bills and there is a hefty fee, so you will always be short on cash. I regret them to this day and think of the money I could have saved with the fees I had to pay. You still have plenty of time to finish Christmas shopping. Kids remember the time you spent with them more than the gifts they received. Put up some decorations, make Christmas cards and goodies and watch Christmas shows on tv or rent movies.

Haven't done it but don't!!! I have heard the interest on them it very very high.

Ah, legal loan sharking!!!

I would run away from that letter as fast as possible.

Yes, it MAY make things "easy" for the moment. But in the long run it will bite you.

My personal motto is if you can't pay cash you don't need it!!! Those things that you really do need you budget for and maybe (as a last resort only) put on a no intrest credit card to pay off within the zero intrest time period.

I also say that I do not deal with those companies who go door to door or mail out mass mailings just because they do those. When I NEED something (like a roof or windows for my house) I will contact companies myself. Please do not fall for the high pressure sales tactics.

Noone can "prequalify" you for anything unless they have your SSN... Yes, they can say they prequalify you for that amount of loan... But YOUR credit report is what is going to set your intrest rate... If they see that you don't have the expendable cash they will hike up the intrest rate and make it hurt you even more.

If you don't have the cash right now, don't take out a loan to buy your kids toys that will break in a week or they will loose intrest in 6 months. They will not remember WHAT you got them 10 years from now, they will remember the TIME mommy spent with them and WHAT you did together.

I did one of these years ago to get the brakes fixed on my car...terrible idea! I had some other things happen at the same time that actually caused me to bounce my check to the loan people, which they expect because of the clientele that they normally deal with. Just left a terrbile taste in my mouth...never again and I always tell my friends to avoid them too!

It may be too late to save up for this year, but hopefully you can cut back to make it work. My sister in law has gotten into a vicious cycle with her kids. When they could afford it they bought their kids extavagant gifts and now they feel like they have to do better every year.

Red Flags all over this. Are you sure what the repayment fee is? processing fee? Paperwork fee? What is the percentage rate of charging? Your own credit card could be lower, check with your bank they may give you a short term loan and ask them if the company is legitimate. I personally feel if I didn't solicit them, them then I am extremely skeptical.

I don't think I would do it. The interest rate on these types of loans are pretty high. They have also done a number of new stories on them - on how they get people hooked b/c they advance them their $, but then they can't pay it all back, so they offer them another loan and it just makes the situation worse.

B. ~
I agree with the other writers ... don't do it!
These tend to have a high interest rate, so they're not worth it. And it ends up being a cycle...you keep borrowing, paying back some, owe more because of the interest, etc. It can go on for a long time.
D.

These loans target people who can't pay them back in full, so they can make a killing off of the interest. If you're able to pay it back by the next pay day, then its probably fine. Take time to read the fine print though just to be sure. People who can't pay it all back on time can spend months trying to pay it off.