Here's a riddle for you:
Q: When are payday loan businesses like banks?
A: When they're useless!
Ten years ago I found myself in a situation where I needed a small loan. It wasn't lot, about $1200. I was in college and landed a job that required me to commute 100 miles a day. Living in Los Angeles at the time, there was absolutely no way means of public transportation. I found a decent car from a rather fashionable chap in West Hollywood that I could've paid off with my first biweekly salary. However, I didn't currently have a job and the bank wouldn't loan me the money since I didn't have a paystub yet. And I wouldn't get a paystub if I didn't get that car, so it was a catch-22 situation.
Payday loan businesses, also called check cashing or cash advance businesses work in a similar manner. They offer high-interest loans to people who can't get a loan elsewhere solely based on their ability to get the next pay check. No pay stub usually means no loan.
Luckily, my college's credit union came through and they gave me the loan, although it was at a whopping 18%. So are credit unions like payday loan businesses, or are the payday loan businesses like credit unions?
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