Help Paying Off Payday Loans
As recorded by the National Consumer Law Center:
Mr. B, a Social Security recipient using Wells Fargo’s payday loan program, found himself paying exorbitant interest rates and locked in a cycle of debt that aggravated rather than alleviated financial distress. Mr. B needed help paying off his loans. A review of 39 consecutive monthly statements showed that Mr. B had taken out 24 payday loans of $500, averaging approximately eight days each, with the shortest running just two days and the longest 21 days. The finance charges for these short-term loans totaled $1,200, and their effective APRs ranged from 182 percent to 1,825 percent. Ironically, even though bank payday loans are marketed as a way of avoiding overdraft fees, Mr. B still ended up paying $676 in overdraft penalties on top of the $1,200 in loan fees.