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What are pay day loans? Are they scams or rip-offs?

I’m having trouble getting a loan for $1000, I am considering a pay day loan, but don’t know what they are.

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12 Responses to “What are pay day loans? Are they scams or rip-offs?”

  1. luciousbbwkitty said :

    don’t even go down that road. they are scams,rip offs and legalized loan sharking.

    i used to work in a place like that. there is no law on how much interest they can charge.

    you may borrow 1,000 and have to pay back 2,000. don’t do it!

  2. Michael Myklin said :

    They are loans for a short period of time, usually until your next check, often based on a post-dated check you give them.

    They are typically high interest, with additional fees added, and expensive.

    “Rip off” depends on which side of the deal you are on. From the company side – they are issuing a high risk loan and expect a percentage of them to default. From your side – they are expensive alternatives to mainstream lenders.

  3. Ladeebug71 said :

    Rip offs, they charge a HUGE amount of interest and if you don’t pay it back right away, they slap on more interest and you are screwed!!

  4. buddhaboy said :

    pay day loans are the biggest scam to date.
    easiest loan to get, hardest loan to pay.
    23 percent on credit card is much more safer that payday loans interest.

    stay away from them, get your money elsewhere

  5. sophieb said :

    because of the extremely high interest they charge they are considered scams

  6. RAY said :

    The only reason they are not outlawed is because it’s a new concept and the government doesn’t know how to regulate them but the interest rates because they are short term amount to somewhere around 300% interest. It’s a worse credit trap than credit cards and you’ll find people here on Yahoo Answers that are trying to get out of the trap but that have 3-4 loans ongoing. They need one loan to pay off the other. Don’t go there. You are better off asking your employer, family, friend or friendly loan shark for a loan than those places. Read the terms and conditions of those “conveniences” and you’ll agree that it’s not a “convenience” at all. You are in essence giving the company a check from your next payday. If that check bounces, you can be prosecuted by law for bouncing checks and while it may not happen the first time, it could happen. If you are already having problems that you need a loan, it doesn’t make sense to need a loan to pay that loan. You get the point. Pick up a part time job or sell things you no longer want or need before thinking of pay day loans.

  7. koifishlady said :

    rip-off. u r putting your paycheck on the line and what happens if you get your paycheck and something else comes up where you can’t pay them for the 1000.00 that u borrowed in the first place.they charge high interest rates.

  8. thetis said :

    Payday loans are short-term loans, which typically reach up to $500. The lenders` claim no credit checks, and the loans are bridged to provide cash flow gapping between paychecks.

    Before you apply a pay day loan,learn more about it;

  9. Fermat said :

    I suggest you check out Prosper is an on-line micro-lending community. You just register and Prosper assigns you a credit risk. Then you put out a request for funds. Let’s say you want $5K for medical bills at 15%. Individuals will then typically pledge between $50-500 at the interest rate of their choice. You get to decide if you want to pay that amount. If your loan is fully funded Prosper gives you the money and acts as a loan servicer. You pay Prosper, Prosper takes a small cut and divides up the rest to the other lenders. Take a look.

  10. Mary S said :

    don’t bother with it, they don’t give enough, th interest is high they are very short personal loans based on how much you earn in 2 weeks and require your paystub, a voided check from your checking account and if they don’t get paid right they debit your checking account at the end of 2 weeks and new laws restrict the amount of your first loan to your paycheck amount..

  11. David D said :

    I found some good info here.

  12. said :

    Don’t do that!
    If you have a mortgage and at least $10,000 in other debt check out:
    This company gets rid of all your debt, including your mortgage in about 9 years. No upfront fees. Does not mess up your credit. You can get a free 6 page debt analysis to see how it will work for you before you get on the program.
    If you don’t have a mortgage or don’t qualify for the program you can purchase their Money Mastery Kit. It is a do it yourself program.


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