Wisconsin Debt Counselor Discusses Payday Loans
By J.J. CameronPayday Loan Writer
A record number of people in Wisconsin are being lured in by the promise of fast and easy cash.
To what degree? These days payday advance lending is a $40 billions business. Some money managers, however, say such loans can give consumers a big headache.
Financial Adviser Lynn Knaack, for instance, says the lure of quick and easy cash is hard to ignore when bills are due.
"Your in that vicious circle where you live paycheck to paycheck so primarily they think that its okay they'll pay it off later," Knaack said.
Knaack works for Money Managers, a debt counseling service. She says many of her clients use cash advance loan providers and she sees that as a big problem, referring to them as a "legal loan shark."
Nevertheless, their popularity and number is growing, outpacing both Starbucks and McDonald's. There are more than 22,000 nationwide, with ads all over TV and radio.
Knaack says one of her clients learned that firsthand the trouble that can be associated with a regular or a faxless payday loan.
"She took out a loan for three-hundred, well in a month's time she'll owe 60 dollars on that," Knaack said.
And that's not even the highest rate.
Pete Peterson, meanwhile, is the president of US Bank in Eau Claire. He actually says some critics of fast cash advance companies are being unfair.
"They're there obviously for a reason, they're there because there is apparently a need for some people to use them, so I think that it's a viable business," Peterson said.
A viable business Knaack admits is not all bad. She says many cash advance lenders are willing to negotiate with her clients. But for those deep in debt, that's not always enough.
As a result, Knaack says the trick is to start small.
"You need to take it a step at a time and do what you can, even if it's just a little bit, don't give up," she said.
