Monday, December 18, 2006

Walk into any payday loan company office and you’re likely to find that no two customers are the same - there’s a mix of races, incomes, education levels and family situations.
However, one thing many payday loan borrowers have in common is the lack of an emergency fund. And many of those borrowers consider their local payday loan office a handy source of quick emergency cash, reports The Sale Lake Tribune.

Financial experts may say that everyone should have three months of living expenses stashed away in a savings account for emergencies. But saving that much money is difficult, if not impossible, for a number of Utahns.

“When you’re living from paycheck to paycheck, there’s no extra money for emergencies,” said Linda Browning, a payday cash loan borrower who lives in the Ogden area.
Just a few months ago, Browning’s daughter, a single mother living in Boise, Idaho, was in a car accident. Browning said she had to drive there to care for her two grandchildren, while her daughter was in the hospital.
Browning’s tight budget made the cost of gasoline a strain, and she had to take uncompensated time off from work, which affected finances even further.
Sometimes, she said feels embarrassed that she uses payday loans and doesn’t like to tell other people she uses them. In fact, getting other borrowers to talk on the record was difficult.

The use of payday loans: Karen Burton of West Valley City, who has two sons in the military, also knows what it is like to be on a tight budget.

Her 24-year-old son, Jason Rodriguez, is in the Army and returned from Iraq in August. He uses payday advance loans, and so does another son, 20-year-old Steven Rodriguez, who is in the Marines and is poised to deploy in January.
She said her family has had a good experience with a faxless cash advance loan provider Check City, which has gone so far as to forgive some of the family’s debts after learning of her sons’ deployment. The company, which matches public donations to military families on a dollar-for-dollar basis, also provided the family some extra financial assistance.
But before going to Check City, she said she and her sons had some nightmarish experiences with other lenders.
About two years ago, Jason Rodriguez took out one instant payday loan from another company and “kept making payments, but the loan balance hardly went down. He’d pay $50, and maybe $20 of it would go toward principal,” Burton said.
Trista Gibson of Salt Lake City walked into a payday loan provider for the first time about a year ago, when her husband lost his job and they didn’t have enough money for rent. She has been back periodically and, like Burton , considers bad credit payday loans an emergency fund.
Similar to other borrowers, Gibson doesn’t have a traditional rainy-day reserve.

She said knowing payday lenders are plentiful and some are open around the clock makes her feel secure.
“To me, paying $15 to borrow $100 is reasonable,” she said. “I’m probably paying more than I should in interest, but it’s my choice.”

This entry was posted on Monday, December 18th, 2006 at 6:07 am and is filed under Utah.