Wisconsin Payday Loan Warning Issued
Grace Jones is executive director of Couleecap, a private nonprofit 501(c)3 charitable organization created in 1966. She recently wrote in to The La Crosse Tribune. It’s paraphrased here:
As families celebrate the holidays, keeping finances in check can be quite a challenge. Despite working hard, many families live paycheck to paycheck, struggling to meet day-to-day expenses or to build a cash cushion for emergencies.
Lacking resources and financial education, families are vulnerable to money traps such as no fax payday loans, a quick growing form of predatory lending in America.
Payday loans do not come cheap. Interest rates and fees typically run between 650 percent or 780 percent APR; The average, supposedly cheap payday loan ranges from $100 to $500; A typical $500 two-week loan will cost the borrower $650 to repay.
According to one study, 91 percent of payday loans are made to repeat customers, cash-strapped workers who fall into a debilitating cycle of high-cost debt. These repeat borrowers often pay far more in interest and fees than they ever received in cash advances.
There are currently 488 payday lenders in Wisconsin, 24 in the four-county service area of Couleecap (counties of La Crosse, Monroe, Vernon and Crawford). Although payday loan companies are licensed by the state, there is no statutory maximum on the interest rates or fees that they can charge.
If you already have one no fax cash loan outstanding, you may find it very difficult to pay the required finance charge payments, much less paying all or a portion of the amount financed when the loan comes due.
If you need a larger, longer-term loan, you should seek other, more traditional, lending sources.