Warning Issued on Hawaii Payday Advance Rates
By Paul RizzoPayday Loan Writer
Out of cash with no credit and zero savings? Quick payday advance lenders across Hawaii are looking for people like you.
First, however, you must decide if these products are a good idea.
Wendy Burkholder of Consumer Credit Counseling Services helps people who are drowning in debt. She says her average client has five pay day loans. The problem, she says, is people take out payday loans just to pay off other payday loans. Its a cycle, she says, almost impossible to get out of.
“The target group are the desperate, the uneducated and the needy. That bothers me.”
“Not everybody finds that they have enough money in their pocket to meet their needs, and they welcome our services,” said Craig Schafer, president of PayDay Hawaii.
Craig Schafer owns 11 bad credit cash loan centers in Hawaii. He says clients love the convenience of his services, but even he admits quick cash can create big problems.
“If a person gets into a cycle where they go into our stores, or any payday store, and borrows over and over and over again, that high APR or interest rate equivalent does become a huge issue,” said Schafer.
And not just for Hawaii civilians. According to Navy statistics, 20 percent of military personnel are payday cash loan borrowers, borrowing more than $80 million annually.Paul Belanger, director of Navy-Marine Core Relief Society, said:
“You are going to use your rent money, your car payment money, you are going to use monies you would have used for regular expenses to pay off the loan. And then because you can’t make your car payment, you are going to turn around and you’re going to re-borrow that money on the same day. And that’s legal.”
This year, the Legislature is considering several bills to regulate the industry of fast cash loans. But for now, it’s up to consumers to read the fine print and, more importantly, be smart with their money.