Some Real Math about Online Lendered Payday Loans – Be Prepared

Knowing that my job that I had held for 21 years would possibly be ending this past July, I needed immediate cash on hand to pay some upcoming bills. I had never heard of payday loans until a friend advised me to check into them. I went to a popular search engine, typed in online payday loans, and WOW! Hundreds of links appeared offering loans anywhere from $100 to $5000 deposited directly into my account by the next business day. Thinking surely these were no different from bank loans, I began filling out the applications at a furious pace.

I quickly noticed that for each application I completed, ten pop-up ads would appear offering loans from other institutions. I simply chose an option from each pop-up, filled out their application, which simply caused the same reaction to occur. At this point I began reading the fine print, and noticed where it read, “We are not a lender. We are currently in the process of matching you to the best lender who can assist you”, or wording to that effect. I filled out about 30 applications until I finally reached one true lender who called and offered me a loan for $800. I accepted their offer, they called my bank, and I was approved. Yippee!!

cash money

They emailed me the requirements for repayment of the loan. Each payday, they would be directly taking $133.88 from my account. That sounded fair enough, so I signed on the dotted line, and had the money deposited into my account that day. I felt satisified that I had found a new money tree, and proceeded to fill out more applications. Then I sat back and actually read the fine print of the loan agreement that I had accepted. I was scheduled for 17 payments of $133.88. That seemed a rather lengthy time to pay back an $800 loan. $800 / $133.88 = 6 payments, maybe 7 to cover the interest fee. Then I read that the annual percentage rate was 358.10%, and the finance charge I had agreed to pay was $1,609.99! I would repay them $2409.99 for an $800 loan. I stopped right there while I tried my best to calm the panic attack that had creeped upon me. There was no going back, I had agreed to the terms!

I called the toll-free number given in their contact information, hopinga they would tell me that this was simply a typogrphical error on their part. Sadly, it was not. Had I read the fine print, I would have been all the wiser. I was bound to the agreement.

I ended up having to let the loan run it’s course. I had no choice at that time as I did end up losing my job, and did not have ample funds to pay the balance. I will say that this loan did save me from paying several late fees that I would have owed to other billers, so in some ways it was a blessing. Some institutions’ terms are more lenient, and the interest rates are not quite as high. My advice to others who may find themselves in the same situation, please read the fine print.