Payday Loans... Legal Loansharking?

Posts like this have been made countless times by a countless number of people. I feel the need to throw my input into the mix as well, as I have insider experience.

For two years I was a branch manager of a payday loan company. When I took over the store, I was the youngest manager within the company's 200 plus stores. The store was losing thousands each month. Within my time at the company, I brought the store up to making over 37,000 dollars each month, with virtually no defaulted loans. I was rolling in money at the place, as I received 5% of that 37,000+ as a bonus, on top of my hourly wage. My store had the highest growth rate in one year, which I recieved another bonus for, lowest defaulted loans for the year... another bonus. During the end of my time, my district manager had made me the trainer for the district, and basically give me half of her district to tend to as well. When I traveled, I did so in my own vehicle, was paid gas mileage, plus 40 dollars for food expenses. I was put up in a hotel at times to help with setups of new stores and was given even more money as a living allowance... well over what I needed to "live." If I was required to run a store for a period of time, I would get a bonus for that store, plus the bonus for my home store. The moral of this story is that there is tons of money being made through payday loans.

The interest rate on these 2 week loans were upwards of 450%. They also make money on cashing payroll checks, fax services, copying, doing taxes, money orders, etc. They prey on the poor and weak, I don't care how much the commercial say's "Please use payday lending responsibly." They are in the business of making money, and by lending it to the poor and charging outrageous interest rates, they keep making money. A person borrows $200 dollars, and two weeks later, has to bring in either the $30 dollar interest rate to "roll-over" the loan, or bring in the whole $230 dollars(Kentucky law does not allow the "roll-over" system, that's why I mentioned both). When someone pays off the loan of $230 dollars, they are now needing money again, and couldn't afford to just pay the loan off. So they borrow the same $200 again. Two weeks later, they pay basically another $30 fee, and borrow the same $200 again. This is what the lenders want. After so long, you've paid thousands in fees, yet your still borrowing the same money you borrowed in the first place. They are not like a finance company, where you pay a payment on a loan and eventually it gets paid off. The loan just keeps going and going until you pay the full amount of your loan and walk away.

People can avoid these traps by simply not falling into them to begin with. Whether you need the money now or not, just don't use them. These companies can take you to small claims court if you default, and can even garnish your wages. Lucky for people in my town, the county attorney hates payday loan companies, and therefore will not set up a small claims case for any representitive of the company.

I know I've rambled a lot, but I had a point to make. If you are already in this trap, call the office and ask for a payment plan, as you can not make the full payments any longer. They should set you up on one, and you can slowly get rid of this trap once and for all.