A few journalists, who we all recognize as beacons of hope and truth in society, investigated payday loans in Texas. Their purpose was to determine if payday loans are legitimate ways to get out of a cash crunch or if they are a rip-off.
Unfortunately, after reading the article, the results seem inconclusive. In the end, they never said payday loans would be bad, they only quoted others saying that. Probably because they found for themselves that payday loans aren’t the evil debt traps everyone thinks they are.
Two of their employees went undercover to get loans. The first borrowed $250 and was required to pay back $306.36. the second borrowed $300 somewhere else and had to pay back $361.35. The first loan came at a rate of 411% APR and the second was 533% APR.
Of course, anyone with a brain and a calculator can figure out the actual amount they paid in interest. The first borrower owes 25.54% in interest and the second borrower owes 20.45% in interest. The article said the second borrower owed 17% in interest, but I have no clue how they came up with that. 61.35 is 20.45% of 300, that’s pretty simple math. But the next line in the article is the kicker:
“We did the math on Blake’s loan and assuming he made no payments to his principle balance within a year he would pay $1,600 to the Cash Store.”
Well there you go,assuming someone is mindless enough to make no payments on a two week loan for an entire year, then yeah, look at how much the interest adds up! Are people stupid enough to eat this stuff up? This is unbelievable.
Of course, this “investigation” does not end with any conclusion. The reporters are likely against payday loans, but now realize they are completely fine if you pay them back on time. So of course, they had to quote some other dolt criticizing payday loans.
I wish everyone in the country investigated payday loans in this way, so that deceptive consumer advocates and politicians could be exposed as the liars they are.
