Payday lenders are producing videos designed to make their high-cost loans seem helpful. What they never say is that the vast majority of the loans they make go to borrowers who can't meet the short-term due date for their loan and must borrow again and again, paying about $50 every two weeks for a $300 loan.
In this video, national payday lending chain Check N Go asserts that payday loans are better than overdraft fees. Not so fast. Both are financially harmful and payday lending can lead to more overdraft fees.
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Here is what they say... |
And here is the real deal |
In this video, Check N Go compares other products to payday loans in an attempt to make 390% annual interest sound reasonable. They don't say that payday borrowers are typically caught in these high-cost loans for much longer than they ever planned. Payday loans are designed to be long-term debt and while many borrowers do default, it is only after paying hundreds of dollars in interest for an average $300 loan.
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Here is what they say... |
And here is the real deal |