As victims across both Oregon and Washington can tell you, there are many forms of short term predatory lending. The defining characteristic is that in each instance a lender takes unfair advantage of a consumer’s financial situation by charging ridiculous interest rates and other unconscionable fees and charges.
Defenders of short term predatory lenders might say that no one is forcing any of the borrowers to the table which is something less than accurate. When you need money to eat until your next paycheck you don’t have a whole lot of choice. Regardless of whether the borrower has any choice, we know one thing for certain and that is that lender are preying on misery, taking advantage of Washington and Oregon consumers while they are down.
Examples of short term predatory lending include the following:
Tax Refund Anticipation Loans (RALs): These loans are short-term cash advances against a probable income tax refund. But the loans are offered at murderous rates from anywhere between about 39% to over 699% annual percentage rate (APR). Are you kidding me? Also, they speed up the refund process by as little as seven days. When you compare these rip off loans to what consumers can expect by filing online and having their refunds deposited directly into their banking accounts, it’s like throwing money away.
Payday Lending/Cash Advances: This is the practice of using a post-dated check or electronic checking account information as collateral for a short-term loan. For cash strapped consumers this process is all roo familier: For approval, borrowers need only an i.d., a checking account, and an income from a job or government benefits, like Social Security or disability payments. The interest rates cannot be discussed with a straight face.
Auto Title Loans: Like payday loans, car title loans are sold as small emergency loans, but in reality these loans have extremely high annual interest rates that trap borrowers in a cycle of debt. I have never seen a borrower pay one off quickly and honestly I don’t know that I have ever even see a borrower pay one off at all. A typical car title loan is made for far less than the value of the vehicle and has an annual interest rate over one hundred percent, mandating repayment within one month.
If you are contemplating any of the above short term predatory loans or are already stuck with one, it is a sure sign that you have more than a temporary problem that can be resolved with a short term cash infusion, call our firm today, get me on the phone or set up an appointment online for either of our Washington Law offices in both Seattle and Vancouver or either of our Oregon offices in both Portland and Salem. I look forward to hearing from you.