Always Avoid Rolling Over Payday Loans
By Desmond CarlislePayday Loan Writer
What do you do if you've rolled over your payday loan and just find yourself fighting an uphill battle? Ruby and Ronald Stoker of Junction City, Oregon, got into trouble when they took out a payday loan for $700, according to the Oregon Student Public Interest Research Group, then bounced a check for the amount plus the $140 fee.
Overdraft fees, a lot of stress, and one rollover later, the couple was left with two options by the fast cash advance company:
- Pay the full amount owed.
- Pay another $140 fee to roll over the payday loan for another two weeks — and, in the process, retain their status as a "preferred customer."
This is where the real problem hit. The Stokers rolled over the cash loan and, when it came due again, rolled it over a third time. In order to keep up with the escalating fees they had been sucked in by, they took out two additional payday loans and a car title loan — for a debt that ultimately exceeded $2,000. Luckily, they were able to find help.A local credit union, which helped them refinance their repayment, got them out of this mess, but the lesson is clear. If you are in a position where a payday loan is the best option you've got, be sure you can make the payment date. Rolling them over is how you get yourself into serious trouble.
The point of instant payday loans is to pay off debt, not dig yourself an even deeper hole.
June 1st, 2006 at 10:21 am
[…] Earle was approached about proposing the new legislation by CompuCredit, an Atlanta lender that agreed to stop offering payday loans in North Carolina earlier this year. She said her bill prevents lenders from taking advantage of consumers with rollovers and sending interest rates sky high. […]
June 30th, 2006 at 8:08 am
[…] But if you need to roll over the loan, the costs accelerate quickly. To calculate the cost of a payday loan visit the Consumer Federation of America online. […]