John Oliver on Payday Loans and Predatory Lending

Payday loans are essentially a form of predatory lending. Payday loans can legally lend at usurious interest rates, which means consumers lose. There are alternatives to payday loans.

There are more payday lenders in the United States than there are Starbucks or McDonald’s. As John Oliver sees it, their business model is a “recycling symbol for human misery.” Avoid payday loans if you can!

Consider other options before predatory lending payday loans

Payday lenders are basically loan sharks. Before you take out a payday loan, first consider your other options.

Borrow money from a friend or family member. Offer to sign a promissory note if it makes you more comfortable. Close friends and family are less likely to sue you if you have to delay repayment.

Request more time to pay. Talk to your landlord or mortgage lender and request temporary forbearance. Based on your payment history, creditors may be willing to work with you short-term.

Borrow against a retirement account. You may be able to borrow against a retirement account, like an IRA or 401k. Do not borrow more than you need. Most plans require paycheck deductions to repay loans.

Get a paycheck advance. Ask your employer if you can get an advance against your paycheck. Most employers no longer offer these. Small business employees most often have paycheck advances as a possible option.

Get a short-term loan from a credit union. Many credit unions offer competitive interest rates. Instead of fighting to make bills paycheck to paycheck, take out a small loan and try to get ahead.

Take out a cash advance on a credit card. Even the high interest rates on credit card cash advances beat the usurious rates on payday loans.

About Brian V. Lee 566 Articles
Brian V. Lee provides bankruptcy, foreclosure defense, business turnaround, and litigation services to clients in the District of Columbia, Virginia, and Maryland. Brian was the Washington, D.C. state chair of the National Association of Consumer Bankruptcy Attorneys from 2016 to 2018.