There are millions of people who suffer with payday loan debt every single day. The New Yorker recently did a piece on a typical woman who utilized these loans and has found it incredibly difficult to maintain. Her name is Azlinah Tambu and she is a 22 year old single mother who is living in Oakland California.
Finding herself in a tough situation, Tambu had to take five payday loans from five different lenders so that she could fix her car. This is a typical story that occurs to so many people in the country and it is something that many legislators are worried about.
Tight Spot for Payday Debtors
Tambu was in an incredibly tight spot because she needed her car fixed in order to get to work and drop off her child at the daycare. She knew that there would be many difficulties in paying off the payday loans because she needed her actual paycheck to pay for rent and utilities. Unfortunately, she was not anticipating the type of trouble that she was going to have with these lenders.
In the state of California, there is no legal “roll over” where a lender can refinance loans. Tambu had to pay back the first loans, but she then needed to take out more money from the same lenders and incurred even more fees. Lenders tried to withdraw money from her checking account, but she had almost nothing that they could take. When they tried, she over drafted and was charged with over $300 in overdraft fees.
The account fees were quickly paid and she closed the bank account. She is still struggling to pay off the lenders that helped her with the car.
This is exactly what many people in the industry are trying to do because they can gain so much from them. At the end of the day, it is important to remember that the people who are struggling with these loans are not only being taken advantage of in certain situations, but they are also having their life completely ruined.
For a single mother taking care of a child at the age of 22, it is arguably exploitation to have payday loans with such outrageous fees. Although $15 is not really all that expensive for every $100 borrowed, it can still add up to a lot with 15% interest every few weeks.
Unfortunately, the story for Tambu has not gotten any better. She visits all 5 payday lenders to provide approximately $40 to each in order. When asked whether they should be illegal, she quickly responded that they should not. In fact, she is working so hard to pay them off so that she can utilize them later on if needed.
At the end of the day, it is very important for some of these people to be able to get their hands on money even if it is not in their best interest. But you have to make sure you can pay these back quickly.
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