Friday, August 21, 2020
Chicago Payday Loan Horror Stories - OppLoans
Chicago Payday Loan Horror Stories - OppLoans Chicago Payday Loan Horror Stories Chicago Payday Loan Horror StoriesInside Subprime: Feb 25, 2019By Lindsay FrankelFor the 19.1 percent of Chicagoans living in poverty, making ends meet is a struggle, and the high cost of living in the city threatens to make matters worse. Families who are strapped for cash and have bad credit often turn to payday loans in Chicago. And there are plenty of payday lending storefronts in Chicagoâs struggling neighborhoods that make promises of fast cash. But the Illinois Attorney General warns residents that payday loans cause significant financial harm, leaving borrowers worse off.While Illinois has some protections in place for borrowers, such as limits on rollovers, payday loan providers in Illinois are still charging 330 percent APR on average, according to Pew Charitable Trusts. Itâs no wonder so many Chicagoans struggle to pay back these risky loans on time. And thatâs by designâ"payday lenders profit when borrowers become trapped in debt, tacking on more fees each time a payday loan is renewed. 91 percent of payday loans are taken out by borrowers who get five or more loans in a year.Tabitha Scott of Hyde Park was one of those repeat borrowers. Scott fits the profile of a payday loan borrower, according to a Pew report. The 35 year-old single black woman originally borrowed money to cover repairs on her wrecked vehicle, but quickly became trapped in debt, and went on to take out two additional payday loans. âI needed [the loan] right then, right there,â said Scott. But she ended up paying more in interest and fees than the principal of the loan.Payday lenders in Chicago are concentrated in the cityâs low-income neighborhoods, according to 2015 analysis conducted by the Chicago Reporter. 7 in 10 of the cityâs payday lending storefronts are located in areas with a below-average per capita income.Dawn Dannenbring of Illinois Peopleâs Action said that predatory lenders taking advantage of low-income minorities was âone more instance of insti tutional racism.â She added that the use of payday loans highlights income inequality in Chicago. âMost people who use payday loans, theyâre actually taking out money for expenses they canât meet with their paychecks because we donât pay people enough,â she said. âThese lenders prey on people who just canât make ends meet.âIf you are a Chicagoan with your own payday loan horror story, the Illinois Attorney Generalâs office urges you to know your rights. The website states: âIf this happens to you, please remember that under Illinois law, you are entitled to enter into an interest-free repayment plan with your lender after youâve been in debt for more than 35 days.â Most payday lenders wonât offer this option, but if you request it, theyâre required by law to provide it. Payday lenders also canât issue a new loan if it would cause you to become trapped in debt for more than 45 consecutive days. âTogether, these two provisions are designed to give pay day borrowers some breathing room to pay off their old payday loan debt without getting buried under additional charges and fees.âFor more information on payday loans, scams, and cash advances and check out our city and state financial guides including Illinois, Chicago, Peoria, Rockford and Springfield.Visit OppLoans on YouTube | Facebook | Twitter | LinkedIn
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