Payday loans are incredibly risky because of the very high-interest rates and fees they charge their customers.

Hey matt oh hi it’s you i’m off is this really you it’s been a long time buddy how long has it been six years that’s six years since the last time we saw at high school oh my gosh you don’t even respond to your facebook messages i and some of our friends would usually hang out from time to time and would contact you on facebook but you don’t respond i’m surprised

To see you at the school reunion oh my god you’d be living as an emmy right what’s up for you no man things have been really tough for me more so over the past six months i initially lost my job during the pandemic and i’ve been struggling to pay my balance bills i got a part-time job at a retail store and also got into a low-income housing i’m still struggling

Financially to keep up with paying my bills because i earned very little income wow i’m sorry buddy i didn’t realize you were in such dire situation were you able to get some financial assistance from the government i had the government helped some individuals who were affected by the pandemic given that you are one of them i did get some financial assistance from

The government but the money that you get is so little it’s not even enough to cover rent so i resorted to going into taking a loan from a payday loan company that has wasn’t my situation financially i wish i never did that really how come it all started when i was owning about two months worth of rent and i had to find a way to pay my rent if not i’ll be evicted

So i resulted to go into a payday loan company in my neighborhood i went in there and i took out a 750 loan and when that loan plus its interest fee was due in two weeks i didn’t have the cash to pay that so i took a second loan from a different failure loan company to pay off my first loan and that cycle of debts just continued it has basically been a downward

Spiral so forgive me if i haven’t responded to you guys i’ve been really broke six months later i would monitor three different failures on companies from which i kept borrowing the maximum allowable amount and the fees man the fees that’s what has been killing me man the interest would go up to about 300 300 can you believe that at my young age i literally have

Panic attacks when i think about how much debt i put myself into jeez man that sounds awful you know i had this finance class back in college and my teacher was talking about payday loans and how those payday loan companies rip people off especially low income earners i know that the simplicity of borrowing and easy access to the cash made payday loan lenders

Appealing to most customers especially for those who have little to no access to credit one of the thing again is that payday loan lenders rely on repeat customers often low income earners such as yourself they go about advertising on tv radios online and even you get some meals they target vulnerable working class people who live paycheck to paycheck and then

They charge exorbitant company interest rates for cash advances and they seldom offer borrowers a workable repayment plan so a quick question for you was your credit history ever checked by the payday loan lenders to find out if you have the capacity to repay your loan just like what the banks do before they loan you on the money no man my credit was never checked

I went to them because of the ease at which i could get access to the cash flow wow i got baited that’s terrible buddy you know that’s how they get you so what were the terms of the agreement if you don’t mind me asking well the failure loan report initially offered to lend me a small amount of money about a hundred dollars to 500 i think at the time which would

Be due when i got my next pay i simply had to commit to paying what i assumed was a reasonable amount that was fifteen dollars for every hundred dollars i had borrowed i had to make out the post daily check to cover the loan plus the fee and i was told to check with the cash that at the end of the loan period which is usually every two weeks was that all you were

Told what else can you remember i also remember that the stock clerk requested that i provide an authorization to electronically withdraw the money from my bank account but when the due date arrived i quickly realized that i didn’t have much cash in my bank account to pay my bills i was forced to go back to the payday loan company and ask for a repayment extension

I’m so ashamed and depressed just talking about this wow that’s indeed how the cost of taking the love from the payday loan lenders can be really expensive and that is exactly what the payday loan lenders like to hear they offer an extension known as a rollover which would give you another two weeks to repair the loan with the caveat that you will pay the first

Loan for example say you borrowed a hundred dollars and you’re unable to pay after the first rollover and let’s assume that the rollover was about thirty dollars in addition to the hundred dollars that you just borrowed after six months the fee would hit about 180 plus the principal leaving you with a debt of 280 borrows can easily get caught in this debt cycle

Taking out additional payday loans to repay the previous loans all the time sinking into a financial quicksand you can only imagine the high cost of people who borrow about a thousand to three thousand dollars it must really be very expensive for them that’s really scary man have you tried conducting a credit counseling company they might be able to help you get

Out this nightmare so you can just pay up all your debts credit constantly nonprofit company who are they not-for-profit credit counseling agencies exist to help individuals like yourself and also families sort out their personal finances without selling you anything clients receive highly qualified support at a fraction of no cost you should go see one of

Them to help you create a financial budget they can help you work on the payment plan you can find a credit counseling company online or you can also contact a credit union to help you get out of this debt thanks henry for your advice i’d definitely contact one of the credit counseling companies i was in a dark place where you met me when or a good body don’t

Sweat it man there’s light at the end of the tunnel but you need to be money smart before getting any loan please don’t ever use a payday loan company anymore instead i advise your attempt to get a credit card from one of the banks getting the credit from the bank could actually help you build your credit and the interest rate will never be as high as that of what

The payday loan companies charge i read somewhere that the payday loan companies charge up to about 100 interest compared to the banks i just charge about 90.99 percent wow thanks thanks thanks i wouldn’t use them anymore i’ve let my lesson and i’m much wiser now all right buddy i’ll check up on you later i’ve got to go find the other guys it was nice talking to

You cheers hi guys if you enjoyed watching this video please like share subscribe and hit the notification button to see more of my videos when you do that you encourage my channel to grow payday loans are incredibly risky because of the high interest rates and fees that come along with it do you know that in the us payday loan companies outnumber the mcdonald’s

Franchise an estimated 12 million people use payday loans every year that’s incredible right also in canada the canadian payday loan association reports that nearly 2 million canadians use payday loans every year also in 2019 while it was discovered that many payday loan companies target many different americans they tend to go after traditionally vulnerable people

These are people without college degrees renters african-americans hispanics individuals earning less than forty thousand dollars a year as well as people who are separated or divorced are the most likely people to get to pay their loan the number of payday loan lenders especially in african and hispanic neighborhoods have risen dramatically year over year payday

Loan lenders tend to congregate in low income neighborhoods close to their tiger population as a good business practice payday loans are advertised as an emergency relief fund but most people borrow to cover their routine living expenses such as the car payments mortgage payments credit card payments utilities food and rent the difficulty of course when it comes

To repaying the loan because by then it’s time to pay the next month’s cycle of bills in that case users are forced to go to underpay their loan lender and take out another loan to keep up with the bills to best avoid taking our payday loans for emergency reasons it’s best to budget your monthly expenses to ensure that you’re living below your means and create an

Emergency fund to help meet unexpected expenses and also avoid being trapped into a recurrent situation where the pay doesn’t come the biggest reason for being caught up in the payday loan debt trap is that the people taking these loans were underbanked which means their accounts lacked access to credit or other basic credit facilities such as an overdraft major

Banks have been closing their branches in low income neighborhoods across canada as the written banks continue to prioritize large investors over daily customers providing the less service and charging the highest fees to those with low savings so pay the loan lenders see this opportunity and move into this underserved market and raise the fees to pediatric level

So what i want from us is to take what we’ve learned from this personal finance video to become money smart and achieve that financial freedom the other way is i can also make more money by not only saving for emergency reasons but also investing in the stock market you can create a brokerage account and buy into stocks that pay dividends thereby your stocks are

Pressured in value and also being paid dividends on a regular basis it could be either on a monthly basis on a quarterly basis or on a yearly basis if you’d like more information about how to easily create a budget to meet your financial needs i encourage you to click the link below also if you want to start investing in stock market i have a link in my description

Box where you can sign up and start trading i’ll leave you with a quote by william award who said a little bit of before can do a person a lot of good that includes managing your financial responsibility before you go into debt for any reason take a moment to think twice about the consequences for doing so i’ll see you in the next video bye

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