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Posted: Wed Mar 29, 2006 10:29 pm Subject: Pay Day Loans From the Bank

What are people's opinions of pay day loans offered by your bank? My bank offers a pay day loan for direct deposit customers of up to $500 for $2 per $20. The $550 is deducted from your account from your next direct deposit, or after 35 days. I've taken advantage of it more times than I'd like to admit, and think it's an addictive and costly habit by those of us in dire straits or living beyond our means. I've managed to break myself of the habit by doing a major downsizing of my entire life, but I'm interested in knowing what other people think.

Posted: Wed Mar 29, 2006 10:40 pm Subject:

I always felt that banks like it when you have overdrafts,since they are collecting lots of fees,and they love getting every fee that they can,they might as well start giving the loan to go with the fees,that way they will be just like those payday loan sharks.I personally will never take out a short term loan again,its just asking for trouble down the road.Atlease the interest on the loan is less than the overdraft fees they will charge when you cant pay the loan back.Its still a payday loan,and like you said they can become addictive.

Posted: Wed Mar 29, 2006 10:44 pm Subject:

yes, it is still a payday loan and if you read through this forum, there are hundreds of post from people who are miserable and don't know where to turn, due to financial train wrecks caused by payday loans. I say R-U-N!!!!
R-U-N!!!!!

Guest · Posted: Thu Mar 30, 2006 1:24 am Subject:

That's reasonable. If only we'd had those when i needed money.

Posted: Thu Mar 30, 2006 4:59 am Subject:

HUmm.. ON the surface it actually sounds like a BETTER (still not a good Idea), at least banks are regulated and you have recourse. The interest rate is cheaper than most PDL lenders (unless other side regulated by the state),and being an actual bank may tend to be a little more honorable in the way they handle the account.
The down side of this is they have all your financial information, and can draft you account for their money or fees at any time, and you have almost no recourse.

Posted: Thu Mar 30, 2006 8:46 am Subject:

Deleted by PDL Associate

Posted: Thu Mar 30, 2006 8:54 am Subject:

To me a payday loan is a payday loan. I would advise anyone to STAY AWAY from them.

Posted: Thu Mar 30, 2006 9:05 am Subject:

Remember this.. while a bank is regulated and their pay day loans may be more friendly, more regulated.. the dangers are the same. A payday loan is not extra money. and while it may be useful in a short term cash flow situation, it almost never is that simple....so i agree stay very far away from them.

Posted: Thu Mar 30, 2006 9:05 am Subject:

those fees are actually alot better then most of the payday loans i have gotten. i took out loans with fees of 30 per 100. although the fees are better, i personally would never get another payday loan again.

Posted: Thu Mar 30, 2006 1:20 pm Subject:

It could be better than online payday lenders. Banks are licensed also. You can discuss your problem face to face. But still it is a payday loan.

Posted: Thu Mar 30, 2006 1:55 pm Subject:

I think the main concern is why we're even needing to get a loan to begin with. Sure emergencies come up, but what got us to that emergency with no cash? Simple planning, saving, and thriftiness will save all sorts of embarassment in the long run.

Posted: Thu Mar 30, 2006 2:28 pm Subject:

I am with Mikey.

Posted: Sat Apr 01, 2006 6:00 am Subject:

Speaking of banks and payday loans, I received a reply to the letter I sent regarding the First Bank of Delaware. They provided loans for companies like Universal Cash Advance and others. It seems they are getting out of this business. I will post a copy of the letter later on in the forum.

Posted: Sat Apr 01, 2006 12:14 pm Subject:

Another thing that my bank does with its payday loans is limit how many consecutive months you can use them. Then they make you take a break for 3 months before you can take out another one. (They are actually called direct deposit advances).

Even though they are handy and easy to use and pay back, they are a bad habit and it is so easy to get hooked on them instead of only using it in a true emergency.

Posted: Sat Apr 01, 2006 2:40 pm Subject:

I guess I'm just damaged by payday loans in general, but what makes a payday loan from your bank ugly to me is that it's from YOUR bank. It's not some nameless entity online, it's where you go weekly to deposit your checks and withdraw money..These people may know you by name. If you default with them there's no room for error. sure, maybe you can be a little late one time, but what if you just can not come up with the $550? Then what? You're out a bank account. Even though the fees are prettier than a classic payday loan it still sounds scary to me.

Posted: Sat Apr 01, 2006 2:56 pm Subject:

This is exactly why people need to understand that one mistake is fine, but having 2 mistakes is bound for trouble.

By getting that loan, you're in need of money. And getting this loan means you're going to turn over your paycheck next week. Making a mistake is the same for both...they shouldn't happen.

Regards-
Mike

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