Beware of Virginia’s “Shark” Infested Lending Waters
Monday, August 11th, 2014
In honor of Shark Week, we want to ask: Is it now safe to go in the lending waters in Virginia?
Over the last several years, the Virginia General Assembly has passed legislation to regulate high-cost payday and car title lenders. Is it now safe to borrow from these lenders? The answer to that would be no!
Check out how this type of lending is still very much predatory practice:
- They lure you in with a promise of “no credit check.” This is your first red flag that this isn’t a real loan–it is a trap. A real lender takes into account your ability to repay. How can you possibly repay a loan if your payments are 40% of your income? Or the fact that you can’t even cover your current expenses?
- Both payday and car title lenders can and do charge an enormous amount of interest for their loans. Payday lenders charge an average of 289 % APR and car title lenders charge an average of 219% APR.
- Although Virginia has put some restrictions on these lenders don’t expect many of them to abide by the law. These lenders have a long history of paying large fines for violating the law. For example, Cash America (Advance America in Virginia) recently paid $8 million and Ace Cash Express paid $10 million for violations found by the Consumer Financial Protection Bureau. There is also a list of some of the fines paid by payday lenders to Virginia regulators.
Remember, if you are trapped in a payday or car title loan, visit this site for more information on how to get help.
Image courtesy of stoppredatoryloans.org