Here are the lessons we’ve learned directly from borrowers’ experiences with open-end, “line of credit” loans.

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•  Borrowers get caught in a debt trap
  • “I kept paying and paying and paying on it, but the balance never went down. After a year and a half of never missing a payment, my balance was higher than what I first borrowed.”
  • “I got an open-end credit line at Allied Cash Advance, and ended up paying them three times as much as I borrowed in the end. It was so hard to keep up with payments, because as soon as I made one, I was almost out of money for the month and I needed to get another advance. They keep the cycle going..”
  • “I got an open-end line of credit and took out $1,500.  I made four payments of almost $500 each, and my balance never changed.”
• Lenders harass borrowers that get behind
  • “When I fell behind, they began calling me and making threats that they would send people to my office.”
  • “My family members also got phone calls as well. The worst was when I got a call saying that if I didn’t pay $600 that day, the sheriff was coming to arrest me. I was so scared. I called the sheriff’s office and they said there was no arrest warrant for me”
  • “I fell behind, and the harassment started immediately. I would get phone calls every day, threatening to come to my work and have me arrested. I was afraid I would lose my job, because even if they didn’t come, the stress made it so that I couldn’t work.”
• Lenders debit borrowers bank accounts and cause problems
  • “Cash 2-U took money straight out of my bank account without my knowledge. They even sent me a bill for the rest of what I owed after the bank account was empty. I didn’t find out about this until I tried to pay my utility bills and didn’t have enough money for them.”
  • “When I knew I wouldn’t be able to make a scheduled payment, I called them to talk about an extension. They agreed, and told me that they would not make the automatic withdrawal for the next scheduled pay date. They did it anyway, and it caused me a lot of bounced checks and bank fees as a result.”
• Many borrowers get multiple loans and get into an even bigger debt trap
  • “The interest and fees quickly added up, and over the course time I had to take out more loans from other companies to try and make payments.”
  • “To make sure we could make our payments on time, we had to take out loans from other places. It is very stressful to have to go to one place, get a loan, but then go straight to another place to make a payment.”