BBB issues payday loan warnings
MONTGOMERY, AL (WSFA) - Many people may be cash strapped after overdoing it for the holidays. The simple fact is some people can’t qualify for a traditional loan because either they don’t make enough, or they have poor credit.
For some people payday loans are the only option, but before you sign on the dotted line there are some things the Better Business Bureau would like you to know.
"That can be so damaging long term, to start this downward vortex of debt that's tough to get out of,” said David Smitherman with the Better Business Bureau.
The BBB has several tips you should think about before signing on the dotted line. Consumer experts say it’s very important to read all the fine print and know exactly what the interest rates are.
“You've got to pay that loan back on the designated schedule or they will be happy to roll it over for you. That could go on for weeks or months and you end up paying two to three times what you borrowed."
There are laws that set how much you can borrow and the maximum interest rates you can be charged. Over the last few years the Alabama legislature has introduced several bills to work on regulating the payday lending industry and reduce maximum interest rates.
The big take away, know what you’re agreeing to, and what will happen if you can’t make the payments.
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