Find Payday Loans: The Truth Behind the Myths

Even as anti-payday loan lawmakers continue their attempts to drum up support by tossing around horror stories of outrageously high interest rates, fleeced low-income families and disreputable business tactics, many others--including the people the lawmakers are ostensibly trying to protect--tell quite a different tale. For proof of this, one needn't look any further than Ohio, where some politicians are actively campaigning to place unyielding restrictions on the payday loan industry. In response, an independent group polled 400 current customers--and found that 96 percent of them feel companies like Find Payday Loans offer "a useful service" and have no trouble paying off their loans on time.

So what's the real story? To help you sort fact from fiction, Find Payday Loans has compiled the following common myths about the industry with explanations as to whether there's any truth behind each one:

Payday loans carry outrageously high interest rates and end up damaging customers' budgets rather than helping them.

• This misconception comes from anti-payday loan lawmakers, who like to say payday lenders fleece customers with an exorbitant fee of 400 percent. In reality, that figure is derived from an annual percentage rate, which would be applicable only if a borrower continually rolled over his or her payday loan for nearly a year. So the percentage rate on a payday loan is exactly what it's quoted to you as when your account is settled on your next payday.

Once a borrower gets involved with a payday loan, he or she becomes hopelessly ensnared in a seemingly never-ending debt cycle.

• While this might be true of revolving credit card accounts, a loan you obtain through Find Payday Loans is quite the opposite. Because the balance of your loan is paid off automatically when you receive your next paycheck, your account is closed within two weeks of borrowing the money and there's nothing else to pay ... unless you take out another loan in the future. Even in states that permit rollovers, which means you can pay a small fee to put off paying the balance for another two weeks, the maximum number of rollovers you're allowed is usually four.

Payday loan practices were set up mainly to prey on low-income families and minorities by overcharging them for loans they can't get anywhere else.

• On the contrary, those who support the industry usually praise outlets like Find Payday Loans for being available to people who otherwise wouldn't be able to acquire loans. According to an editorial in Ohio's Hamilton News-Journal, payday loans "are there for people when the banks and other lending groups turn their backs on working-class people who are trying to make it." That said, it should also be noted that a majority of payday loan customers have annual incomes of between $25,000 and $50,000--which isn't exactly poverty-level pay.

Payday lenders have damaged the state of the economy by loaning money to people who they knew full well couldn't afford to pay it back.

• Find Payday Loans, like all payday loan companies, will not approve a loan that amounts to more than what can be covered with the borrower's next paycheck. That's why more than 90 percent of all accounts are paid in full within two weeks of approval. Besides, if the industry made a habit of handing out money to people who had no means of paying it back, few payday lenders would stay in business very long.