006 Should You Use A Loan Store

Should You Use A Loan Store?

Loan stores are a particular kind of store set up for people who are vulnerable and tight on cash so that they can take out a payday loan. Essentially, they lend people the money they need when they feel they have no other place to turn. 

Never heard of a payday lending store? They can be found in places such as strip malls or downtown lots. They are usually located in neighborhoods where the income level is low in an effort to target those who most commonly want to take out payday loans, in a gross act of exerting their power over those in need.

These stores offer a variety loans including title loans, payday loans, installment loans and check-cashing services. Don’t expect to borrow a whole lot. You can borrow anywhere between $100.00 and $500.00. 

A payday loan is a short-term, unsecured loan where a lender tells the borrower that they need to pay it back by their next payday in full, including any accrued interest. Typically these loans are capped at a smaller amount, so they aren’t meant for people who need a huge loan that they plan to chip away at over time. A title loan is a secured loan where the borrower will use their car as collateral with the lender. The lender will place a lien on their car title and the borrower temporarily surrenders the hard copy of their vehicle title in exchange for a loan. Installment loans are loans that are repaid over a period of time with a set numbered of scheduled payments of a certain amount. With installment loans, you’ll typically have to make at least two payments for it to qualify. The terms of the loan can range from over the course of a few months to being even decades long.

Most of these companies make their money off of the origination fees and interest rates charged to customers. Before checking out one of these locations, please be aware they are expensive and their rates normally cost more than using a credit card. They will typically gouge you will a higher interest rate, so that you aren’t just paying back the amount that you borrowed, but you’ll have to pay an additional amount based on the APR rate.  Do your research to make sure this the right place for you because you can risk being taken advantage of at a lending store.