The Victims of Payday Lending

To contact a nationally accredited consumer credit counseling agency in your area, call 1-800-388-2227 or go to Borrowers go to payday lenders for help. Time and again, they come away in financial ruins.

Every week, we hear from people who have been devastated by the debt trap of payday loans. Their stories are amazingly consistent. They go to payday lenders out of a short-term need for cash and end up caught for months, even years, paying big fees for small loans without being able to pay them off once and for all. Read more about how the debt trap catches borrowers.  Driven by the fear of bounced checks or by the false threat of prosecution, payday borrowers are forced to pay the loan fees before they pay basic living expenses -- like rent, mortgage, electricity... even groceries.

Here are some of their stories:

"At the time it seems like the way out, but this is not a quick fix. It’s like a ton of bricks." Sandra Harris, once a Head Start student, now a well-known and respected member of her community, worked diligently to keep up with her bills. In a tough time, she turned to payday lending. After several rollovers, Sandra’s first loan was due in full. She couldn’t pay it off, so she took a loan from a second lender. Frantically trying to manage her bills, Sandra eventually found herself with six simultaneous payday loans. She was paying over $600 per month in fees, none of which was applied to her debt. Sandra was evicted and her car was repossessed. Read more of Sandra's story. 

"As soon as you get your first loan, you are trapped unless you know you will have the 300 extra dollars in the next two weeks." Lisa Engelkins, a single mother making less than $8 an hour, paid $1254 in fees to renew a payday loan 35 times. Lisa thought she was getting “new money” each time, when in fact she was simply borrowing back the $300 she just repaid. She paid renewal fees every two weeks for 17 months to float a $300 loan, without paying down the loan. Read more of Lisa's story.


"I felt like I was in a stranglehold each payday. After awhile, I thought, 'I'm never going to get off this merry-go-round.' I wish I’d never gotten these loans."

Anita Monti went to an Advance America payday lending store in hopes of finding a solution to a common problem -- how to delight her grandkids on Christmas. Her response to the payday company’s offers of help ended up costing her nearly $2000 and many months of emotional turmoil. Read more of Anita's story.


"I needed the cash to get through the week. It didn't cross my mind that I was borrowing back my own money."

Arthur Jackson,* a warehouse worker and grandfather of seven, went to the same Advance America payday shop for over five years. His total interest paid is estimated at about $5,000 -- for a loan that started at $200 and eventually increased to a principal of $300. Advance America flipped the loan for Arthur over a hundred times, collecting interest of up to $52.50 for each transaction, while extending him no new money. His annual interest rate was in the triple digits. Arthur fell behind on his mortgage and filed bankruptcy to save his home. Read more about Arthur's story.

*Name changed to protect the borrower's privacy.


"In five months, I spent about $7,000 in interest, and didn't even pay on the principal $1,900. I was having marital problems because of money and didn't know what to do for Christmas for my kid." Jason Withrow, as quoted in a December 2003 account by Russ Bynum of the Associated Press.

Petty Officer 2nd Class Jason Withrow injured his back and lost his second job as a result of a car accident in July of 2003. During a rough patch, the Navy nuclear submariner took out a payday loan. He ended up going to multiple lenders -- for seven loans all told -- to pay the repeated interest fees on his initial advance. Jason’s initial loan was for $300.

After her husband was laid off, Pamela Gomez* borrowed $500 from a payday lender. But the Phoenix, Arizona woman found that she, like many other borrowers, could not manage to repay the $588 she owed ($500 plus $88 in fees) when it was due in two weeks. She went to a second lender to pay the first, and a third to pay the second, getting in deeper until she had five loans of $500. She was paying $880 every month in payday fees, never paying down the principal owed. By June of 2004, she had paid $10,560 in interest on these five loans. She was afraid of going to jail if she stopped paying the fees, and had no idea how to get out of the trap.

*Name changed to protect the borrower's privacy.

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