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PrintBrian Jarvis’ Nov. 27 column (“We don’t need another payday loan business in Columbia”) ignored the value of short-term “payday” loans in helping customers meet urgent, unexpected expenses.
Short-term loan customers appreciate having access to credit that saves them money by helping them to avoid fees associated with bounced checks and late bill payments, which can carry APRs of up to 3,500%, according to a FDIC analysis.
In addition to being more expensive, these options negatively impact credit ratings and may hurt a consumer’s access to employment, housing, insurance and other credit options.
So, payday loan borrowers are often making reasonable choices to proactively manage their finances in the face of more onerous circumstances.
In fact, the vast majority of short-term borrowers fully understands and accepts the associated fees, and uses the product as it was intended – a short-term solution to urgent, unexpected financial needs.
For the small minority who has difficulty meeting their loan obligations, responsible lenders offer extended payment plans that change the time they have to pay off the loan from two weeks to two months. These plans eliminate the need for customers to renew their loans.
Reasonable, hard-working Columbia consumers should have access to the widest range of regulated credit options, and we should trust them to make financial decisions based on what’s best for them and their families.
Tom Linafelt is the director of corporate communications for QC Holdings in Overland Park, Kan.
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Comments
Would be nice if the Church community and nonprofit 501c3 agencies did more to offer help to these people in need as well.
Would be nice if the Church community and nonprofit 501c3 agencies also weeded out those capable of supporting themselves from those who truly cannot. "I see that you have an iPhone. If you can afford that, why are you coming to us for money?" "I see that you smoke. If you can afford cigarettes, why can't you afford food or pay your light bill?"
Being charitable doesn't mean you also have to play the fool.
@JB:
I agree.
Any assistance from nonprofits and churches should also include budgeting classes, payback and future compliance with demonstrated good sense and prudent measures.
PayDay loan companies do not have that expectation.
Of course, some people choose to use these lenders as a way to avoid a responsible lifestyle.
People also experience legitimate emergencies.
It would be up to nonprofit agencies' Boards and the church elders to ascertain how to administer any such programs.
(Assistance programs and help from these venues all ready exist, in various ways.)
-There is a realm beyond the government and PayDay loan companies regarding this issue, JB and I believe it's worthy of discussion.