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From pauley@sightward.com Mon, 10 Dec 2001 20:26:02 -0800
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From: Paul Jimenez 
To: "'mantel@hotmail.com'" 
Subject: I know lots of good payday loan stores
Date: Mon, 10 Dec 2001 20:24:19 -0800
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In reference to your article http://cageyconsumer.com/payday.html
  here are my comments:

Considering that these are short term loans and these stores have to pay
someone to process each loan, I don't think calculating loan fees as an
annual percentage rate is a fair way to evaluate these companies services.

If I were to go to a mortgage broker to get a house loan, I get charged a
couple of grand in processing fees and then get charged interest on top of
that.  The processing fee is not interest.  I would call $2000 exorbitant,
not $50 or even $100.

Also, consider what it costs when I bounce a check at the bank.  My bank
currently charges $30 for each bounced check plus another $30 is often
charged by the company I wrote the check to.  As you know, 1 bounced check
can lead to a chain of bounced checks.  It saves money to get a quick
emergency loan.  You should write your article about banks charging bounce
fees, which is much worse than payday stores.

I'm sorry, but, I can't totally agree with your article.  On occasion, I
have found payday loan stores to be a very useful service in instances such
as when my wife wrote a check that I didn't know about and I needed to cover
the balance before I got a chain of bounced checks.  In another instance,
they wired emergency money to me when I was on the road with a broken down
car and needed repairs.  My family didn't have any money and I don't have a
credit card.  In short, payday loan companies provide a very useful service.

The most recent company I dealt with also worked with me when I was late
making my payment.  They waived the $30 bounce fee they normally charge and
let me pay back my loan in 3 payments without any additional charge.  (I'm
not supposed to tell anyone about this)  The lady told me that the reason
they worked with me is because I called them up to let them know I was going
to have trouble making a full payment.  She said that normally when someone
skips a payment, they have to pay someone to try to contact the person to
collect, which is why they normally charge a NSF fee.  They also encouraged
me to try to pay off the loan instead of trying to get a new one.  The lady
told me that some people overuse their services and end up in trouble.  They
try to keep this from happening if they can.  They don't mind angering their
customers and reducing their loans if they feel that they have overused
their service.  My experience was that they offered half what I asked for.
When they found out it was for an emergency, they offered more.

I agree that most stores charge too much.  But, I think anything under 20%
is reasonable for a small loan.  I shopped around got my most recent loan at
15%, which is much better than my local store.

I got loans at Americash and Zippicheck.  Both treated me well.  Americash
was a bit too expensive though.  Now, my financial situation is better, so I
don't get payday loans anymore.  In fact, one of the reasons I am better off
is because the customer service lady encouraged me to take some classes so I
can get a better paying job.  She said "you don't need another loan--you
need a new job."  Exact quote.

Yes, there are a few bad apples in the barrel.  But, don't slam them all
just for the few bad ones.

Pauley

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