Google Bans Payday Loans

Google-payday-loans

This means everything and nothing: search engine Google has decided to ban payday loan advertising.

Facebook doesn’t show ads for payday loans and starting July 13th neither will Google, but results will still show up in searches. According to the Washington Post:

“Consumers will still be able to find payday lenders from a Google search. But the ads that appear on the top and right-hand side of a search results page will not show marketing from the payday lending industry … “

The hope is that predatory payday loan companies (read Payday Loans are the Devil in Money Matters: The Get It Done in 1 Minute Workbook) will have access to fewer willing clients. I’ll be interested to see how all this will play out.

PayDay Loans … ugh – 4 Other Options

If you’ve read Money Matters: The Get It Done in 1 Minute Workbook, you know how I feel about PayDay loans. I ran across this PayDay Loan Fact Sheet and I wanted to share it with my readers.

In case you’re not familiar with PayDay Loans here’s what the Fact Sheet says about them:

Typically, a borrower writes a personal check for $100-$300, plus a fee, payable to the lender. The lender agrees hold onto the check until the borrower’s next payday, usually one week to one month later, only then will the check be deposited. In return, the borrower gets cash immediately. The fees for payday loans are extremely high: up to $17.50 for every $100 borrowed(1) , up to a maximum of $300. The interest rates for such transactions are staggering: 911% for a one-week loan; 456% for a two-week loan, 212% for a one-month loan.

That’s crazy right? I know sometimes you feel like your back is against the wall and you have to do what you have to do to put food on the table, but please think long and hard before you choose to take a PayDay loan. Instead of taking this type of loan:

#1 Take money out of your Emergency Fund. These unexpected expenses are exactly what your Emergency Fund exists for.

#2 Clean house. You probably have tons of things in your house you don’t even use. Round those things up and take them to the swap meet. Ask others if they have old items you can take away for them. You’ll pay about $25 to rent a booth, but you’ll be in a place where people come to buy used items. The chances are good you’ll walk away with a few hundred dollars.

#3 Go to your credit union and ask if you can take out a small personal loan. This will provide you with the money you need while costing less and helping your credit score when you pay it off.

#4 Ask a friend or family member. Be clear about how much you need and when you’ll be able to pay it back. These type of loans can damage your relationship if they are not taken care of. Don’t lose a good situation behind money.

Emergencies are always going to occur. Plan ahead and keep at least $500 in your Emergency Fund. Whatever you do, please don’t take out a PayDay loan.