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Why a payday loan could cost you, get you trapped for life

Though they may be easy to get, payday loans can really hurt your pockets in the long run, experts say.

JACKSONVILLE, Fla. — Being cash strap is a scenario a lot of North Florida residents are dealing with everyday. With unemployment on the rise and no federal benefits in-sight, sometimes you got to do whatever you can to make it.

Though payday loans are considered a quick option for people who need cash fast, financial experts said the option comes with consequences.

"You got to watch out, these loans that are easy to get may never leave you," said Charla Rios with the Center for Responsible Lending. It is an agency that alerts consumers on how to not fall in a trap.

"I hear it a lot from people, they think the loan is temporary, but they just don't know how much interest they could pay in the long run," she said.

In Florida, payday loans are legal. Most temporary loans are for two weeks and borrowers can get up to $500, but interest more than 400%. Many times, borrowers can't pay back the loan when it's due so they end up extending the loan and just pay interest but never the principal. This process is sometimes repeated week after week after week.

"You have to watch out, this is without a doubt a snowball effect," said Rios.

But there is help. Experts say educate yourself on how you can survive and get away from the loans. The Consumer Financial Protection Bureau has some information to help you break away, too.

But experts like Rios said a hard break from the loans is best. She said if you can just pay it off, try to never go back.


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