Saturday, December 14, 2013

Borrow $1,000. Pay back $40,000

A $1,000 loan taken out five years ago has ballooned to a principal balance of $40,000. When Naya Burks of St. Louis borrowed $1,000 from AmeriCash Loans, she signed an agreement to pay back $1,737 in six months. That's bad enough, but she defaulted on the loan and entered the legal system when AmeriCash sued her. 

She was then faced with more costs and garnishment of her wages. She was lucky that she hadn't dealt with Tower Loan; then she would have also gotten stuck with paying the company's attorney.

Many borrowers from these high-cost lenders default. In Oklahoma alone, 95,000 suits have been filed since 2009.

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