Payday lending interest loans causing debt trap: locals speak out
POSTED: Monday, February 17, 2014 - 8:51pm
UPDATED: Monday, February 17, 2014 - 9:04pm
BATON ROUGE, LA (NBC33) — Pay day loans and payday advances are causing headaches for locals across the state. The interest on them continues to cause problems for many
Together Louisiana has found that payday lending is putting many of our residents in major binds leaving them with more debt instead of less. It’s something they want our state lawmakers to address.
Payday loans are geared to help people who need cash quick but they come with a lot of interest leaving you paying more than double your initial amount. It’s something one man says put his family in a tough situation that burdened them for almost a year.
Lawrence Potier Jr. never would have thought he would be living paycheck to paycheck, until a car accident put him over the edge.
"My wife was laid off from her job a week after the accident so it forced me to take out a 500 dollar loan," noted Potier.
Five hundred bucks it may not seem like a huge loan but Potier ended up in a much bigger bind that ever expected.
"I had to renew the loan about 7 times so I had to pay 700 dollars before I even paid a penny on the 600 dollars that I actually owed them."
He’s a father of four with a full time job so Potier had no choice but now almost ten months later he’s finally paid it off.
"The people who really need payday loans and those types of loans they really can't afford to pay the loan back and those types of fees."
That's why he turned to together Baton Rouge, to try and tell his story to the big wigs.
"We're really going to a have a hard push on that we started looking at that a year ago and realized we needed to learn a lot of information before we went to the legislature," said Together Baton Rouge leader, Dianne Hanley.
Similar to other states their advice to lawmakers is to put a cap on interest and limit lending which is something that isn’t regulated right now.
Potier's advice is to do everything you can before you get stuck in the debt trap that he suffered in for almost a year.
“I believe that's one thing that the state could look into doing that would help everybody because people are loosing jobs families everything trying to pay back payday loans," said Potier Jr.
And Poteir says he even had to stop himself from taking another loan out just to pay the current now back.
“It’s really predatory lending.”
The legislative session starts next month. Together Louisiana hopes to have someone present each day to make their voice heard during this year’s session.