Personal Stories

Stories from Kentuckians that express their dissatisfaction with using payday lenders in their time(s) of need.

Please feel free to share your experience.

A Lawrenceburg wife and mother used a payday lender in 2001 to borrow less than $200 to cover her musician husband’s transportation expenses.  She wasn’t able to repay it within the two weeks and had to renew the loan.  She got caught in a cycle of paying minimum amounts and renewing the loan.  This went on for 18 months.  During that time, she was amassing other debts as well.  In the end, she had to refinance her home to pay off those debts as well as the payday loan.  In all, she paid back almost ten times the original loan in fees and interest.

A single mother of three in Owensboro borrowed about  $200 from a payday lender.  She wasn’t able to pay it off immediately; instead she made payments when she could.  The interest was adding up and over the course of 6 months, she paid back between $500 and $600, but still hadn’t paid the loan off.  Finally a relative paid the total in full for her, and she was able to repay him interest-free.

A Richardsville resident and mother of a 6-month old child turned to a payday lender when she found herself a bit short of cash to pay her bills. She borrowed around $400 and repaid it on time.  She took out a second loan for about $450 and got behind on it soon afterward.  She took out another loan in an attempt to get out from under that one, and was soon so far behind that she was taken to court by the lender.  As a receptionist in a doctor’s office and a student at Western Kentucky University, she sends her lender what she can out of each paycheck so she won’t put herself in this position again.  She says court costs and fees have cost her between one and two thousand dollars.

A single mother of two teens is employed as a cafeteria worker with the local school system.  During 2008, when gas was very expensive, she had a pay period where she was short on cash for her bills.  She didn’t want to bounce a check or accrue late fees, so she used a payday lender to borrow $100.  The fee was $15 for the loan, but Carol had to renew twice, and she ended up paying $45 in fees for the $100 she borrowed. Unfortunately, she was forced to use the service twice again, the most recent time this past July, but these loans were repaid in one cycle, costing her only the original $15 fee both times.  Carol was not comfortable using the payday lenders, but luckily now she is in a more stable financial position.  She says that she would only use the service again in an extreme emergency.

A non-traditional college student in Louisville returned to school at the age of 33.  She graduated in May, but while she was enrolled in college, she used a payday lender one time.  She gave them a check for $200 and was given $165, as the fee charged by the lender was just over $17 per $100 borrowed. F ortunately, she was able to repay the loan in a timely manner and has never taken out another.  However, she says she was surprised at the large number of people who were in the establishment the day she went in, and has also been surprised by the lender’s aggressive tactics.  She still receives mailings from them asking her to come back, and recently received a phone call from the lender about a “special” they had going on. 

An elderly Louisville lady who lives on Supplemental Security Income has been involved in the payday lending cycle for 10 years.  She’s borrowed repeatedly over that time, having multiple loans out at any given time.  She estimates that she’s borrowed $1,800 over the years.  She hopes to get her current loan paid off and get out of the cycle.  But she would also like to see an interest rate cap in Kentucky.


A Former Payday Lending Manager Speaks Out:
She spent approximately a year and a half working for two payday lenders in Central Kentucky.  She indicated that on average, only 10% of customers paid off their loans in the allotted time.  Of the others, 75% got stuck in the lending cycle, borrowing and reborrowing over and over.  She and her coworkers had to call customers every day when they were late with their payments, and if she couldn’t reach someone by phone, she went to the person’s home.  In addition, she called banks every morning to see if customers’ accounts had the funds to cover their loans.  She also mentioned that the payday lenders would offer incentives to lure in customers.  Often the first loan was given at a reduced rate, and customers were offered $20 for referring others to their store.  Whitney said that she often saw the same people at both stores; many were regulars.


4 responses

4 03 2009
June Richardson

There is an even bigger problem that needs addressing. Not only are the interests rates outrageous but if you have the misfortune to get involved with payday lenders over the internet you are screwed. I am got in this never ending cycle of trying to pay them back. They call my home, my work, my boss. They say I can go to jail and they are with the Federal Crime Division. I am breaking internet banking laws, etc. It doesn’t matter how much you pay them. You can’t get anything that says you are paid in full. Does anyone have an idea? I am at my wit’s end. Please help.

4 12 2009
internet payday lender

I recently came across your blog and have been reading along. I thought I would leave my comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

6 02 2011
Another Former Payday Lending Manager

I worked for a payday lender for 5 years. I had customers before the state data base was up and running that was in 4 or 5 payday lender businesses. After the database went in, the business at this location was drastically cut, so my employers told us no matter what the customer’s income, let them have the maxium amout of $500.00, pay back being $588.25. This was to lock them in to this one payday lender. Some of the customers were SSI recepients due to children in the households with disabilities. Every month when they paid this check for $588.25, and then did a new transaction they were giving the payday lender $88.25 of their SSI income, which is usually around $674.00 a month. The people who owned the payday lending business where I worked owned homes in other states, and a lot of the profit from this business was being spent by them in the other states. All of the profit from this business was not being put back into the Kentucky economy.

16 02 2011

Why does the government want to control everything we do? These people paid off their loan and got another one which means they did not pay fees over and over. They kept getting the principal over and over. If I take out a installment loan for $1000 and pay it off with $500 interest and get another one does that mean I paid $1000 interest on the original loan? No I got another loan and another $1000 which is exactly how the payday loans work. They get the money all over again. You know who wants these types of businesses to close? Banks! They get $36 for every overdraft. If you overdraft a $1 they charge you $36. Banks are more of a problem than these people are. They provide a service to high risk people who have burned everyone else and have no place to go.

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