Yes, you read the headline right. Web loans with 842% interest rates do exist, with some even as high as 2,000%. I know what you’re thinking. Who in their right mind would apply for a loan with such a ridiculous interest rate?
The majority of those who are using online loan services don’t have the best credit, so they wouldn’t qualify for a typical bank loan or home equity loan.
These loans are called online payday loans, similar to the ones you can get at the storefront centers, offering a loan of money until you get paid. These loans often come with steep fees and interest rates though.
Payday loans usually are marketed to poor and low-middle income workers. Now even middle class workers are resorting to online loans to cover themselves until payday due to high gas and food prices and tight credit.
The Chicago Tribune ran this story on May 11 and it is such an eye-opener to the ways that companies prey on consumers who are going through a tough financial time. Click here to read the whole story to make sure you don’t get caught up in the same situation that the woman in the story did.