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8 Payday Loan Horror Stories You Won’t Believe Are Legal

May 20, 2025 By Teri Monroe Leave a Comment

payday loans
Image Source: Pexels

Payday loans are short-term, high-interest loans typically meant to be repaid on your next payday. If you’ve ever needed a payday loan, you probably know that some of their practices are predatory. Still, 12 million Americans take out payday loans annually. These loans often take advantage of individuals who are in a financial pinch and need money fast. Interest rates are astronomical, and missed payments can lead to financial ruin. So, it’s not surprising that there are many horror stories out there. Here are eight stories that we couldn’t believe are even legal.

1. College Student Misses 500% APR

One college student took out a $100 loan to pay for essentials during finals week. Unfortunately, the APR on the loan was 500%. The student didn’t read the terms of the loan. Payment was missed by one day, and the student owed $500 plus a $50 late fee.

2. Teacher Goes into Debt

According to NBC, one day, Jennifer Williams borrowed $200. Years later, she was still struggling to escape debt that she called “quicksand.” It took her 6 years to pay off her payday loan debt. She did this with the help of a local bank that offered financial literacy classes. At the end of the classes, she was offered a low-interest loan to pay off her debt.

3. Six Loans at a Time

Sandra Harris was in a tough time, and she turned to payday lending. After several rollovers, Sandra’s first loan was due in full. She couldn’t pay it off, so she took a loan from a second lender. Sandra eventually found herself with six simultaneous payday loans. She owed over $600 per month in fees alone, which wasn’t applied to her debt. Sandra was evicted, and her car was repossessed.

4. Single Mother Struggles

Lisa Engelkins, a single mother making less than $8 an hour, paid $1254 in fees to renew a payday loan 35 times. Lisa thought she was getting new money each time. In reality, she was only borrowing back the $300 she had just repaid. She paid renewal fees every two weeks for 17 months to float a $300 loan, without paying down the loan.

5. Payday Loan to Afford Medication

Meka Armstrong has struggled in a cycle of debt from payday loans for years. She first took out a payday loan in 2010 to cover the costs of medication she needed for her lupus. Meka said it is the worst decision she has ever made. She said that payday lenders even threatened to sue her and threatened her with jail time for nonpayment. Lenders also have customer’s bank account information.

6. Lying about What is Owed

One individual who took out a payday loan said, “I took out a $1500 loan, wrote two checks for $918. I have paid over $3000 on this. I asked what I need to pay to pay it off, and I was told the check amounts. Went to pay one off and would come back to pay down the other. I was told I had to pay $1300. I don’t have another $400 to add.” The worst part is that lenders can garnish your wages if you are behind on payments.

7. Repayment is Not Considered

Most payday lenders don’t consider whether you can feasibly pay back the loan. In fact, they don’t want you to be able to comfortably afford payments. Then, they make more money. Ed got stuck in this cycle. Ed said he’d been borrowing from various payday lenders for a number of years, and now his monthly repayments were often more than he was earning. He said that he’d complained to the lender about the 50 loans he’d taken out with them, but they said all the loans had been offered responsibly.

8. Communication Isn’t Clear

One individual in Oregon shared their experience with poor lender communication. They said, “I obtained a $300 loan from this company via Money Mutual. Since that time, I have paid a total of $1,295 for a $300 loan. I have no access to my records on their website, and no one at the company will speak to me, yet they continue to debit my account every other week.”

Avoiding Payday Loans

Ultimately, any other kind of loan is better than a payday loan. If you have bad credit, ask a family member or friend for help or see if you qualify for any kind of assistance. You don’t want to get caught in the payday loan debt cycle.

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Teri Monroe Headshot
Teri Monroe

Teri Monroe started her career in communications working for local government and nonprofits. Today, she is a freelance finance and lifestyle writer and small business owner. In her spare time, she loves golfing with her husband, taking her dog Milo on long walks, and playing pickleball with friends.

Filed Under: Debt Reduction Tagged With: payday loan horror stories, payday loan trap, payday loans

How to Save on Your Family’s Medical Expenses While in Debt

December 4, 2023 By Erin H Leave a Comment

Debt can be crippling at times, affecting things like your quality of life and even your ability to access the services that you need. One of these services is health care, which can be a necessary evil, especially for people with families. This is because healthcare costs are generally quite high, calling for measures to help make them more manageable whenever possible. It’s clear to see how much more urgent it could be to do this if you happen to be in debt. Here are a few ways in which you can save on your family’s medical expenses while you’re in debt so that you make the best use of your money.

Practice Prevention

Prevention is said to be better than cure, and this is even more true in this case. By working to prevent health issues from coming up in the first place, you can save a considerable amount of money. That said, there are several things that you can do to safeguard your health as a family, including going for screenings, regular exams, and vaccinations. Don’t forget that your oral health is also a part of your overall health, and in this case, you should maintain proper oral hygiene routines. One of these is knowing that if you use mouth rinses and fluoride toothpaste alongside regular brushing and flossing, you can lower tooth decay by as much as an impressive 40%.

Make the Best of Health Insurance

Another way in which you can save money on your family’s medical expenses is by making the best use of your insurance coverage. One way to do this is to only use health care professionals in your insurance provider’s network. This is generally going to cost you significantly less money than going to medical facilities that aren’t part of your insurance provider’s network. You can make use of it during screenings and tests meant to help you prevent health issues from coming up. On this note, it’s highly recommended for everyone, no matter their age, to have a physical exam done once every single year.

Learn to Negotiate

You should know that you can negotiate for better prices for treatment or other health care costs that you need. To have the best chance of being granted a discount, you could pay in cash. In this case, you’re going to benefit even more if you have a health savings account for your family where you can withdraw the money you need for treatment. As a result of this, you can avoid digging yourself even deeper into debt, something that may not even be an option if you’ve filed for bankruptcy in some cases. In this case, you may already know that Chapter 13 bankruptcy is sometimes called the wage-earner’s plan. It’s designed for people with a regular income and who would like to repay their debt, but need assistance in doing this.

Compare Different Health Care Providers

Last but not least, make comparisons between different healthcare providers and centers since each sets prices for its services independently. While doing this, make sure that you only compare between the most reputable names in health care. Seeking medical advice and assistance from someone without proper qualifications is a terrible thing to do. This is because they could worsen the condition and leave you with much higher costs than you may have initially had to pay.

By taking these steps and additional ones like making use of generic drugs instead of their original versions whenever you get a prescription, you can make savings while safeguarding your family’s health. Make plans for the future so that you can get access to the best health care possible in your situation while working on clearing your debt. This way, better financial times for you and your family may be ahead.

Filed Under: Debt Reduction, General Finance

I Quit My Job: How I Did It; and You Can Too

September 11, 2023 By Shane Ede 31 Comments

One of the first things that you, I, or anyone else will likely worry about when contemplating quitting our jobs is the financial aspect of doing so.  We’ll worry about whether we’ll be able to make enough money, on our own, to pay our bills.  We’ll worry about whether that income, if it is enough, will be steady.  We’ll worry about how we’ll make that money, and whether the income streams that we have are going to be robust enough to scale to a point where we can securely quit our jobs and work for ourselves.  I know they were things that were foremost on my mind when I was deciding whether I should quit my job or not.  In the end, I decided that it was time to let go of some of my fears and take the leap towards self-employment.  Taking that leap was not an easy thing to do.  Here’s how I was able to do it, and how you can too.

Get Your Finances in Order

Sounds simple, doesn’t it?  It’s not.  If it were, there would be a lot of personal finance bloggers who would be blogging about something else today, myself included.  Despite what some people believe, personal finance isn’t a simple thing to master.  I know I haven’t done it yet.  I’m a little bit further along the curve than some, and further behind than others.

When I first started blogging about personal finance, it was during a very dark time in my financial life.  My wife and I had been wondering if we were going to have to declare bankruptcy, and paying our bills each month was a juggling act.  Somewhere in that time period, I discovered other personal finance blogs, and through them, Dave Ramsey.  I ordered, and read Ramsey’s book, The Total Money Makeover.

It was the beginning of a financial turnaround for us.  Ramsey’s book Kathmandu , Nepal,Himalayas,Everestgave us the financial know-how and direction to turn our finances around.  With the help of that book, and the amazing community of personal finance blogs, our finances became something that was far less of a worry for us.  That was over five years ago now. If we hadn’t had that turnaround, and gotten our finances in order, there is no way that I would have been able to do what I did.  We have been aggressively paying down our debt and refusing new debt whenever possible.

When I Quit My Job

If you’re a regular reader here, you are familiar with the story leading up to the day I quit my job.  We had become a bit lax in our financial governance, were about to buy a new house, and were suffering from a severe case of lifestyle creep.  Our lifestyle had grown along with our incomes.  We still were attempting to pay down our debt, and we were still avoiding new debt in most places, but we could have been doing so much more than we were.  That’s our fault.  We got comfortable with our income, got comfortable with the luxuries that we had let creep into our lives, and we lost sight of our end goals.  The day that I decided to quit my job, we took all that back and started actively working towards our goals again.

In a way, quitting has been a blessing.  It’s given us a renewed perspective on what we need, how much we need, and what we can do without.  If you think you are going to quit your job or just want to quit your job, you can’t do it without having a firm grasp on your finances, and truly having them in order.

Cut Your Costs

Part of getting your finances in order, and a large part of being able to make it without the once steady income that you made at your job, is cutting your costs to a level that is sustainable, given your new income level.  I went from a mid-5-figure-a-year salary with steady paychecks every two weeks to a part-time job that I get 20 hours a week at and an inconsistent online income.  In the time since I quit, we’ve cut our costs dramatically. When I was still employed, we were spending nearly $6,000 a month.  That includes debt repayment but is still a pretty large number. Now, we’ve cut our costs by about $2,000.  If you had asked me in October of last year if we could do that, I would have said you were nuts. We found a way to do it and so can you.  It’s all a matter of motivation.  Do you have the motivation to cut costs so that you can give your dream the wings it needs?

Work Your Ass Off

Have your finances in order.  Cut all the costs you can.  None of that will amount to a hill of beans unless you are ready and willing to work your ass off.  It’s something that I still struggle with.  Every job you’ve ever had has conditioned you to expect to have someone telling you what you had to do.  Everywhere you’ve ever worked, you’ve had a supervisor looking over your shoulder giving you the tasks that you were to work on, setting your yearly goals for you, and keeping you motivated to do them with the threat of unemployment.  Once you quit your job, and decide to work for yourself, that all ends.  It sounds freeing, doesn’t it?  It is.  And, it isn’t.  You have to become your own supervisor.  Your only motivator is to make your choice valid and make enough money to live off of.  You aren’t going to get fired for spending 4 hours a day on Facebook anymore; You’re going to go broke.  Scary, no?

As scary as that may sound, it is freeing.  You’ll have the freedom to make the choice to work your ass off.  It’s something that, even now, almost 3 months later, I still struggle with.  There have been days where I haven’t done a damn thing.  And, I’ve regretted each one of them.  Each day spend screwing off has cost me potential money.  If I don’t get anything written for this site or any of my other sites, it’s one less article that you’ll enjoy reading (I hope), and one less well-written article to attract new readers and new advertisers.  Because of the long-lasting ability of any article that I write, the repercussions of a missed article can be exponential.  What you choose to do, may not be writing content for websites, but you’ll likely see the same trend.  And you’ll likely struggle to keep yourself on task without a supervisor.  I’m learning, and you will too, that you have to provide that supervisory oversight for your new venture.  It’s no longer a matter of keeping your job, but of keeping your bills paid, your heat on, and the foreclosure agent from your front door.  Work your ass off.

Have a Little Hope (And Faith)

None of what I’ve said is the most important part of this.  Without hope, you are destined to fail.  You have to have hope that you will succeed.  You have to have hope that you’ll overcome any mistakes you make.  You have to have hope that you will prevail and make your venture grow roots and blossom.  You have to have faith in yourself, that you can do the things you need to do to make your venture a success.  Without hope and faith, you will fail.  I can tell you, firsthand, that there are going to be days when both your hope and your faith will falter.  There will be days that you feel like you’ve started on the trail to scale Mt. Everest.  The air is getting thin, and all you want to do is, stop, turn around, and head back to the comfy, warm, job you had before.  But, like anyone who has attempted to climb that mountain, you have to keep climbing.  The trail may change directions from time to time, but the goal is the same.  Find ways to renew your hope through community, family, and friends.  I’m lucky enough to have a very supportive family, friends, and the community of personal finance bloggers to help me keep that hope and keep my faith.  You can find that too.

Get your finances in order, dramatically cut your costs, work your ass off, and keep your hope and faith alive.  Reach your summit.
photo credit: ilkerender

Shane Ede

I started this blog to share what I know and what I was learning about personal finance. Along the way I’ve met and found many blogging friends. Please feel free to connect with me on the Beating Broke accounts: Twitter and Facebook.

You can also connect with me personally at Novelnaut, Thatedeguy, Shane Ede, and my personal Twitter.

www.beatingbroke.com

Filed Under: Debt Reduction, Financial Truths, The Beating Broke Story Tagged With: how to quit your job, I quit my job, quit job, quit my job, quitting

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