Escape the Payday Predator (3 of 3): Fact-Checking the Payday Lenders

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Predatory lenders have a much-deserved reputation for twisting the truth, lying by omission, and generally being deceptive about their loans. Here are the cold hard facts about payday loans you deserve to know.

Fact: Payday loans are designed to trap borrowers with debt.

Payday loans trap borrowers in debt by their very design. They may be marketed to consumers as a “short-term” solution, but you have to ask yourself, is a short-term solution even what I need to begin with?

Payday loans just aren’t designed to be real solutions, they’re debt traps plain and simple. Most payday loan customers find themselves trapped with debt for five months or longer as a result of these predatory loans.1 The predators in a Kwik-E-Ka$h storefront won’t tell you that.

Fact: Lenders profit when you cannot repay your loan on time.

If you’ve taken out a payday loan and can’t repay on time (many people can’t), your lender will offer you “rollover”—or the opportunity to extend your debt another two weeks (for another round of interest fees). A borrower’s inability to repay on time creates more profit for the lender.

This is what’s known as a “debt trap.” Borrowers get caught in a cycle of interest fees and wind up having to borrow money from other lenders just to keep up. Talk about robbing Peter to pay Paul. This will not end well. Your best bet as a consumer is to never go down the rollover road to ruin.

Fact: Payday lenders target those with low income.

This one simply isn’t discussed openly by the payday loan industry: More payday loan storefronts are found in lower income areas. In California, the highest concentration of payday lenders are in areas where average per capita income is lowest and unemployment is highest.2 Predatory lenders’ “short-term solutions” create long-term crippling debt for people who should not have to worry about being exploited financially when they just needed some assistance (learn more in Payday Lending in America: How Small Dollar Loans Create Big Problems for Families and Communities).

Get the whole story, every time. If you need financial assistance, OppLoans offers the safest personal installment loans available. Our terms are far longer, our loans are higher, and interest with us is as much as 125% lower than payday loans. Your payments with us will be fixed, so you’ll always know what to expect. Never fall prey to the predators.


“Payday Lending In America: Who Borrows, Where They Borrow, and Why”. The Pew Charitable Trusts. Accessed April 24, 2016.

Peterson, Hayley. “6 Outrageous Facts That Show How Payday Lenders Screw Consumers.” Accessed April 24, 2016.

Blog Series: Escape the Payday Predator
Part 1: Identify a Predatory Lender with these 5 Warning Signs
Part 2: Three Common Tactics Meant to Trap You in Debt
Part 3: Fact-Checking the Payday Lenders

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