LAS VEGAS - With the holiday season in full swing, some people may turn to payday loans to make ends meet. 8 on Your Side offers a warning to those who choose this option.
According to new research, people who take out payday loans are more likely to borrow more money every two weeks. That gives them approximately five additional months of debt.
Additionally, Nevada law does not include a cap on the amount of interest payday lenders can charge customers.
"A typical loan in Nevada costs four hundred and eighty two percent," said Nick Bourke with Pew Research Center. "When people go to pay it back, it takes up to about thirty seven percent of a Nevadan's paycheck."
Because of those super high interest rates, many people who take out payday loans get into financial trouble. That's where Barbara Buckley of Legal Aid Center of Southern Nevada steps in.
As Nevada Assembly Speaker, she wrote legislation that protects consumers when it comes to payday loans. She encourages anyone thinking of getting one to know their rights. If you default on the loan, your interest rate must drop to the prime rate plus 10.
Her office can defend you and negotiate for you if you get into trouble.
"What I have seen time and time again with these payday loans is someone wants to get their kids Christmas presents, and they get in over their heads, and then they're being called in the middle of the night or sued for thousands or more. That's just wrong," she said.
If you are considering a payday loan, ask questions before you sign on the dotted line. Make sure you know how much the loan will really cost you.
If you are in trouble now, you can contact the Legal Aid Center of Southern Nevada. You can also contact 8 on Your Side at 702-650-1907.