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Lifeline nearly sank her
Aarian Dodson thought getting a car-title loan would ease a temporary financial strain. Instead, it's become a nightmare
Date published: 9/4/2008
BY CATHY JETT Aarian Dodson thought a $300 car-title loan would tide her family over until her husband's disability benefits kicked in. Instead, the Spotsylvania County former stay-at-home mother of two said she feels like it has her drowning even deeper in debt. Since Dodson got the money to buy groceries last April from Loan Max's office at 334 Amaret St. in Fredericksburg, she's had to shell out a nonrefundable $65 annual membership fee, a $6 fee to record the lien on her 1997 Buick Century and borrow nearly $700 from a relative to get her car back after it was repossessed. "If I had known I would have went through this, I would have taken my TV set to the pawn shop," said a frustrated Dodson, who had to borrow an additional $70 from a friend for a taxi so she could retrieve the family's only vehicle. She still owes Loan Max $370 and plans to fire off a complaint to the State Corporation Commission's Bureau of Financial Institutions about the company's triple-digit interest rates and numerous fees. It will be the 20th such complaint the bureau has received about vehicle-title loan companies this year. According to a Center for Responsible Lending report, vehicle-title loan companies not only trap borrowers in a cycle of debt but can take away an essential asset for most working families if they can't make payments. These companies operate by getting borrowers to put up their fully paid-for cars or trucks as security for what are marketed as small emergency loans. In Dodson's case, she also had to hand over a duplicate set of keys to the Buick. A typical loan has a three-digit annual interest rate and is made for much less than the value of the car. Dodson's loan states at the top that she'll be charged an annual percentage rate of 300 percent. For her, that came out to $73.97 in interest per month. "If I just paid the $71 minimum, I'd be $3 behind," said Dodson, who got a job as a waitress at Logan's Roadhouse restaurant to help pay off the loan and make ends meet while her husband recuperates from a hernia operation.
Date published: 9/4/2008
Worked for me
(posted by
SandraB
, Sep. 6, 2008 6:50 pm)
I got a loan from loanmax and I don’t know what I would have done if they weren’t there. Sure, it’s expensive but if I didn’t get the $400 I needed when I needed the cost to me and my family would have been much more. I don’t like paying a higher rate, but I would rather pay that than have no option at all.
Better than welfare
(posted by
RonnieMann
, Sep. 5, 2008 8:24 pm)
What is this lady and others like her going to do if you shut
these places down? You would rather her starve than take out
a loan with higher interest? And these loans are not meant to
be taken for a year. Anyone who actually pays 300% is just
stupid and irresponsible.
Free to choose
(posted by
2nickles
, Sep. 5, 2008 2:09 pm)
I didn’t see anywhere in that story where somebody held a gun
to her head and made her take that loan. “Life” didn’t sink her,
she is sinking herself by not borrowing responsibly. They can’t
take your car unless you default. Don’t borrow money if you
can’t pay it back.
Sorry but this entire situation was based upon relying on a house of cards!
(posted by
toots52
, Sep. 4, 2008 6:01 pm)
I'm sorry but if you don't have money put aside for emergencies, she should not have the "luxury" of not working. She could work alternate times from her husband and not relying on her husband's disability benefits to kick in. She's working now at Logan's. Spending $70 for a taxi? No one could drive her, no one? Even who lent her the money? She needs to read things obviously. Has she asked and gotten her receipt yet? DUH?
Predatory lenders
(posted by
travelin_bone
, Sep. 4, 2008 3:12 pm)
Quick loan places like this are like making a deal with the devil. They need to be overseen like other lending institutions at the very least. But people need to read what they are signing. Anyone who would agree to a loan w/ 300% interests clearly needs a math lesson.
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