Letters to the Editor

Valuable role

February 12, 2009


To the editor:

Reporter Mike Belt’s Jan. 26 article on family finances states that 85 percent of payday loan customers are “unable to pay their loans by the deadline.”

The reality is that the vast majority of payday loan customers pay their loans off on time. Here at Quik Cash, about 90 percent of our customers meet the terms of their loan agreements without incurring financial difficulty.

For the small minority who has difficulty meeting those terms, we offer, at no extra cost, extended payment plans that give customers more time to pay off their loans.

You won’t find that kind of free credit anywhere else.

Short-term loan companies each year help thousands of Kansas families overcome unexpected financial circumstances, and Federal Reserve Bank studies show that, by extending credit where otherwise there would be none, short-term loans actually help household finances.

Tom Linafelt,
QC Holdings Inc.,
Overland Park


geniusmannumber1 9 years, 4 months ago

Interesting, in that every payday lender in every state (where payday loans are still legal, that is) says exactly the same thing (same numbers and everything), but refuses to offer any proof that this is the case.

Phil Minkin 9 years, 4 months ago

"about 90 percent of our customers meet the terms of their loan agreements without incurring financial difficulty."

I guess I really don't understand that statement. Is that the same as completely paying off the loan or is it making the minimum required payment and stretching the loan over a longer period of time to increase the interest payments? I have trouble reconciling Belt's 85% statement with the LTE writers.

jjsdad2004 9 years, 4 months ago

What we need is more regulation on these type of loans. Lower fees and lower loan amounts. I worked in the business, beleive me the customers aren't the poor, but the budget challanged. I had people who made over $3000 bi-weekly come into some of my locations, and they were just living beyond their means. We need to educate people on how to handle their money. But common sense is not something you can regulate.

paavopetie 9 years, 4 months ago

There should be no interest rate. In fact, the Church once forbid that practice, and for good reason.

labmonkey 9 years, 4 months ago

Pay-day loan places are legalized loan-sharking. Why we allow them is beyond me.

fms 9 years, 4 months ago

paavopetie - no interest means no loans. I like having the option of borrowing money. Money has a cost just like anything else, and forcing it to zero will only dry up the market. It's certainly true that there are people who don't use loans wisely- but that's true of almost any product, financial or otherwise. We shouldn't make it illegal to do something unless the negative consequences far outweigh the positives, and don't forget that our society is founded on principles of liberty, rather than "father knows best."

Similarly, the 4% interest rate Congress wants for "people with good credit" will only mean that people will be even less able to get home loans than they are now.

jjsdad2004 9 years, 4 months ago

Payday loans can serve a community, if used wisely. But you can't regulate that, what you can do is change the fee structure so that is profitable enough to be in the business, but with enough limits to keep people from abusing it. I worked in the business in the KC area, and it was nothing to see bankruptcies with 20 or more payday loan companies listed. That is the height of insanitiy. But just as you can't force an alcaholic not to drink, you can't force someone to spent their money wisely. Some craziness is the price of freedom of choice.

del888 9 years, 4 months ago

I am the manager of a local payday loan store. I can assure you that many of our customers are not 'poor'. Also, the vast majority of our customers pay their loans on time (over 90%). Also, to keep the facts straight, it is a law in Kansas that payday loans can only charge $15 per hundred borrowed. If the customer is late paying, then the payday loan store has the right to charge 3% per month as a late fee ($3 per hundred). At the store that I manage, we do not charge late fees except in extreme cases. There is no 'stretching the loan over an extended period'. If the customer is late paying the loan, the fee is still the same ($15 per hundred). We do not charge additional fees. Many of the people that we service would not be able to pay their utilities, car payments, etc without our service. Get the facts before you react!

del888 9 years, 4 months ago

One more comment: it is illegal in Kansas for a person to have more than two outstanding payday loans at any given time. We have our customers sign a contract stating that they do not have more than 2 loans. We do not have a way to monitor them tho. So if they lie, we have not way to know that.

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