They say that desperate times call for desperate measures. As an experienced New Jersey debt relief lawyer, I disagree! Too many people trying to keep their heads above water end up reaching out to companies that prey on desperate people. This is why those that offer payday or car title loans are so successful. All I can say is, don't do it!
This thought came to mind last night as I was sitting watching television with my wife. A commercial came on featuring a Native American woman telling you that they can put up to $10,000 in your pocket overnight (subject to credit approval and required documents)! A company called Western Sky Financial was claiming they could do this. Apply now! Application time is less than 5 minutes!
What's the Catch?
Luckily, I was watching a show On Demand and was able to pause the commercial to read the fine print. It was shocking! That $10,000 will cost you an interest rate of 89.68% over 84 months (7 years!) with a monthly payment of $743.49. This means that that $10,000 will ultimately cost you $62,453.16!!
Oh, and by the way, the company exists on the Cheyenne River Sioux Reservation, a sovereign nation located within the United States of America. What does that mean? It means that they are not subject to federal or state criminal usury laws, so they can charge you whatever they want! This is a good thing, because these loans aren't legal under New Jersey law. Here's why!
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It Gets Worse!
Their rates page provides more interesting information. Let's say you don't need $10,000, you just need $850. Well, first, you don't get that much because they take $350 off the top as a "loan fee," so you just get $500. However, since you are borrowing that $350, the interest that accrues is still on the $850.
Plus, guess what? The rate is 342.86%, with 12 monthly payments of $150.72. Thus, that $500 costs you $1,808.64! A cash advance on your credit card would be far cheaper!
What Should You Do?
Loans like these are a sucker bet and aimed at desperate people. If your credit is that bad and you are in serious financial shape with bills weighing you down, don't go to these people! Try debt consolidation, cut back your spending, or file for bankruptcy!
Getting a loan like this is a sign of a bigger financial problem, though, and you may need to consider bankruptcy. To find out if that is the case for you, download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey.
