Numerous times now, we have seen carbon copy clients coming to us... usually when it is too late to help with low impact means. A client gets into trouble, and looks for a quick fix. They go to a payday loans company to borrow a few hundred dollars. Next payday, they don't quite make enough to pay off the loan and so go to another payday loans company.
The term, 'Robbing Peter to pay Paul' comes to mind.
One of the hardest things in counselling is letting the client know, it really is ok to ask for help. Clients come to us after using up all the payday loans companies they can, and find the interest from all the loans in spiraling out of control.
Do I agree with payday loans (or short term loans)? I do. Suprised? Well firstly, the loan should only ever be short term. Short term anything comes with high cost. But on occasions I have no problem with people using them.
One gentleman I speak with on a regular occasion runs about 10 payday loan offices. He told me that customers will try to borrow money from him before a previous loan is repaid from his office. He will allow it once, but then makes the client pay the loans before he allows them to borrow more. Sure enough, when the loans are paid off, the same client walks back into the office asking for more cash.
My collegue openly admits, that he stops loaning the client money because they are not learning how to deal with their fincances effectively. Short term loans should not be a way of living your life on a regular basis.
We are now working together to inject the offer of credit counselling to the clients when they are repeat customers or start falling behind on their payments.
I really hope we can get to some people before they hit the slippery slope of relying on short term cash. People that are in trouble should really be looking for debt consolidation using a credit counselling service to get them out of deep water.
...wish us luck.
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment