Easy Money Title Loans, Pawn Shops, Rent-a-Centers and Advance Payday Loans Offer Simple -- and Expensive -- Credit

By Paul, Peralte C. | The Florida Times Union, October 2, 1999 | Go to article overview

Easy Money Title Loans, Pawn Shops, Rent-a-Centers and Advance Payday Loans Offer Simple -- and Expensive -- Credit


Paul, Peralte C., The Florida Times Union


All she needed was $300. Now, Southside resident Emma Gaile is praying for a miracle.

Following a divorce, Gaile decided to leave her Southeast Georgia home in October of last year and move to Jacksonville to start her life over.

As any newcomer can attest, there are expenses -- first and last month's rent, telephone and electricity hookups, motor vehicle registration fees and other odds and ends -- associated with planting roots in a new town.

Finding herself in a bit of a pinch, she went to a car title loan business on the advice of a friend and took a loan for about $300, putting the title to her brown-beige, 1986 Honda Accord LX as collateral.

Two months and a lawyer later, she's still trying to get her car -- her sole means of transportation -- back.

It was experiences such as Gaile's that compelled the Jacksonville City Council in January to cut the interest rates that title loan shops could charge from an annual rate of 264 percent to 18 percent -- a level that drove most shops within Duval County out of business.

Consumer advocates who counsel people in circumstances similar to Gaile's warn of other easy credit businesses -- among them pawn shops, rent-to-own retailers and advance payday loans -- that they say profit from people's troubles.

But those who work in the named industries say they are providing a service to a segment of society that has little alternative or choice -- particularly with small loans -- because mainstream lending institutions don't typically dole out $300 or $500 loans.

"Our consumers are not dumb," said Michael Coniglio, an attorney and president of the Southern Association of Title Lenders, an organization with members in 15 states.

"Everyone likes to portray our clients as if they're poor and dumb and we need to protect them from themselves," he continued, saying that 90 percent of title loan borrowers pay back their loans in full.

Gaile was one who fell behind on her title loan. After it had been repossessed when she missed a payment, she spent July 26 and the next six days trying to get her car back.

Under Florida laws, title loan companies can legally take possession of automobiles if the borrower doesn't meet his or her end of the contract.

Though Gaile acknowledged that her payment that week was late, she said she explained to the title loan lender earlier that same week that she would make her payment -- roughly $280 -- on July 27.

"I want people to understand what they're getting into," Gaile said, explaining why she opted to share her story when others in similar circumstances might want to keep it private.

"They think it's quick and hassle-free, but there's nothing quick and hassle free about it. I don't care how much money you need," she said. "If they're going to cut your lights off, it's better to let your lights be cut off; you're going to run into a lot more problems than having the lights turned off."

BUYER BEWARE

Rent-to-own companies, which have been around for about 30 years, offer the convenience of making small weekly or monthly payments for rented furniture or electronics with an option to return the merchandise when no longer wanted or needed. After a fixed number of payments, however, the rented merchandise becomes the property of the person renting it.

The rub, advocates say, is that the consumer will pay charges the equivalent of 200 percent to 300 percent interest over the term of the rental contract.

Moreover, advocates and traditional retailers say that even if the consumer ends up keeping the item -- which is often used to begin with -- that customer has often paid more than what he would have paid had he purchased it with cash or used a credit card charging 16 to 24 percent interest.

Payday loans are just that -- loans given to people who are between paychecks but need money right away. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Easy Money Title Loans, Pawn Shops, Rent-a-Centers and Advance Payday Loans Offer Simple -- and Expensive -- Credit
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.