Payday loans can help you get cash fast. However, many come with high interest rates and other fees that can leave people stuck in debt. Sometimes people feel like they’re up against the wall and they need money fast.
“It’s an opportunity to get money for consumers by the end of the week,” said Viridiana Quintana of the San Diego Better Business Bureau. “That’s until they get their paychecks.”
Now the BBB says these ads appear on social media sites like Tiktok and Instagram or Facebook, targeting younger audiences. This is an audience that may not be aware of the risks involved with a so-called payday loan.
“They can incur this type of debt without realizing that they incurred incredibly high charges that they didn’t see directly on the post,” Quintana said.
The BBB warns that some videos or advertisements may refer to interest rates as “tips” or “fees”. He also points out that a $15 fee to borrow $100 translates to an APR of almost 400%.
“A lot of times they have different types of fees that you have to pay,” Quintana said. “This is where it really starts to add up.”
Quintana says you shouldn’t take social media ads at face value. Instead, you should do your own research before agreeing to anything.
“Even seeing if anyone else commented and said anything,” Quintana said. “Is it positive or negative? »
Experts also recommend talking to teens or young adults in your family to help them avoid predatory lending practices.