Numerous cash-strapped Tennesseans have actually looked to pay day loans in a down economy.
But a new item called a flex loan is quickly becoming the industry norm.
It is an open-ended credit line with an impressive 279per cent yearly interest.
Tennessee is amongst the very first states where you are able to have the brand new flex loans. These loans also have high interest rates like payday loans.
Even though those who work in the industry say flex loans are much better than old-fashioned pay day loans, both experts and customers we chatted to say you need to be cautious because flex loans is hard to pay back.
When you are quick on money, a flex loan might look like the solution.
But also for folks like Malia Andrews, it absolutely was the incorrect solution.
“we pretty much had a whole meltdown when you look at the automobile,” Andrews recalled, explaining as soon as she understood it might just take years to cover her flex loan off.
She explained, “and just like $20 of my repayment would definitely the main together with remainder had been, like $300, ended up being going to the rate of interest.”
The single mom stated that, if she’d known how much the mortgage would wind up costing her, she never ever could have taken it away.
Then there is Fort Campbell veteran Joshua Hause.
“Everybody ended up being relocated into a flex loan account — there is no option,” Hause stated. (more…)