Legend has it that Albert Einstein replied when asked what the most powerful force on earth was, "Compound Interest, " and a powerful force it is. The force to make you money, or take it from you when you have none. And a lack of understanding is often when people feel the wrath of that most powerful force.
David Snyder of the DuPont Community Credit Union says, "Often time clients will find themselves caught up in a cycle that hey don't know how to get out of"
Snyder is a financial educator for Dupont Credit Union. he says people make bad decisions, when they don't properly understand the financial consequences of their choice. “They haven't been given the tools to properly budget or handle their finances."
They typically charge you about fifteen dollars for every one hundred your borrowing, the max allowed by the state.
Delegate Chris Saxman says even with the regulations, more work needs to be done this coming year. "We want to make sure people are not victimized even more so. there are a lot of operators who do a pretty good job."
What is the bottom line of my bottom line then?
According to Snyder, "Better understand your credit report, and how that can help you get a loan in the future. How to develop a budget, not just for now, but something they can stick to. And most importantly, how interest works"
Keep in mind that while the type of lender that can give you an advance on a paycheck is regulated, in the state of Virginia. Car title loan lenders aren't. The interest they charge can be as high as 300 percent.
One title loan operator i spoke with today said he repossessed nine cars just yesterday.
Delegate Chris Saxman said that this coming year, new regulatory legislation will be introduced to make sure these operators don't prey on Virginia citizens.