In recent days, I’ve used a good deal of space explaining the dangers of payday loans, and the unbelievably high interest rates those kinds of loans carry. Meanwhile, we’re all being bombarded with offers and advertising for payday loans. The loans are done out of payday loan stores, check cashing shops, and pawn shops, in addition to the ton of business being done through advertising over the Internet. Somebody must be finding it worthwhile to spend all those marketing dollars! You bet! Industry analysts estimate annual payday loan volume at close to fifty billion (yes, with a “B”) dollars a year, done out of almost 50,000 different outlets. As a bankruptcy lawyer in Indianapolis, I find the most frightening statistic to be this: consumers are paying over $6 billion in loan fees for these payday loans! Wow! I can think of better ways to spend six billion dollars, can’t you?

If payday loans are so awful, then why is the payday loan business so successful? The reason is very simple. All a consumer needs to get a payday loan is an open bank account, a steady source of income, and identification. There’s no credit check conducted, and no questions asked to determine if a borrower can afford to repay the loan. That fact alone should alarm borrowers (“Just why am I being lent money without assurance I can pay it back?”) and make them realize payday lenders want people to be late so they’ll incur all those penalties and fees!

Indiana regulates payday lending to a greater extent than in many other states, but we still have a long way to go to protect borrowers. Play a game as you’re driving down some of the major streets in Indianapolis – see how many check cashing facilities and payday loan signs you can spot. Then, drive on by. If you need help managing debt, don’t pull the key out of the ignition of your car until you’ve reached the office of an attorney who specializes in consumer debt.