Wow! The last week I've seen quite a few ads from westernsky.com. They are an LLC that is native-american owned and operating in the sovereign nation of the Cheyenne River Sioux Reservation. (Within the borders of the US, but federal jurisdiction is on iffy ground there.
They are advertising their loans as being more affordable than many payday loans and this evening I decided to take a look at their site.
WOW....
Loan Product Borrower Proceeds Loan Fee APR Number of Payments Payment Amount
$2,600 Loan $2,525 $75 139.34% 36 $298.94
$1,500 Loan $1,000 $500 194.70% 24 $166.95
So.... for a 1500 loan you only get $1000 because of the $500 loan fee!!!! But over the life of that 1500 loan for the use of $1000 you pay back $4006.8
But what if you go for the $2600 loan? The loan fee is much less at $75 (so you get the use of $2525.... but over the life of the loan you wind up paying $10761.84
You would be better off defaulting on whatever you need the 2525 or 1000 for, because you are going to regret getting a loan like this. Please do not consider something like this or other payday loans to cut your credit card balances down to size.
The moral of the story is to be VERY careful for any kind of loan (including credit cards). For all of your loans and credit lines it is a good practice to be familiar with your interest rates (I like having them all in a spreadsheet.) This way you can know which of your card balances to "attack" first. (Highest interest rate first!)
Read the details, read the fine print, read the interest rate information and be aware that rates may increase if there is a missed payment. Try to avoid finding yourself WASTING 10,000+ dollars over the next few years just to have 2500 today.
By the way, it's not clear to me if the terms at westernsky.com require monthly payments or weekly payments. Some other notes though are the following quote:
"Please be aware that not all applicants will qualify for every loan product or the lowest interest rate for a particular loan product. Some applicants will not qualify for any of the products. "
SO, you may not be lucky enough to get the LOW (?) rate advertised on their site. (I'd be really surprised if they turn any applicants away.)
Desperation loans like this only put off the inevitable crunch and will more often than not make your financial and credit situation MUCH worse than it already is.
Also available at westernsky.com - Beware Shocking Interest Rates
This was an informative artical. They all make it sound good until you have to start making those high rate payments. As always, beware.
ReplyDeleteThank you! I'm glad I did my research.
ReplyDeleteThanks for posting this information online. People need to be aware that scams like this will make their financial situation much worse than it is now. Better to work on saving up to pay off bad finances than falling for a scam like this. Thanks for helping people be informed.
ReplyDelete