I got a piece of mail yesterday from Plain Green saying I was already approved for up to $1000 for a short-term loan. I knew it was probably going to be a crazy agreement, but I was curious about the offer so I opened it up and read a little further. The letter was also sure to state they had far better rates than payday advance and cash now places.
Basically it seemed pretty easy, I was already approved for up to $1000, just needed to go to their website and complete the application and agreement. I was sure to look for and read the fine print and this is what I found.
Can you see that line along the middle that states “loan of $1,000 is 299.17% with 24 bi-weekly payments of $124.16”
Let’s break that down:
- Loan Amount: $1000
- APR: 299.17% (yeah, the decimal point is in the right place!)
- # of Payments: 24 bi-weekly of $124.16
- Monthly Payment: $248.32
- Loan Term Length: 3 months
- Total of Payments: $2979.84
- Total Amount of Interest Paid: $1979.84
Now, would you pay almost $2000 to borrow $1000 for three months?
I think not!
Please note: This is an expensive form of credit. Plain Green loans are designed to help you meet your short-term borrowing needs. Appropriate emergencies might be a car repair, medical care for you or your family, or travel expenses in connection with your job. This service is not intended to provide a solution for longer-term credit or other financial needs. Alternative forms of credit may be less expensive and more suitable for your financial needs. Alternative sources you could consider include: a credit card cash advance; personal loans; home equity line of credit; existing savings; or borrowing from a friend or relative.