BBB warns against alternative loans - WMC Action News 5 - Memphis, Tennessee

Reported by Nick Kenney

BBB warns against alternative loans

MEMPHIS, TN (WMC-TV) - Some Mid-Southerners are considering alternative loans to survive the economic crisis, but the Better Business Bureau is saying, 'not so fast.'

Across the city, more than 100 alternative loan locations are in business, offering the promise of quick cash loans.

At the Better Business Bureau, the phones do not ring with complaints against those businesses as often as you might think.

"In many cases, they've agreed to the terms. So they've signed a contract committing them to making these sorts of payments and these sort of interest rates, so there's not too much we can do," Randy Hutchinson of the Better Business Bureau said.

The pros to alternative loans are simple - they are quick and easy. Usually, you do not need good credit, or even any credit at all. And quick cash might even alleviate an emergency.

But the Hutchinson says to watch out.

"We advise you explore any alternative before taking out a title loan," he said.

The cons are more confusing, but boil down to interest. The typical interest rate is 25 percent per month. So, if you put up your car title for $1000, you would owe $1,250 by month's end.

If you cannot pay it and roll over the loan, you'd owe $1,500 by the end of the second month. $2,000 by the end of the fourth, and so on.

"If you can't make the payment, these are short term loans in most cases. People get to rolling them over. Can't get out of a cycle of debt, end up losing the car, which just makes it worse," Hutchinson said.

The Memphis City Council is considering a resolution that would outlaw alternative loan locations within 1000 feet of parks, neighborhood boundaries, and each other.

Already existing locations would be exempt.


Click here to e-mail Nick Kenney.

  • News on WMCTV.comNewsMore>>

  • 9-year-old dies in crash after driver falls asleep behind the wheel

    9-year-old dies in crash after driver falls asleep behind the wheel

    Sunday, May 20 2018 11:59 PM EDT2018-05-21 03:59:31 GMT
    Jaliya Lewis (Source: Family)Jaliya Lewis (Source: Family)

    Memphis Police Department is investigating a deadly crash that happened early Sunday morning.  Police were called to the scene on Spottswood Avenue and Goodwyn Street where a car hit a tree.  Three children were injured in the crash and taken to Lebonheur Children's Hospital. Two of the children are in non-critical condition. Nine-year-old Jaliya Lewis died from her injuries. Police say the children were unrestrained in the back seat of the vehicle and were thrown to the ...

    More >>

    Memphis Police Department is investigating a deadly crash that happened early Sunday morning.  Police were called to the scene on Spottswood Avenue and Goodwyn Street where a car hit a tree.  Three children were injured in the crash and taken to Lebonheur Children's Hospital. Two of the children are in non-critical condition. Nine-year-old Jaliya Lewis died from her injuries. Police say the children were unrestrained in the back seat of the vehicle and were thrown to the ...

    More >>
  • Two people shot, killed in Memphis

    Two people shot, killed in Memphis

    Sunday, May 20 2018 11:34 PM EDT2018-05-21 03:34:04 GMT
    (Source: WMC Action News 5 Archives)(Source: WMC Action News 5 Archives)

    Two people were shot and killed in Memphis on Sunday, according to Memphis Police Department. 

    More >>

    Two people were shot and killed in Memphis on Sunday, according to Memphis Police Department. 

    More >>
  • As the BBQ competition wraps up, organizers prepare for 901 Fest

    As the BBQ competition wraps up, organizers prepare for 901 Fest

    Sunday, May 20 2018 11:13 PM EDT2018-05-21 03:13:09 GMT
    (Source: WMC Action News 5)(Source: WMC Action News 5)
    (Source: WMC Action News 5)(Source: WMC Action News 5)

    After a successful BBQ contest, organizers of Memphis in May are on to setting up for the next event--901 Fest. 

    More >>

    After a successful BBQ contest, organizers of Memphis in May are on to setting up for the next event--901 Fest. 

    More >>
Powered by Frankly